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Asia Pacific – Can A Contract Be Formed Simultaneously In More Than One Jurisdiction?

14 July, 2014

 

Legal News & Analysis – Asia Pacific

 

Two years after it published the new Arbitration Rules, the International Chamber of Commerce (ICC) has now published its new Mediation Rules (the Rules) which took effect on 1 January 2014. The Rules replace the old ICC ADR Rules which had been in force since 2001.

 

Like their predecessor, the rules aim to facilitate the amicable settlement of disputes with the aid of a neutral third party, albeit that now the primary focus is on mediation as the preferred dispute resolution technique. This reflects the fact that more than 90% of cases filed with the ICC since 2001 have reverted to this method. That said, the rules still allow parties to use other forms of dispute resolution, such as conciliation or neutral evaluation, if they prefer.
 
Whilst the majority of changes effected are largely stylistic, it is notable that the Rules are now exclusively administered by the ICC’s International Centre for ADR. This is a stand-alone administrative body within the ICC, which now enjoys a strengthened role in the dispute resolution process. Its role includes, in the absence of contrary agreement between the parties, determining both the language and location of the mediation (Article 4) as well as the appointment of a mediator (Article 5).
 
Also of significance are the changes to costs and fees. The ICC’s administrative expenses are now based on the amount in dispute. Where this is over USD 100k, the maximum amount the ICC will charge has tripled to USD 30k. For low-value disputes (under USD 200k in value), the maximum has halved to USD 5k. There is also a non-refundable filing fee of USD 2k. Nevertheless, the service remains considerably cheaper than other alternative dispute resolution procedures. Whilst the Rules envisage that all fees and fixed costs will be borne equally between the parties, a party is free to pay the unpaid balance of any required deposits and/or costs if the other party fails to pay its share (Article 6 (6)). As the Centre has the power to stay or terminate proceedings if any requested deposit is unpaid (Article 6(5)), there is a risk that one party may be forced to pay the other’s share of the costs in order to proceed with the mediation.
 
Finally, in an effort to increase user-friendliness and following consultations with members of the ICC Commission on Arbitration and ADR, the ICC has also published its (non-binding) Mediation Guidance Notes to accompany the Rules. These highlight the benefits of mediation as a settlement technique, in particular the ability to adapt the process to suit the individual needs of parties and to reflect the nature of the dispute. Ultimately the message is that the Rules provide a means to enable the parties to reach a commercial solution that could not be achieved through traditional adjudicative processes.
 
The reaction to the new Rules, particularly the revised fee structure, remains to be seen. However, they provide a valuable reminder of the existence of another dispute resolution mechanism, one which is known for its international nature and its ability to bridge cultural gaps. In the words of the ICC itself ‘The new Mediation Rules have been adapted to help parties resolve even the most complex cross-border disputes quickly and reliably’.
 
Ince & Co
 
For further information, please contact:
 
Simon Hems, Partner, Ince & Co
simon.hems@incelaw.com

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