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Part I Commentary on the ICDR International Rules, 2 Article 2—Notice of Arbitration

Martin F Gusy, James M Hosking

From: A Guide to the ICDR International Arbitration Rules (2nd Edition)

Martin F. Gusy, James M. Hosking

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved. Subscriber: null; date: 03 August 2020

Subject(s):
Arbitration — Counterclaims

(p. 37) Article 2—Notice of Arbitration

Article 2:  Notice of Arbitration

  1. 1.  The party initiating arbitration (‘Claimant’) shall, in compliance with Article 10, give written Notice of Arbitration to the Administrator and at the same time to the party against whom a claim is being made (‘Respondent’). The Claimant may also initiate the arbitration through the Administrator’s online filing system located at www.icdr.org.

  2. 2.  The arbitration proceedings shall be deemed to commence on the date on which the Administrator receives the Notice of Arbitration.

  3. 3.  The Notice of Arbitration shall contain the following information:

    1. a.  a demand that the dispute be referred to arbitration;

    2. b.  the names, addresses, telephone numbers, fax numbers, and email addresses of the parties and, if known, of their representatives;

    3. c.  a copy of the entire arbitration clause or agreement being invoked, and, where claims are made under more than one arbitration agreement, a copy of the arbitration agreement under which each claim is made;

    4. d.  a reference to any contract out of or in relation to which the dispute arises;

    5. e.  a description of the claim and of the facts supporting it;

    6. f.  the relief or remedy sought and any amount claimed; and

    7. g.  optionally, proposals, consistent with any prior agreement between or among the parties, as to the means of designating the arbitrators, the number of arbitrators, the place of arbitration, the language(s) of the arbitration, and any interest in mediating the dispute.

  4. 4.  The Notice of Arbitration shall be accompanied by the appropriate filing fee.

  5. 5.  Upon receipt of the Notice of Arbitration, the Administrator shall communicate with all parties with respect to the arbitration and shall acknowledge the commencement of the arbitration.

I.  Introduction

2.01  Articles 2 through 10 of the 2014 ICDR Rules fall under the overall heading ‘Commencing the Arbitration’ and address issues not yet involving the Tribunal. They include the basic initial (p. 38) pleadings to be made in respect of the claim or counterclaim, set-off and defences, as well as any amendments thereto and a general notice provision, addressed in Articles 2, 3, 9, and 10, the administrative conference (Article 4), mediation (Article 5), the appointment of an emergency arbitrator and applications for emergency measures of protection (Article 6), joinder (Article 7), the appointment of a consolidation arbitrator, and the consolidation of proceedings (Article 8).

2.02  Under the ICDR Rules, the initial pleading is called a ‘Notice of Arbitration’. Article 2 of the 2014 ICDR Rules no longer combines the Notice of Arbitration with a statement of claim. In accordance with general practice in institutional international arbitration, Article 2(3)(e) requires the Notice of Arbitration to set forth ‘a description of the claim and of the facts supporting it’. The standard for the initial pleading set by Article 2(3) is more comprehensive than a mere notice of intent to arbitrate, the ‘demand for arbitration’ under the AAA Commercial Rules, or the notice of arbitration under Article 3 of the 1976 and 2010 UNCITRAL Arbitration Rules.

2.03  Retaining the terminology of Article 3 of the 1976 and 2010 UNCITRAL Rules, the ICDR Rules refer to the ‘Notice of Arbitration’ as the initial pleading. Unlike the 1976 and 2010 UNCITRAL Rules, which treat the notice of arbitration and the statement of claim as two distinct pleadings and leave it to the claimant to elect whether to designate its notice of arbitration also as the statement of claim,1 the 2014 ICDR Rules now leave it to the Tribunal, in compliance with standard international arbitration practice, to set the pleading timetable and requirements, including for the submission of a Statement of Claim.

2.04  Similar to the requirement in Article 4(3)(c) of the ICC Rules that a ‘Request for Arbitration’ contain ‘a description of the nature and circumstances of the dispute giving rise to the claims’ and the demand in Article 1.1(iii) of the London Court of Arbitration (LCIA) Rules requiring ‘a statement briefly summarising the nature and circumstances of the dispute’, the 2014 amendments to the ICDR Rules removed the ‘indication of the facts’ qualification and now simply asks the Claimant to set forth a ‘description of the claim and of the facts supporting it’.

2.05  The ICDR Notice of Arbitration needs to be prepared before the appointment of any of the arbitrators. Article 2 does not require the claimant to nominate its arbitrator within the Notice of Arbitration. Article 12(3) affords forty-five days from the commencement of the case by means of serving the notice of arbitration upon the other parties and the administrator before an appointment of the claimant’s arbitrator is due or an agreement needs to be reached with the respondent(s) on how such appointment shall take place.2

2.06  Uniquely, the ICDR Rules also address at least one consequence of a failure to comply with the pleading requirements of Article 2. In the International Arbitration Fee Schedule amended and effective on 1 October 2017,3 an incomplete Notice of Arbitration or other filing that does not meet the requirements contained in the ICDR Rules is subject to a US$600 deficient claim filing fee if the filing party fails to respond to the ICDR’s request to correct the (p. 39) deficiency.4 But it is important to note that the ICDR does not perform a searching analysis of the adequacy of the Notice of Arbitration. In the words of senior management, ‘If the filing party presents a plausible argument that satisfies the ICDR prima facie, then the ICDR can exercise its administrative mandate and commence the case, leaving any remaining issues for the arbitrators once appointed.’5

2.07  One of the most innovative features of the 2014 amendments to the ICDR Rules is the promotion of mediation within the International Arbitration Rules. While the Notice of Arbitration must contain a demand for arbitration, the 2014 Rules now encourage a Claimant to indicate any interest in mediating the dispute on an optional basis. As will be discussed, proposals to introduce a mandatory obligation to attempt mediation were ultimately not accepted. Similarly innovative, but really just formalizing what had long been the ICDR’s practice, Article 2 of the 2014 ICDR Rules now also expressly addresses two aspects of filing logistics: first, providing that ‘[t]he Claimant may also initiate the arbitration through the Administrator’s online filing system located at www.icdr.org.’ and, second, that ‘[t]he Notice of Arbitration shall be accompanied by the appropriate filing fee’ in light of the different filing fee options provided.6

II.  Textual commentary

A.  Party definitions and commencement of a case (Article 2(1) and (2))

Article 2(1)

The party initiating arbitration (‘Claimant’) shall, in compliance with Article 10, give written Notice of Arbitration to the Administrator and at the same time to the party against whom a claim is being made (‘Respondent’). The Claimant may also initiate the arbitration through the Administrator’s online filing system located at www.icdr.org.

Article 2(2)

The arbitration proceedings shall be deemed to commence on the date on which the Administrator receives the Notice of Arbitration.

2.08  An ICDR arbitration starts with the filing of the Notice of Arbitration. The ICDR website contains a form that provides the bare basics needed for the preparation of the Notice of Arbitration.7 However, the claimant(s) are at liberty to apply a more elaborate style and format so long as the content requirements of Article 2(3) are fulfilled.

(p. 40) 2.09  A preliminary issue when drafting the Notice of Arbitration might be in what language it should be submitted. Guidance may be taken from Article 18. Subject to the power of the tribunal to determine otherwise based upon the contentions of the parties and the circumstances of the arbitration, Article 18 stipulates that the language shall be that of the documents containing the arbitration agreement. The ICDR’s multilingual staff are able to handle most languages likely to be used in the Notice of Arbitration.

2.10  Although Article 2(1) uses the word ‘party’ in the singular and defines the party initiating the arbitration as the ‘Claimant’, while the party against whom a claim is being made is defined as the ‘Respondent’, ICDR arbitrations may involve more than one claimant and/or more than one respondent. In fact, the ICDR Rules are commonly used in multi-party arbitrations, and in the introduction to the International Dispute Resolution Procedures, it is stated that ‘[w]henever a singular term is used in the … International Arbitration Rules, such as “party”, “claimant” or “arbitrator”, that term shall include the plural if there is more than one such entity’. The same applies to the Respondent(s).

2.11  Article 2(1) requires the party initiating arbitration to provide the Notice of Arbitration to the opposing party/parties at the same time as it is filed with the ICDR’s Administrator. The 2014 amendments make clear that, consistent with longstanding ICDR practice, the claimant may (but not must) initiate the arbitration by uploading a copy of the Notice of Arbitration to the web portal provided as part of the ICDR’s online filing system (located at <http://www.icdr.org>).8 Filing with the ICDR can also be achieved by submission via hard copy, mail, or fax.

2.12  Consistent with the advantages of institutional arbitration over ad hoc arbitration, and corresponding with other major institutional arbitration provisions such as Article 4(2) of the ICC Rules and Article 1.4 of the LCIA Rules, arbitration proceedings under the ICDR Rules are deemed to commence on the date on which the Administrator receives the Notice of Arbitration (Article 2(2)).9

2.13  Article 2(5) provides that the ICDR will confirm receipt of the Notice of Arbitration to all parties. Importantly, under the ICDR Rules, commencement of the arbitration does not require successful ‘service’ of the Notice of Arbitration upon the Respondent(s). For purposes of the ICDR Rules, including for triggering the deadlines under the Rules, the arbitration will commence upon receipt of the Notice of Arbitration by the Administrator.

2.14  Despite the unconditional presumption in Article 2(2) that the arbitration ‘shall be deemed to commence on the date on which the Administrator receives the Notice of Arbitration’, (p. 41) at the same time, it is the Claimant that bears the ultimate responsibility for ‘serving’ the Respondent with the Notice of Arbitration and, for that matter, also for securing proper addresses for future communications with the Respondent. Of course, the issue of addresses for notices may well be dealt with in the parties’ underlying contract documents or other legal relationship. But the ICDR Rules also provide a default mechanism for giving notice for purposes of the Notice of Arbitration and otherwise. Article 10(1) provides that, unless otherwise agreed by the parties or ordered by the tribunal, notices may be transmitted by ‘personal service’ or by ‘mail, courier, fax, or other written forms of electronic communication addressed to the party or its representative at its last-known address’.

2.15  In the unsatisfactory scenario of a non-delivery of the Notice of Arbitration on the Respondent, the Claimant will have to bear the risk of proceeding with the arbitration while assuming the risk of non-enforcement.10 However, if the Notice of Arbitration was successfully served upon the ICDR’s Administrator, the arbitration has still been commenced as per Article 2(2). This presumption may be particularly helpful when having to toll any relevant statute of limitations or contractual limitation period while experiencing difficulties in effecting service of the Notice of Arbitration on the proper Respondent.

2.16  In addition to any effect on tolling a statute of limitations, the commencement date establishes the date from which deadlines flow for the filing of a responsive pleading (Article 3(1) and 3(2)), for responding to a claimant’s proposal for the appointment of arbitrators and the method of their selection (Article 12(3)), and for responding to proposals for agreeing the venue and language of the arbitration and indicating any interest in mediation (Article 3(4)).

2.17  The ICDR offers a unique reimbursement mechanism of filing fees in the event of an early settlement of the dispute. For this purpose, the commencement date will be used to calculate any available refund of the initial filing fee if the Claimant has elected the Standard Fee Schedule over the Flexible Fee Schedule.11 The refund schedule on filing fees is available for the Standard Fee Schedule only. No refunds are available under the Flexible Fee Schedule.

2.18  For cases with claims of up to US$75,000, a minimum filing fee of US$600 will not be refunded. Subject to the US$600 minimum filing fee requirements, refunds will be calculated as follows:

  • •  100 per cent of the filing fee, above the minimum fee, will be refunded if the case is settled or withdrawn within five calendar days of filing;

  • •  50 per cent of the filing fee, above the minimum fee, will be refunded if the case is settled or withdrawn between six and thirty calendar days of filing;

  • •  25 per cent of the filing fee, above the minimum fee, will be refunded if the case is settled or withdrawn between thirty-one and sixty calendar days of filing; and

  • •  no refund will be made once an arbitrator has been appointed (this includes one arbitrator on a three-arbitrator panel). No refunds will be granted on cases in which an award is issued.

(p. 42) B.  Content requirements (Article 2(3))

Article 2(3)

The Notice of Arbitration shall contain the following information:

  1. a.  a demand that the dispute be referred to arbitration;

  2. b.  the names, addresses, telephone numbers, fax numbers, and email addresses of the parties and, if known, of their representatives;

  3. c.  a copy of the entire arbitration clause or agreement being invoked, and, where claims are made under more than one arbitration agreement, a copy of the arbitration agreement under which each claim is made;

  4. d.  a reference to any contract out of or in relation to which the dispute arises;

  5. e.  a description of the claim and of the facts supporting it;

  6. f.  the relief or remedy sought and any amount claimed; and

  7. g.  optionally, proposals, consistent with any prior agreement between or among the parties, as to the means of designating the arbitrators, the number of arbitrators, the place of arbitration, the language(s) of the arbitration, and any interest in mediating the dispute.

1.  ‘[D]emand that the dispute be referred to arbitration’ (Article 2(3)(a))

2.19  The key word of Article 2(3)(a) is ‘arbitration’. While the development of modern-day dispute resolution has led to a multitude of sophisticated procedures to end a dispute—including, but not limited to, mediation under the ICDR International Dispute Resolution Procedures—an ICDR arbitration is only started if and when one party demands that the dispute be submitted to ICDR arbitration. A mere request for a decision or resolution will arguably not suffice to initiate arbitration under the ICDR Rules. In order to fulfil the pleading requirements of Article 2(3)(a), the claimant must unequivocally announce its election that the dispute be referred to arbitration.

2.  Contact details of the parties and their representatives (Article 2(3)(b))

2.20  Article 2(3)(b) secures proper identification of the party (or parties) against whom the Claimant(s) wish(es) to proceed and also serves to facilitate future communication and a smooth start of the arbitration by requiring the Claimant(s) to indicate the names, addresses, and telephone numbers, fax numbers, and email addresses of the parties and, if known, of their representatives. In most cases, the information identifying the contact details for the Respondent in the agreement containing the arbitration agreement may suffice.

2.21  To assist proper identification of the parties it is essential to state both first and last name(s) for natural persons. Where known, inclusion of distinguishing information such as the date of birth or US social security number may assist the identification of the party, although it is not strictly necessary. In case of legal persons, the legal nature of the party should not be omitted, and if available, a commercial register excerpt or a certificate of good standing might be added, although it is by no means required.

3.  Copy of ‘the entire arbitration clause or agreement being invoked’, ‘reference to any contract out of or in relation to which the dispute arises’, and ‘a description of the claim and of the facts supporting it’ (Article 2(3)(c), (d), and (e))

2.22  As the Notice of Arbitration represents the first opportunity to advocate the Claimant’s case and to educate the arbitrators about it, the art of persuasion knows no boundaries in (p. 43) articulating ‘a description of the claim and of the facts supporting it’.12 In the absence of strict pleading requirements, the ICDR Rules encourage presentation of a claim in narrative style. Under Article 2(3)(c) and (d) of the 2009 ICDR Rules, it was sufficient to merely ‘reference’ the arbitration clause or agreement and the contract out of or in relation to which the dispute arises. However, attaching complete copies of these documents (sometimes even certified copies, but this is not required) has become common practice. Accordingly, Article 2(3)(c) of the 2014 Rules now expressly requires the Claimant to provide a copy of the entire arbitration clause or agreement being invoked, while it remains acceptable to simply reference the underlying contract to the dispute. When claims are made under more than one arbitration agreement the Claimant is required to provide a copy of the arbitration agreement under which each claim is made. Of note, it is stated in the 2017 International Arbitration Fee Schedule, where the applicable arbitration agreement does not reference the ICDR or AAA, the ICDR will attempt to obtain the agreement of the parties to have the arbitration administered by the ICDR. Should such efforts fail, the Claimant will still be responsible for a US$600 deficient filing fee.

2.23  A well-pled Notice of Arbitration may deal with a description of the contractual/legal situation underlying the dispute and provide a historical account of the events leading up to the dispute. It may also deal with the anticipated opposition arguments, while not losing focus on the Claimant’s own arguments.

2.24  While the ICDR Rules require only a ‘description’ of the supporting facts at this early stage, a Claimant may even produce certain documents on which it wishes to rely in support of its claims. Of course, a well-thought-out plan for winning a case cannot be conceived without understanding the facts and the applicable law from the beginning, but the Notice of Arbitration is only the starting point for articulating a case theory. Inherent in the facts are the equities of the case: the human sense of fairness or unfairness when examining the parties’ acts or omissions; the wrongs that were committed by one party against another; and the injury that was suffered by one or more parties as a result. It should not be forgotten that the Notice of Arbitration will be forwarded to the tribunal once constituted and thus represents the first opportunity for a Claimant to persuade the decision-maker(s) of its claims.

2.25  In light of this, the Claimant may make a tactical decision to include with the Notice of Arbitration an identification of specific causes of action and legal argument in support thereof. However, it is not strictly required: the Notice of Arbitration under Article 2(3) requires only ‘a description of the claim’. The inclusion of a full presentation of all causes of action and an account of all plausible legal arguments in support thereof are optional.

2.26  Notwithstanding the tribunal’s powers under Article 20(3) to ‘direct the parties to focus their presentations on issues whose resolution could dispose of all or part of the case’, the ICDR Rules do not provide in the Notice of Arbitration for ‘motions for judgment on the pleadings’ or for other fast-track procedures of the sort that might be found in civil litigation.13 At least in US practice, some Claimants (and Respondents) in ICDR cases have introduced (p. 44) similar applications by means of a ‘request for award’. However, such requests have been entertained by tribunals only at later stages of the arbitration after the claimant has had an opportunity to present its case, as required under Article 20.14

4.  Relief or remedy sought, any amount claimed (Article 2(3)(f)), and relevance for ICDR administrative fees

2.27  Beyond the relief or remedy sought (payment of money, specific performance, permanent injunction, declaratory judgment), Article 2(3)(f) requires the Claimant to state any amount claimed. The amount stated by the Claimant will be used primarily by the Administrator to determine the initial fee, payable in full when the Notice of Arbitration is filed. The fees payable by the Claimant are based on the amount of the claim and are subject to increase if the amount of a claim is modified after the initial filing date. Fees are also subject to decrease if the amount of a claim is modified before the first hearing. The ICDR administrative practice therefore discourages a claimant from asserting overblown estimates of recoverable damages.

2.28  As will be discussed further, where no monetary claim is quantified or if the amount claimed is otherwise undetermined, the initial filing fee is US$8,625 under the Standard Fee Schedule and US$4,600 under the Flexible Fee Schedule.

5.  Optional contents (Article 2(3)(g))

2.29  At the Claimant’s discretion, the Notice of Arbitration may include proposals as to the means of designating the arbitrators, the number of arbitrators, the place of arbitration, the language(s) of the arbitration, and any interest in mediating the dispute. Any such proposal must be consistent with any prior agreement between or among the parties.

2.30  While an interest to mediate a dispute may best be assessed only after the dispute has arisen, the other items will have been included in well-drafted arbitration clauses and the parties will have agreed upon them in writing already. Indeed, the ICDR recommends that the parties address the number of arbitrators, the place of arbitration, and the language of the arbitration in their arbitration clause.15 The AAA’s online tool ClauseBuilder requires the parties to choose between a clause for ‘Arbitration’ or for ‘Mediation’ followed, if necessary, by ‘Arbitration’.16

2.31  If not already agreed upon in writing, the Claimant may set out its preferences on all of these items as late as within the Notice of Arbitration in the hope that the Respondent accepts one or another of the suggestions.

2.32  Even in cases in which the parties have already agreed upon these items in the arbitration agreement, the circumstances of the case may merit an attempt to change the agreements, for example because of different economic interests and factual scenarios at the time that the dispute arises as compared to when the business relationship was initiated. Since revised Article (p. 45) 2(3)(g) requires that proposals should be consistent with any prior agreement between or among the parties, it might be preferable to entertain party correspondence prior to the preparation of the Notice of Arbitration in order to reach a modified agreement on the relevant issues. However, if the Claimant wants to ensure ipso facto that the tribunal be informed about the parties’ discussions at a later stage, the Notice of Arbitration may be the most appropriate instrument to do so.

2.33  Any proposed qualification that the arbitrator(s) should have—such as the nationality, residence, profession, legal training, language proficiencies, or any other qualification—will aid the Administrator in the appointment should the Administrator be called upon to do so in accordance with Article 12. The ICDR Rules do not require the party initiating arbitration to nominate its arbitrator at the time of filing the Notice of Arbitration, nor do the Rules contain any requirement that the Claimant has to nominate its arbitrator before the Respondent. Article 12 allows the parties to designate the arbitrator(s) within forty-five days after the commencement of the case.17

2.34  Especially in case the parties have had exchanges giving rise to a likelihood of being able to settle the dispute through mediation, the Claimant may also wish to indicate interest in mediating the case to allow the Administrator to invite the parties to mediate in accordance with Article 5 of the 2014 Rules. Mediation is not a mandatory prerequisite to an ICDR arbitration.18

C.  Deficient claim filing fee

2.35  The ICDR’s administrative practice of requiring a complete Notice of Arbitration for the commencement of the case under Article 2 is underlined by the possibility of a deficient claim filing fee if the filing party fails to respond to the ICDR’s request to correct the deficiency.

2.36  The vitality of the ICDR’s proactive case management approach is not only documented by the ICDR’s attempt to secure institutional jurisdiction in cases in which a Notice of Arbitration has been filed, but fails to reference the AAA or ICDR in the underlying arbitration agreement.19 Incomplete Notices of Arbitration or filings that otherwise do not meet the filing requirements contained in the ICDR Rules are also subject to forfeiting US$600 of the initial filing fee.

2.37  As stated in the Fee Schedule:

Parties that file Demands for Arbitration that are incomplete or otherwise do not meet the filing requirements contained in the rules also shall be charged the amount specified above [US$500] for deficient filings if they fail or are unable to respond to the AAA’s request to correct the deficiency.20

(p. 46) D.  Filing fees and ICDR Fee Schedules (Article 2(4))

Article 2(4)

The Notice of Arbitration shall be accompanied by the appropriate filing fee.

2.38  Article 2(4) requires a Claimant to pay the filing fee with the Notice of Arbitration. Previously part of the stand-alone fee schedule, the 2014 amendment added the filing fee payment requirement to the Rules themselves.

2.39  The filing fees are contained in a separate fee schedule that applies to all cases managed under the ICDR Rules, including the International Expedited Procedures, or a case administered under the UNCITRAL Arbitration Rules. Effective 1 June 2010, the ICDR introduced two administrative fee options: the Standard Fee Schedule and the Flexible Fee Schedule. The now current Standard Fee Schedule and the Flexible Fee Schedule became effective 1 October 2017. Arbitrator compensation is not included in either one of them. Pursuant to Article 34, arbitrator compensation and administrative fees are subject to allocation by the arbitrator in the final award. The compensation of the arbitrator for disputes conducted under the International Expedited Procedures will be determined by the Administrator, in consultation with the arbitrator, and in consideration of the specific nature of the case and the amount in dispute.

2.40  The Standard Fee Schedule consists of a two-payment schedule: the initial filing fee and the final fee. The Flexible Fee Schedule consists of a three-payment schedule: the initial filing fee, the proceed fee, and the final fee.

2.41  The Standard Fee Schedule offers lower overall administrative fees if the case will proceed to a hearing. The Flexible Fee Schedule offers lower initial filing fees and is preferable in cases in which the arbitration can be settled before the final hearing on the merits. Depending on the amount in dispute, the total administrative fees under the Flexible Fee Schedule for cases that proceed to a hearing may be higher by approximately 8–21 per cent. But note that the administrative fee is typically only a small portion of the overall costs of an arbitration relative to arbitrator fees, counsel fees, and other expenses.

1.  The Standard Fee Schedule

2.42  The ICDR’s Standard Fee Schedule21 is referenced in the International Dispute Resolution Procedures, and restated here (all in US$):

Amount of claim

Initial filing fee

Final fee

Less than $75,000

$1,000

$1,000

$75,000 to less than $150,000

$2,025

$1,450

$150,000 to less than $300,000

$3,050

$2,300

$300,000 to less than $500,000

$4,600

$4,025

$500,000 to less than $1,000,000

$5,750

$7,125

$1,000,000 to less than $10,000,000

$8,625

$10,350

$10,000,000 and above

$12,650 plus 0.015% of the claim amount above $10,000,000 up to $100,000

$16,100

Undetermined monetary claims

$8,625

$10,350

Nonmonetary claims

$3,750

$2,875

Deficient filing fee

$600

Additional party fees

If there are more than two separately represented parties in the arbitration, an additional 10% of each fee contained in these fee schedules will be charged for each additional separately represented party. However, Additional Party Fees will not exceed 50% of the base fees contained in theses fee schedules unless there are more than 10 separately represented parties.

(p. 47)

2.43  Additional Party Fees are payable by the party, whether a Claimant or Respondent, that names any additional parties to the arbitration.

2.44  A deficient filing fee becomes due in two situations: first, if a party fails to comply with filing requirements under the Rules and the party fails to or is unable to respond to the ICDR’s request to correct the deficiency; second, where the arbitration agreement fails to reference the ICDR or AAA and the administrator needs to close the case because it is unable to obtain the agreement of all parties to have the arbitration administered by the ICDR/AAA.

2.45  In cases with three or more arbitrators constitute the tribunal, the Standard Fee Schedule further provides for ‘a minimum initial filing fee of $5,750 and a Final Fee of $7,125’.

2.46  The initial filing fee is payable in full by a filing party when a claim, counterclaim, or additional claim is filed. The Final Fee will be incurred for all cases that proceed to their first hearing. This fee is payable at the time that the first hearing is scheduled.

2.47  The initial filing fee will be refunded, subject to a US$600 minimum non-refundable fee, if the case is settled or withdrawn, no arbitrator has been appointed, and no award has been rendered as follows: 100 per cent if the case is settled or withdrawn within five calendar days of filing, 50 per cent between six and thirty calendar days of filing, 25 per cent between thirty-one and sixty calendar days of filing. This refund schedule does not apply to cases managed under the International Expedited Procedures.

2.48  The Final Fee can be refunded at the conclusion of the case if no hearings have occurred and if the ICDR’s case administrator was notified of the conclusion of the case at least twenty-four hours before the time of the scheduled hearing.

2.49  Under the Standard Fee Schedule, fees are subject to increase if the claim or counterclaim is increased after the initial filing date (eg in case of consolidation) and to decrease if the claim or counterclaim decreases prior to the first hearing.

(p. 48) 2.  The Flexible Fee Schedule

2.50  Under the Flexible Fee Schedule available for claims above $150,000, the ICDR administrative fees are billed in accordance with the following schedule (all in US$):

Amount of claim

Initial filing fee

Proceed fee

Final fee

$150,000 to less than $300,000

$1,900 $1,950 $2,300

$300,000 to less than $500,000

$2,300

$3,450

$4,025

$500,000 to less than $1,000,000

$2,875

$4,950

$7,125

$1,000,000 to less than $10,000,000

$4,600

$8,050

$10,350

$10,000,000 and above

$6,900

$11,500 plus 0.015% of the claim amount above $10,000,000 up to $100,000

$16,100

Nonmonetary claims

$2,300

$2,600

$2,875

Deficient filing fee

$600

Additional party fees

If there are more than two separately represented parties in the arbitration, an additional 10% of each fee contained in these fee schedules will be charged for each additional separately represented party. However, Additional Party Fees will not exceed 50% of the base fees contained in theses fee schedules unless there are more than ten separately represented parties.

2.51  Cases with three or more arbitrators ‘are subject to a minimum’ initial filing fee of US$2,875, a US$4,950 proceed fee, and a Final Fee of US$7,125.

2.52  Under the Flexible Fee Schedule, both the initial filing fee and the proceed fee are non-refundable either in whole or in part. No refund schedule is available for the Flexible Fee Schedule.

2.53  The initial filing fee is payable in full by a filing party when a claim, counterclaim, or additional claim is filed. The initial filing fee is intended to cover the ICDR’s costs in handling the commencement of the arbitration and notifying parties, as well as establishing the due date for filing of the first responsive pleading under Article 3, which may include a counterclaim.

2.54  In order to proceed with the further administration of the arbitration, including the appointment of the arbitrator(s) and the presentation of the claim(s) or counterclaim(s) to the tribunal, the appropriate Proceed Fee must be paid within ninety days of the filing of the Notice of Arbitration or a counterclaim.

2.55  The ICDR imposes the third administrative fee under the Flexible Fee Schedule—the Final Fee—for all claims and/or counterclaims that proceed to their first hearing. This fee is payable in advance when the first hearing is scheduled, but will be refunded at the conclusion of the case if no hearings have occurred and the Administrator has been notified of a cancellation at least twenty-four hours before the time of the scheduled hearing.

(p. 49) 2.56  Under the Flexible Fee Schedule, fees are subject to increase if the claim or counterclaim is increased after the initial filing date (such as in case of consolidation) and to decrease if the claim or counterclaim decreases prior to the first hearing.

3.  Additional Fees

2.57  The ICDR explicitly reserves the right to assess higher Additional Party Fees where there are more than ten separately represented parties. In addition, the ICDR also reserves the right to assess additional administrative fees for services performed by the ICDR beyond those provided for in the ICDR Rules and which may be required by the parties’ agreement or stipulation.

2.58  The ICDR may rent out hearing rooms to the parties, the costs of which are dealt with separately from the Fee Schedule.

4.  The Mediation Fee Schedule

2.59  Under the Mediation Fee Schedule, the ICDR (or AAA) calculates the costs of its services based on the amount of hours billed by the mediator appointed to the case. For each hour the mediator bills the ICDR/AAA charges another US$75. Parties are also required to pay a US$250 non-refundable deposit to initiate the ICDR’s administration of the mediation and appointment of the mediator. The deposit will be applied towards the cost of mediation. In addition, there is also a four-hour or one half-day minimum charge for a mediation conference.

2.60  The costs for the mediator are determined in accordance with the hourly or daily mediation rate published on the mediator’s ICDR/AAA profile.

2.61  If the matter is withdrawn, cancelled, or settled before the mediation conference takes place, the cost of mediation amounts to US$250 for the Administrator, plus any time already spent by the mediator as well as and any additional charges already incurred. Unless the parties agree otherwise (as is often the case), the initiating party has to bear these costs.

5.  Non-payment of administrative fees and abeyance

2.62  In accordance with Article 36(4), the ICDR will inform the parties in case of non-payment of administrative fees in full or in part, so that one of them may advance the required payment. Should none of the parties make an advance, the ICDR or, if already appointed, the tribunal may order the suspension or termination of the proceedings.

2.63  Parties may also agree to hold in abeyance a case on an annual basis under either of the Flexible or Standard Fee Schedules. The ICDR’s annual abeyance fee is US$600. If a party refuses to pay the assessed fee, the other party/parties may pay the entire fee on behalf of all parties; otherwise, the matter will be administratively closed.

E.  Administrator’s acknowledgement of commencement (Article 2(5))

Article 2(5)

Upon receipt of the Notice of Arbitration, the Administrator shall communicate with all parties with respect to the arbitration and shall acknowledge the commencement of the arbitration.

(p. 50) 2.64  Upon receipt of the Notice of Arbitration, the Administrator acknowledges the commencement of the arbitration and starts communicating with all parties by means of an initiation letter.22

2.65  It is the ICDR’s standard administrative practice to notify the parties of their responsible case manager and supervisor within the initiation letter. At this time, the ICDR distributes its checklist for conflicts and encloses an arbitration information sheet, which provides basic information about the ICDR arbitration process. The initiation letter may also set forth initial case management dates, such as the time for the administrative conference call.23 Moreover, the administrator invites the Respondent to file its answer and any counterclaim in accordance with Article 3.

2.66  As part of the ICDR’s administration of the arbitration, it maintains a AAA WebFile for each case. With the initiation letter, the ICDR invites the parties to set up log-in credentials to take advantage of the AAA’s WebFile. WebFile enables the parties to perform a variety of case-related activities online, including: the filing of additional claims;24 the completion of the checklist for conflicts form; viewing invoices and submitting payments; sharing and managing documents; striking and ranking the lists of proposed arbitrators; and reviewing the case status, hearing dates, and times. Cases filed in hard-copy format are posted electronically and can then be viewed and managed online as well. The tribunal also has access to WebFile and may use it as a platform for managing the arbitration.

Footnotes:

1  See Arts 3 and 18 of the 1976 UNCITRAL Arbitration Rules, and Arts 3 and 20 of the 2010 UNCITRAL Rules.

2  See discussion of Art 12 at paras 12.18–12.37.

3  ‘Parties that file Demands for Arbitration that are incomplete or otherwise do not meet the filing requirements contained in the rules shall also be charged the amount specified for deficient filings if they fail or are unable to respond to the AAA’s request to correct the deficiency.’ See <http://www.icdr.org/feeschedule>.

4  A manifestly deficient Notice of Arbitration will not be accepted for filing. But the ICDR does not otherwise perform a ‘gatekeeper’ function with respect to the Notice of Arbitration.

5  LM Martinez, ‘A Guide to ICDR Case Management’, in G Hanessian (ed), ICDR Awards and Commentaries 10 et seq, in particular 12–13 (Juris, Huntington, New York, 2012), citing to International Medical Group, Inc v American Arbitration Ass’n, Inc, 312 F3d 833 (7th Cir 2002) (‘no rule or principle required the AAA to make a searching analysis of the claim’s merits prior to placing it on the docket—scheduling the matter if you will—the AAA’s role was analogous to that of a court clerk placing the matter on the schedule for the arbitrator to hear’).

6  See Administrative Fees under the ICDR Rules, amended and effective 1 July 2016, available at <http://www.adr.org/sites/default/files/ICDR%20Fee%20Schedule.pdf> (‘A non-refundable Initial Filing Fee is payable in full by a filing party when a claim, counterclaim, or additional claim is filed’).

7  Available at <http://www.adr.org>.

8  While the ICDR’s case filing services are physically located in Voorhees, New Jersey, online filing has become the user’s preference more and more often. In 2012, 185 cases had already been filed through the ICDR’s webfile system. See The ICDR International Arbitration Reporter 34 (Vol 4, September 2013). For online filing, see <https://www.adr.org/sites/default/files/document_repository/AAA_Voorhees_CaseFiling.pdf >, Case Filing Services: ‘With the creation of AAA Case Filing Services, customers have an easy, fast and efficient process for filing any type of dispute resolution case, regardless of geographical location. Case Filing Specialists will assess each case to ensure that all information is complete and will contact filers if there are any questions about the case. The Specialists are also on-hand to assist customers with case-filing questions’; see also LM Martinez, ‘A Guide to ICDR Case Management’, in G Hanessian (ed), ICDR Awards and Commentaries 10 et seq, in particular 12–13 (Juris, Huntington, New York, 2012).

9  Compare Art 3(2) of the 2010 UNCITRAL Rules, which provides for the arbitral proceedings to commence on the date on which the notice of arbitration is received by the respondent.

10  See Art 26 (discussing default proceedings) para 26.01 ff.

11  See para 2.38 ff.

12  See generally RD Bishop, The Art of Advocacy in International Arbitration (Juris, Huntington, New York, 2004) 445.

13  Compare Rules 12(b)(6), 12(c), and 56 of the Federal Rules of Civil Procedure in the US federal legal system.

14  See Memorandum and Order of 9 December 2009, Matthew v Papua New Guinea, Case No 09 Civ 3851 (LTS) (SDNY, 2009) (discussing an arbitrator’s treatment of a request for award as a ‘directed verdict in a non-jury case for failure to prove one essential element of the claim’).

15  See, Drafting Dispute Resolution Clauses—A Practical Guide (2013), available at <https://www.adr.org/sites/default/files/document_repository/Drafting%20Dispute%20Resolution%20Clauses%20A%20Practical%20Guide.pdf>.

17  See discussion of Art 12, paras 12.18–12.37.

18  See discussion if Art 5, paras 5.02–5.05.

19  See Art 1 at para 1.06.

20  Administrative Fee Schedules (Standard and Flexible Fees), amended and effective 1 October 2017. See <http://www.icdr.org/feeschedule>.

21  The Fee Schedule was previously set out at the end of the Rules. It is now contained in a separate document available at <http://www.adr.org/aaa/faces/rules/searchrules>. As the Fee Schedule is subject to periodic adjustment, it is important to ensure that the correct version is identified at the commencement of the arbitration.

22  See ICDR, ‘How to File Your Arbitration Case’, available at <https://www.adr.org/sites/default/files/document_repository/How%20to%20File%20Your%20Arbitration%20Case.pdf>.

23  ibid.

24  See Art 9 at paras 9.06–9.11.