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A Guide to the ICDR International Arbitration Rules, 2nd Edition by Gusy, Martin F; Hosking, James M (21st February 2019)

Part I Commentary on the ICDR International Rules, 8 Article 8—Consolidation

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: 25 August 2019

Subject(s):
Arbitration

(p. 90) Article 8—Consolidation

Article 8

  1. 1.  At the request of a party, the Administrator may appoint a consolidation arbitrator, who will have the power to consolidate two or more arbitrations pending under these Rules, or these and other arbitration rules administered by the AAA or ICDR, into a single arbitration where:

    1. a.  the parties have expressly agreed to consolidation; or

    2. b.  all of the claims and counterclaims in the arbitrations are made under the same arbitration agreement; or

    3. c.  the claims, counterclaims, or setoffs in the arbitrations are made under more than one arbitration agreement; the arbitrations involve the same parties; the disputes in the arbitrations arise in connection with the same legal relationship; and the consolidation arbitrator finds the arbitration agreements to be compatible.

  2. 2.  A consolidation arbitrator shall be appointed as follows:

    1. a.  The Administrator shall notify the parties in writing of its intention to appoint a consolidation arbitrator and invite the parties to agree upon a procedure for the appointment of a consolidation arbitrator.

    2. b.  If the parties have not within 15 days of such notice agreed upon a procedure for appointment of a consolidation arbitrator, the Administrator shall appoint the consolidation arbitrator.

    3. c.  Absent the agreement of all parties, the consolidation arbitrator shall not be an arbitrator who is appointed to any pending arbitration subject to potential consolidation under this Article.

    4. d.  The provisions of Articles 13–15 of these Rules shall apply to the appointment of the consolidation arbitrator.

  3. 3.  In deciding whether to consolidate, the consolidation arbitrator shall consult the parties and may consult the arbitral tribunal(s) and may take into account all relevant circumstances, including:

    1. a.  applicable law;

    2. b.  whether one or more arbitrators have been appointed in more than one of the arbitrations and, if so, whether the same or different persons have been appointed;

    3. c.  the progress already made in the arbitrations;

    4. (p. 91) d.  whether the arbitrations raise common issues of law and/or facts; and

    5. e.  whether the consolidation of the arbitrations would serve the interests of justice and efficiency.

  4. 4.  The consolidation arbitrator may order that any or all arbitrations subject to potential consolidation be stayed pending a ruling on a request for consolidation.

  5. 5.  When arbitrations are consolidated, they shall be consolidated into the arbitration that commenced first, unless otherwise agreed by all parties or the consolidation arbitrator finds otherwise.

  6. 6.  Where the consolidation arbitrator decides to consolidate an arbitration with one or more other arbitrations, each party in those arbitrations shall be deemed to have waived its right to appoint an arbitrator. The consolidation arbitrator may revoke the appointment of any arbitrators and may select one of the previously-appointed tribunals to serve in the consolidated proceeding. The Administrator shall, as necessary, complete the appointment of the tribunal in the consolidated proceeding. Absent the agreement of all parties, the consolidation arbitrator shall not be appointed in the consolidated proceeding.

  7. 7.  The decision as to consolidation, which need not include a statement of reasons, shall be rendered within 15 days of the date for final submissions on consolidation.

I.  Introduction

8.01  Article 8 provides for consolidation of two or more proceedings upon party request with the decision on whether and how to permit consolidation to be made by a consolidation arbitrator. This is a unique ICDR innovation introduced with the 2014 amendments. The ICDR ‘may appoint a consolidation arbitrator, who will have the power to consolidate two or more arbitrations pending under these Rules’, or any other set of rules administered by the AAA or ICDR, into a single arbitration. This means that, at least in theory, provided that the other requirements of Article 8 are satisfied, the consolidation arbitrator could consolidate an arbitration that is pending under two different, albeit related, sets of rules. The objective of this provision is to achieve a more time- and cost-efficient resolution of the entire dispute and to avoid inconsistent decisions.

8.02  With the increasing number of multi-party and/or multi-contract disputes, most international institutional rules now contain provisions on consolidation, including the ICC Rules in Article 10, the SCC Rules in Article 11, and the Swiss Rules in Article 4. In contrast, the LCIA Rules and the UNCITRAL Rules do not contain provisions on consolidation. Under the LCIA Rules and the UNCITRAL Rules, consolidation is only possible if the parties’ arbitration agreement at least impliedly allows consolidation of two or more pending arbitrations.1 While many other sets of institutional rules authorize either an existing tribunal or the institution to decide whether consolidation is appropriate, the ICDR Rules are unique in using an independent arbitrator to decide whether consolidation is appropriate.2

8.03  Article 8 of the ICDR Rules mirrors Article 10 of the ICC Rules in part. Both Article 8 of the ICDR Rules and Article 10 of the ICC Rules set forth identical situations under which consolidation is allowed. Under both sets of rules, all relevant circumstances shall be taken (p. 92) into account to decide whether it is appropriate to consolidate two or more pending arbitrations and under both rules, the arbitrations are by default consolidated into the arbitration that commenced first.

8.04  The consolidation arbitrator is only permitted to order consolidation in three circumstances:

  1. (1)  Where the parties expressly agree to consolidation;

  2. (2)  Where all claims and counterclaims in the arbitrations are made under the same arbitration agreement; or

  3. (3)  Where (i) the claims, counterclaims, or set-offs in the arbitrations are made under more than one arbitration agreement; (ii) the arbitrations involve the same parties; (iii) the disputes in the arbitrations arise in connection with the same legal relationship; and (iv) the consolidation arbitrator determines that the arbitration agreements are compatible’.3

8.05  Once the ICDR Administrator receives a request for consolidation, it notifies the parties in all arbitrations of its intention to appoint a consolidation arbitrator and invites the parties to agree on the appointment procedure.4 If the parties fail to reach an agreement within fifteen days, the ICDR will appoint the consolidation arbitrator.5 Unless the parties agree otherwise, the ICDR may not appoint as the consolidation arbitrator an arbitrator who is sitting in any of the arbitrations that are potentially subject to consolidation.6 The consolidation arbitrator is subject to the same provisions on independence and impartiality, challenges, and replacement as any other arbitrator.7

8.06  Once the consolidation arbitrator is appointed, he or she must consult with the parties and may consult with the tribunal(s) in the extant arbitrations.8 In deciding whether to consolidate an arbitration, the consolidation arbitrator may take into account ‘all relevant circumstances’, which may include the applicable law, whether one or more arbitrators have been appointed in more than one arbitration, the progress in the arbitrations, whether the arbitrations raise common issues of law and/or facts, and whether consolidation would ‘serve the interests of justice and efficiency’.9 During the consolidation proceeding, the consolidation arbitrator may stay any or all arbitrations subject to the consolidation request.10

8.07  The consolidation arbitrator must render a decision within fifteen days after the final submissions from the parties or arbitrators on consolidation.11 Unlike awards under the ICDR Rules, this decision need not be reasoned.12

8.08  If consolidation is ordered, the arbitrations will be consolidated into the one arbitration that was commenced first, unless otherwise agreed by the parties or determined by the consolidation arbitrator.13 The parties in the consolidated arbitrations are ‘deemed to have waived (p. 93) [their] right to appoint an arbitrator’.14 The consolidation arbitrator has the authority to appoint one of the existing tribunals to serve as tribunal of the consolidated arbitration and may also revoke any arbitrator’s appointment.15 Absent agreement by all parties, the consolidation arbitrator may not appoint himself or herself to the tribunal of the consolidated arbitration.16

8.09  Four years into its existence, a consolidation arbitrator has yet to be appointed under the ICDR Rules. ICDR senior management emphasizes that the detailed procedure set forth in the rules has helped the parties reach agreement on the consolidation of proceedings without the need for involvement of a consolidation arbitrator.17

II.  Textual commentary

A.  Prerequisites for consolidation (Article 8(1))

Article 8(1)

At the request of a party, the Administrator may appoint a consolidation arbitrator, who will have the power to consolidate two or more arbitrations pending under these Rules, or these and other arbitration rules administered by the AAA or ICDR, into a single arbitration where:

  1. a.  the parties have expressly agreed to consolidation; or

  2. b.  all of the claims and counterclaims in the arbitrations are made under the same arbitration agreement; or

  3. c.  the claims, counterclaims, or setoffs in the arbitrations are made under more than one arbitration agreement; the arbitrations involve the same parties; the disputes in the arbitrations arise in connection with the same legal relationship; and the consolidation arbitrator finds the arbitration agreements to be compatible.

1.  Power to consolidate into a single arbitration

8.10  The power to consolidate rests with the consolidation arbitrator, who can only be appointed by the Administrator following a request of a party. It is the consolidation arbitrator that has power to consolidate two or more arbitrations pending under the ICDR Rules or other arbitration rules administered by the AAA or ICDR, into a single arbitration. Article 8(1) is clear in that the Administrator may not appoint a consolidation arbitrator without the request of one of the parties and Article 8(1) is also clear in that it is not the tribunal appointed to decide the dispute overall that may order consolidation of two or more pending arbitrations.18

8.11  Once appointed, the consolidation arbitrator has the power to consolidate or reject the consolidation request and ‘may take into account all relevant circumstances’ in deciding whether to consolidate.19 Article 8(1) specifies three circumstances under which the consolidation (p. 94) arbitrator is expressly empowered to consolidate. While some may argue that any consolidation of two or more arbitration proceedings in circumstances not envisioned by Article 8(1) would violate the parties’ consent to arbitrate and, thus, would deprive the tribunal of the consolidated arbitration of its jurisdiction, it is worth repeating that Article 8(3) affords the consolidation arbitrator broad discretion and itemizes a set of relevant circumstances to take into account.20

8.12  The consolidation arbitrator’s power includes the power to consolidate arbitration under the ICDR Rules and other arbitration rules administered by the AAA or ICDR. This would include the CAMCA Rules, IACAC Rules and ICANN Rules, all, administrated by the ICDR, as well as the AAA Commercial Rules, the AAA Construction Industry Arbitration Rules and Mediation Procedures, as well as the many other sets of rules administered by the AAA. At least in theory, provided that the other requirements of Article 8 are satisfied, the consolidation arbitrator could consolidate an arbitration that is pending under two different sets of rules. Arguably, provided the ICDR and/or AAA would administer an ad hoc arbitration under the UNCITRAL Rules—and the other requirements of Article 8 are met—consolidation of institutional and ad hoc arbitration would be within the consolidation arbitrator’s express powers under Article 8(1).

2.  The parties have expressly agreed to consolidation

8.13  Article 8(1)(a) recognizes the principle of party autonomy and allows the parties to expressly agree to consolidate their cases. Their agreement to consolidate their cases into one single arbitral tribunal must not be in contradiction of the Rules and could be made effective without the appointment of a consolidation arbitrator.

8.14  In the agreement to consolidate, the parties should deal with several issues that frequently occur when cases are consolidated. First, the parties should agree on the place of arbitration, unless it is the same in all pending proceedings.21 Second, the parties should provide for the appointment of the arbitrators of the tribunal sitting in the single arbitration, and if needed discharge the arbitrators already appointed in the pending arbitrations.22 Third, the parties should agree which of the AAA/ICDR arbitration rules apply where the pending arbitrations are governed by different AAA/ICDR rules; or address any conflict that may arise from the application of different sets of AAA/ICDR-administered arbitration rules.

3.  All of the claims are made under the same arbitration agreement

8.15  If all of the claims and counterclaims in the arbitrations are made under the same arbitration agreement, it will normally be more efficient to solve the entire dispute among all parties in a single arbitration. Thus, Article 8(1)(b) empowers the consolidation arbitrator, upon request, to consolidate several pending arbitrations even if a party objects and even if the parties in the already pending arbitrations are not identical.23

(p. 95) 4.  The claims are made under more than one arbitration agreement

8.16  Where the claims, counterclaims, or set-offs are made under more than one arbitration agreement, the consolidation arbitrator may only consolidate the cases into a single arbitration if the following three conditions are met: (1) the arbitrations are between the same parties; (2) the disputes in the arbitrations arise in connection with the same legal relationship; and (3) the consolidation arbitrator finds the arbitration agreements to be compatible.

8.17  A dispute arises ‘in connection with the same legal relationship’ if they arise in connection with the same economic transaction.24 This requirement will often be met in shared construction projects and joint venture agreements.

8.18  As for the third requirement, international practice has shown that arbitration agreements need to be deemed incompatible if they select different arbitral seats or provide for substantially different methods of appointment of the arbitrators.25 Different laws applicable to the merits of the case do not necessarily render the arbitration agreements incompatible.26

8.19  While capable counsel will always be able to argue incompatibility between non-identical arbitration agreements, a balanced exercise of the consolidation arbitrator’s powers will necessarily require a finding benefiting procedural economy without hindering a party in its right to be heard and having a fair opportunity to present its case, ie serve the interests of justice and efficiency as per Article 8(3).

B.  Appointment of the consolidation arbitrator (Article 8(2))

Article 8(2)

A consolidation arbitrator shall be appointed as follows:

  1. a.  The Administrator shall notify the parties in writing of its intention to appoint a consolidation arbitrator and invite the parties to agree upon a procedure for the appointment of a consolidation arbitrator.

  2. b.  If the parties have not within 15 days of such notice agreed upon a procedure for appointment of a consolidation arbitrator, the Administrator shall appoint the consolidation arbitrator.

  3. c.  Absent the agreement of all parties, the consolidation arbitrator shall not be an arbitrator who is appointed to any pending arbitration subject to potential consolidation under this Article.

  4. d.  The provisions of Articles 13–15 of these Rules shall apply to the appointment of the consolidation arbitrator.

(p. 96) 8.20  Article 8(2) sets forth the appointment process for the sole consolidation arbitrator. As a first step, the Administrator will notify the parties in writing of its intention to appoint a consolidation arbitrator and invite them to agree within fifteen days upon a procedure for such appointment. The time limit to agree upon a procedure for the appointment of the consolidation arbitrator under Article 8(2)(b) is purposely shorter than the corresponding forty-five-day time limit for the appointment of the arbitrators deciding the parties’ dispute overall. This shorter time limit ensures that the consolidation decision can be taken quickly in order to minimize any negative cost and time impact on the pending arbitrations.

8.21  If the parties fail to reach an agreement upon the procedure for the appointment of the consolidation arbitrator within fifteen days, the Administrator shall appoint the consolidation arbitrator directly. The Administrator may not appoint as consolidation arbitrator any arbitrator who is appointed to any pending arbitration that potentially is subject to consolidation. This ensures continued impartiality and independence of all arbitrators involved. This rule is complemented by Article 8(6), which states that ‘[a]bsent the agreement of all parties, the consolidation arbitrator shall not be appointed in the consolidated proceeding’.

8.22  Article 8(2)(d) makes clear that Articles 13–15 of the ICDR Rules apply to the consolidation arbitrator. Thus, any consolidation arbitrator ‘shall be impartial and independent’, ‘shall sign the Notice of Appointment’, ‘shall disclose any circumstances that may give rise to justifiable doubts as to the arbitrator’s impartiality or independence’, ‘may [be] challenge[d] whenever circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence’, and can be replaced in accordance with Article 15 of the Rules.27 Article 8(2) does not require the Administrator to follow the list procedure incorporated in Article 12(6).

C.  A consolidation decision based on all relevant circumstances (Article 8(3))

Article 8(3)

In deciding whether to consolidate, the consolidation arbitrator shall consult the parties and may consult the arbitral tribunal(s) and may take into account all relevant circumstances, including:

  1. a.  applicable law;

  2. b.  whether one or more arbitrators have been appointed in more than one of the arbitrations and, if so, whether the same or different persons have been appointed;

  3. c.  the progress already made in the arbitrations;

  4. d.  whether the arbitrations raise common issues of law and/or facts; and

  5. e.  whether the consolidation of the arbitrations would serve the interests of justice and efficiency.

1.  All relevant circumstances

8.23  While Article 8(1) states that the consolidation arbitrator has ‘the power to consolidate two or more arbitrations’, Article 8(3) emphasizes the consolidation arbitrator’s discretion,28 and (p. 97) contains the imperative in exercising this discretion: the consolidation arbitrator ‘may take into account all relevant circumstances’, including the non-exclusive circumstances listed in Article 8(3).

8.24  When assessing all relevant circumstances in favour of and against consolidation, the consolidation arbitrator should bear in mind the objective of consolidation. Consolidation aims to achieve a more time- and cost-efficient resolution of the entire dispute and to avoid inconsistent decisions.29

8.25  The first relevant circumstance mentioned in Article 8(3) is the ‘applicable law’. The mere fact that different laws apply to the merits of the cases will generally not be an obstacle to consolidate two or more pending arbitrations because experienced arbitrators in international arbitration commonly and without great difficulty deal with various applicable laws in the same proceedings. This may be different where a case involves very difficult legal questions in highly specialized areas of the law. In contrast, the fact that vastly different procedural laws apply to the arbitrations will generally render the arbitration agreements incompatible and, thus, may bar consolidation.30

8.26  The second relevant circumstance stated in Article 8(3) is ‘whether one or more arbitrators have been appointed in more than one of the arbitrations and, if so, whether the same or different persons have been appointed’. Arbitrations will rarely be consolidated where different arbitrators have already been appointed in the pending arbitrations. The reason for this lies in the difficulties to select the arbitrators for the consolidated arbitration without violating the parties’ right to select their arbitrators.31 The ICDR Rules arguably allow for a more flexible approach because Article 8(5) of the ICDR Rules contains an express waiver of the parties’ right to appoint their own arbitrators and also provides for a balanced appointment process of the arbitrators in case of a consolidated proceeding.32 The fact that one or more arbitrators have already been appointed in more than one of the arbitrations, by itself, can hardly justify a consolidation denial.

8.27  The third relevant circumstance identified in Article 8(3) is ‘the progress already made in the arbitrations’. Generally, the more progress has already been made in all pending arbitrations the less beneficial it will be to consolidate the pending arbitrations. However, progress is not necessarily an obstacle to consolidation, in particular where the time spent by the arbitrators and the parties in the pending arbitration can be used in the consolidated arbitration. This may be the case where an arbitration was solely focused on jurisdictional questions at the time of consolidation and the tribunal has rendered a separate award on jurisdiction, which would be binding in the consolidated proceedings.

8.28  The fourth relevant circumstance listed in Article 8(3) is ‘whether the arbitrations raise common issues of law and/or facts’. Common issues of law and/or facts provide a strong argument for consolidation. Common issues of law and/or facts will in all likelihood require (p. 98) consistent decisions, which can easily be achieved through consolidated proceedings. In addition, the arbitrators deciding the consolidated case will likely spend considerably less time in such a scenario.

8.29  The fifth and last relevant circumstance indicated in Article 8(3) is the consolidation arbitrator’s imperative to consider ‘whether the consolidation of the arbitrations would serve the interests of justice and efficiency’. This analysis will depend highly upon the circumstances of the particular case at hand.

8.30  Relevant circumstances not specifically mentioned in Article 8(3) may include difficulties in appointing suitable arbitrators where the pending arbitrations would require arbitrators with different language skill sets, or any confidentiality concerns created by the consolidation of the pending arbitration, in particular where the parties are not identical.

2.  Procedural aspects

8.31  Using the word ‘shall’, Article 8(3) requires the consolidation arbitrator to consult the parties before making a decision. This requirement safeguards the parties’ right to be heard. Article 8(3) does not prescribe how the parties should be consulted but Article 8(7) envisions as a possible means ‘submissions on consolidation’.

8.32  The consolidation arbitrator also may, but does not need to, consult with the extant arbitral tribunal(s). This flexible approach especially allows for the consolidation arbitrator to consult the tribunal(s) of the pending arbitrations where the parties have different views on whether the arbitrations should be consolidated and provide different facts and analyses thereof with regard to the circumstances relevant for the decision on consolidation. In such a case, the tribunal(s) of the pending arbitrations may provide the consolidation arbitrator with additional objective views on the relevant circumstances.

8.33  The consolidation arbitrator should conduct the consolidation proceedings ‘in whatever manner it considers appropriate, provided that the parties are treated with equality and that each party has the right to be heard and is given a fair opportunity to present its case’.33 The consolidation arbitrator should further conduct the consolidation proceedings in the spirit of the ICDR Rules, and in particular ‘conduct the proceedings with a view to expediting the resolution of the dispute’.34

D.  Stay pending consolidation decision (Article 8(4))

Article 8(4)

The consolidation arbitrator may order that any or all arbitrations subject to potential consolidation be stayed pending a ruling on a request for consolidation.

8.34  Article 8(4) enables the consolidation arbitrator to stay any pending arbitration while ruling on a request for consolidation of same. This rule provides a flexible solution to avoid unnecessary costs and efforts during the time it takes the consolidation arbitrator to render its decision. The time spent by the arbitrators that will be discharged of their duties as a consequence (p. 99) of the consolidation will often be lost if the arbitrations are later consolidated. In addition, submissions may need to be amended and/or re-submitted. Thus, Article 8(4) provides the consolidation arbitrator with a tool to minimize or prevent such potential negative impacts on overall efficiency.

8.35  The consolidation arbitrator may stay any or all arbitrations subject to potential consolidation, ie one, two, or all of the arbitrations subject to potential consolidation. Often, procedural economy may only be served with a stay of all ongoing arbitrations subject to potential consolidation. This approach may be particularly appropriate where it is sensible to select the previously appointed tribunals of the arbitration that is not being stayed to serve in the consolidated proceeding.

E.  Consolidation into first arbitration (Article 8(5))

Article 8(5)

When arbitrations are consolidated, they shall be consolidated into the arbitration that commenced first, unless otherwise agreed by all parties or the consolidation arbitrator finds otherwise.

8.36  The arbitrations shall be consolidated into the arbitration that commenced first, unless otherwise agreed by all parties or the consolidation arbitrator finds otherwise. However, the consolidation arbitrator may also find that it is more appropriate to consolidate the arbitration into an arbitration that commenced later. This may be the case where more progress has been made in the arbitration that commenced later or where the arbitration that commenced later involves claims with a considerably higher amount in dispute.

F.  The right to appoint the tribunal (Article 8(6))

Article 8(6)

Where the consolidation arbitrator decides to consolidate an arbitration with one or more other arbitrations, each party in those arbitrations shall be deemed to have waived its right to appoint an arbitrator. The consolidation arbitrator may revoke the appointment of any arbitrators and may select one of the previously-appointed tribunals to serve in the consolidated proceeding. The Administrator shall, as necessary, complete the appointment of the tribunal in the consolidated proceeding. Absent the agreement of all parties, the consolidation arbitrator shall not be appointed in the consolidated proceeding.

8.37  Consolidating arbitrations involves important issues with respect to the parties’ right to select or at least equally participate in the appointment of arbitrators and the composition of the tribunal. This is particularly true where arbitrations with different parties are consolidated into a single arbitration.35

8.38  Article 8(6) addresses the parties’ right to select or at least equally participate in the appointment of arbitrators. It sets forth a flexible and balanced procedure to appoint the (p. 100) arbitrators in the consolidated proceedings. Article 8(6) further contains the parties’ waiver to appoint their own arbitrator and entrusts this task to the consolidation arbitrator and the Administrator. Under this provision, the consolidation arbitrator may revoke the appointment of any arbitrator that has already been appointed and may select one of the previously appointed tribunals to serve in the consolidated proceeding. However, the consolidation arbitrator may not independently appoint an arbitrator and may not select solely some of the arbitrators of the previously appointed tribunals to serve in the consolidated proceeding.

8.39  The Administrator will complete the appointment of the tribunal in the consolidated proceeding, where necessary. The consolidation arbitrator may not be appointed in the consolidated proceeding, unless all parties agree otherwise.

8.40  To minimize problems at the enforcement stage, the consolidation arbitrator or the Administrator must give due consideration to the particular circumstances of the case in order to prevent any violation of the parties’ right to select or at least equally participate in the appointment of arbitrators. Accordingly, Article 8(6) empowers the consolidation arbitrator to revoke the appointment of any arbitrators and to select one of the previously appointed tribunals to serve in the consolidated proceeding. While such an approach might serve procedural efficiency, the consolidation arbitrator should refrain from only revoking one appointment where one of the parties in the consolidated arbitration has not participated in the selection of the previously appointed tribunal.36

G.  An unreasoned decision within fifteen days (Article 8(7))

Article 8(7)

The decision as to consolidation, which need not include a statement of reasons, shall be rendered within 15 days of the date for final submissions on consolidation.

1.  Unreasoned within fifteen days

8.41  Unlike final awards under the ICDR Rules, the consolidation arbitrator may, but does not have to provide reason in its decision on consolidation. In order to avoid any unnecessary delays in the arbitrations, the consolidation arbitrator is required to render its decision within fifteen days of the date for final submissions on consolidation. The consolidation arbitrator should set a reasonable short timetable for submission of briefing to ensure a speedy and cost-efficient resolution of the consolidation request.

2.  Effect of consolidation arbitrator’s decision

8.42  As to the character of the decision by the consolidation arbitrator pursuant to Article 8, there are good reasons not to treat it as an award. At least one early view is that ‘the consolidation arbitrator issues a decision, not an award’.37 This is supported by Article 8(7) of the Rules using the terms ‘decision as to consolidation’, while Article 29 of the Rules distinguishes (p. 101) between ‘final award[s] interim, interlocutory, or partial awards, orders, decisions, and rulings’. In addition, if one were to classify the ‘decision as to consolidation’ as an award it increases the risks of an independent review of the ‘decision as to consolidation’ by local courts.

8.43  The parties and the tribunal may not question whether the ‘decision as to consolidation’ was appropriate under the specific circumstances of the case. There is no basis in the rules that would allow the tribunal to review or modify the ‘decision as to consolidation’ based on a flawed consideration by the consolidation arbitrator of the relevant circumstances set forth in Article 8(3). Procedural efficiency strongly weighs against the possibility to revisit the consolidation arbitrator’s decision. Furthermore, Article 8(1) and (3) expressly entrust the consolidation arbitrator—not the arbitrators—with the power to issue a decision on consolidation based on discretionary factors.

8.44  However, the arbitral tribunal retains the power to decide any jurisdictional issues under Article 19 of the Rules. In particular the tribunal may decide whether all of the claims, counterclaims, and set-offs made in the arbitration properly belong in front of the tribunal.38 To the extent that this requires a review of the decision as to consolidation, it should be strictly limited to jurisdictional questions, namely whether the parties consented to consolidation. Where the parties did not consent to consolidation, the tribunal lacks jurisdiction to hear all claims in a consolidated proceeding. Of course, there is still the possibility that the final award based on the consolidation arbitrator’s decision may be subject to review, on the basis of jurisdiction, at the place of arbitration.

8.45  The parties’ consent to consolidation is contained in Article 8(1) which empowers the consolidation arbitrator to consolidate two or more pending arbitrations. This consent is conditioned upon the existence of one of the three situations listed in Article 8(1), namely where: ‘a. the parties have expressly agreed to consolidation; or b. all of the claims and counterclaims in the arbitrations are made under the same arbitration agreement; or c. the claims, counterclaims, or setoffs in the arbitrations are made under more than one arbitration agreement; the arbitrations involve the same parties; the disputes in the arbitrations arise in connection with the same legal relationship; and the consolidation arbitrator finds the arbitration agreements to be compatible’. Thus, the tribunal in the consolidated arbitration has the power to review whether these prerequisites are given. Without them a consolidation arbitrator lacks the power to consolidate.39

Footnotes:

1  GB Born, International Commercial Arbitration (2nd edn, Kluwer Law International, The Hague, 2014) 2597.

2  Gordon Smith, ‘Comparative Analysis of Joinder and Consolidation Provisions under Leading Arbitral Rules’, 35(2) J Int’l Arb 173–202 (2018).

3  Art 8(1).

4  Art 8(2)(a).

5  Art 8(2)(b).

6  Art 8(2)(c).

7  Art 8(2)(d).

8  Art 8(3).

9  ibid.

10  Art 8(4).

11  Art 8(7).

12  ibid.

13  Art 8(5).

14  Art 8(6).

15  ibid.

16  ibid.

17  Interview with ICDR senior management, October 2018.

18  See J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 122.

19  Art 8(3).

20  See paras 8.23–8.33. See also H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International, 2015) 61–62; GB Born, International Commercial Arbitration (2nd edn, Kluwer Law International, The Hague, 2014) 2569–70, 2573.

21  See H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International, 2015) 62.

22  See ibid.

23  See J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 124; H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International, 2015) 62.

24  H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International, 2015) 63; J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 124, citing AM Whitesell and ES Romero, ‘Multiparty and Multicontract Arbitration: Recent ICC Experience’, Complex Arbitrations—ICC Court Bulletin Special Supplement 16 (2003). (For the purpose of Article 4(6), ‘ “same legal relationship” would appear to mean the same economic transaction’.)

25  H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International, 2015) 63; J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 124–25, citing AM Whitesell and ES Romero, ‘Multiparty and Multicontract Arbitration: Recent ICC Experience’, Complex Arbitrations—ICC Court Bulletin Special Supplement 16 (2003) 15.

26  H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International, 2015) 63; J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 125, citing AM Whitesell and ES Romero, ‘Multiparty and Multicontract Arbitration: Recent ICC Experience’, Complex Arbitrations—ICC Court Bulletin Special Supplement 16 (2003) 15.

27  See discussion at Chapters 13–15.

28  M Hartz, ‘ICDR Revised Rules Update’, 6 Debevoise & Plimpton’s Arbitration Quarterly (2015), available at <https://www.debevoise.com/~/media/files/insights/publications/2015/01/arbitration_quarterly_january2015.pdf>. See also J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 122.

29  See GB Born, International Commercial Arbitration (2nd edn, Kluwer Law International, The Hague, 2014) 2566–68.

31  J Grierson and A van Hooft, Arbitrating under the 2012 ICC Rules (Kluwer Law International, The Hague, 2012) 123; GB Born, International Commercial Arbitration (2nd edn, Kluwer Law International, The Hague, 2014) 2598.

32  See para 8.36.

33  Art 20(1).

34  Art 20(2).

35  GB Born, International Commercial Arbitration (2nd edn, Kluwer Law International, The Hague, 2014) 2568, 2608–12. See also Sociétés BKMI et Siemens v Société Dutco (French Cour de cassation civ 1e, 7 January 1992) 10 ASA Bull (1992) 295.

36  GB Born, International Commercial Arbitration (2nd edn, Kluwer Law International, The Hague, 2014) 2568, 2608–12. See also Sociétés BKMI et Siemens v Société Dutco (French Cour de cassation civ 1e, 7 January 1992) 10 ASA Bull (1992) 295.

37  T Tyler and J Espersen, ‘Lexis PSL Arbitration—ICDR Rules (2014)—Multi-Party Arbitration, Joinder and Consolidation’, available at <http://www.lexisnexis.com>.

38  Art 19(2).

39  See H Verbist et al, ICC Arbitration in Practice (2nd edn, Kluwer Law International 2015) 61 (‘Therefore, the arbitral tribunal will not be able to decide anymore as to whether or not the consolidation decided by the Court was appropriate. The arbitral tribunal will not be able to review or to alter the Court’s decision to consolidate. However, the arbitral tribunal will still be able to decide on a plea for lack of jurisdiction in accordance with the principle “competence competence”.’)