Between December 2016 and March 2017, several international arbitration institutes, based in both Asia and Europe, released their new Arbitration Rules. Some international arbitration institutes have expanded the scope of their administration on investment disputes in the new arbitration rules, such as the latest Shenzhen Court of International Arbitration (SCIA) rules which came into force on 1 December, 2016; the first edition of the Singapore International Arbitration Center (SIAC) Investment Arbitration Rules came into force on 1 January, 2017; meanwhile the new Stockholm Chamber of Commerce (SCC) Rules also entered into force. Recently, the International Chamber of Commerce (ICC) also launched its new international commercial arbitration rules which came into force on 1 March, 2017. It seems that the arbitral institutes may wish to share a pierce of the cake with the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID), but there are also some challenges that the new rules may face.
What is new?
SCIA Rules The new rules allow SCIA to administer investor-state arbitration under the UNCITRAL Rules. Article 2.2 states that, the SCIA accepts arbitration cases related to investment disputes between states and nationals of other states. Article 3.4 states that, where the parties agree that dispute referred to under Article 2 of the Rules be governed by the UNCITRAL Rules, the SCIA shall administrate the case in accordance with the UNCITRAL Arbitration Rules and the SCIA Guidelines for the Administration of Arbitration Under UNCITRAL Arbitration Rules. The SCIA has become the first arbitration institution on mainland China to administer investor-state arbitration and this is also the first time the SCIA has revised its rules since its launch in 2012, in the wake of the so-called "CIETAC split”.
SIAC Rules Compared to the SCIA’s administration under the UNCITRAL Rules, SIAC has become the first commercial arbitration institution to release a separate set of rules customised to international investment arbitration. The SIAC Investment Arbitration Rules highlight different perspectives of investment arbitration including emergency arbitration, third-party funding proceedings, submissions by non-parties, confidentiality and transparency.
SCC rules SCC is the second largest arbitration institute in the world for the administration of investment disputes, and the role of SCC in investment disputes includes acting as appointing authority under the UNCITRAL Arbitration. The new rules concern the interests of actors who are not parties to the arbitration, but who can bring an important perspective to the decision-making process of the tribunal. Therefore SCC has introduced Appendix III Investment Treaty Disputes which consists of 4 new provisions that supplement the Arbitration Rules and that apply to cases based on a treaty providing for arbitration of disputes between an investor and a state.
ICC Rules Being a leading dispute resolution provider, ICC plays an important role in international commercial arbitration. The 2017 Rules of ICC provide an introduction on expedited procedure and provide greater transparency to the arbitration process. Unlike the other rules above, the scope of the new ICC Rules does not extend to investment arbitration.
We see that several international arbitration institutes have expanded the scope of their administration on investment disputes in their new arbitration rules. Many challenges remain that the new rules may be confronted with which are discussed below.
Domestic law perspective Compared to SIAC, the SCIA rules state that it may administer investor-state arbitration under UNCITRAL Rules. As the first arbitration institute in mainland China to have included investor-state rules, SCIA may try to make a reasonable and proper approach. Under the 1994 Arbitration Law, Article 2 states that Contractual disputes and other disputes over rights and interests in property between citizens, legal persons and other organizations that are equal subjects may be arbitration, while Article 3 states that marital, adoption, guardianship, support and succession and administration disputes may not be arbitrated. It could be said that investor-state disputes do not fit into either article. Article 72 further clarifies, foreign-related arbitration rules may be formulated by the China Chamber of International Commerce in accordance with this Law and the relevant provisions of the Civil Procedure Law. The new SCIA rules do not violate the 1994 Arbitration Law, while the 1994 Arbitration law does not clearly recognize the investor-state clause of the SCIA rules. In the interest of consistence between the domestic law and arbitration rules a further analysis is needed.
Enforcement ICSID is the largest institute to administer investor-state arbitration cases and the ICSID Convention which was signed and ratified by most countries offers the parties fully structured arbitration procedures, including enforcement. However, the SCIA and SIAC rules ,for example, lack a practical mechanism to enforce awards and may also take some time to persuade the parties to apply these new investment rules.
Share of the Cake?
We may wonder why many arbitration institutes have started to modify their rules. Do these institutions wish to share a piece of the cake with ICSID and accept investor-state arbitration cases? Are they indirectly raising their influence by modifying the rules? What will attract a claimant to file a request-, less cost or a more effective process? SCC has modified its rules to be consistent with current developments and both SCIA and SIAC have taken their ‘first’ steps. How the SCC administers investment cases may provide some guidance to SCIA and SIAC. And more interestingly, ICSID has issued an invitation to submit suggestions for amendments to the rules and the secretariat has invited all those interested in the ICSID process to provide suggestions regarding potential amendments to the ICSID rules. Although ICC is still remaining silent on investor-state disputes, it is clear that many more arbitration institutions will start to want a share of the investor-state arbitration cake.
The author wishes to thank Ms. Weiwei Wu, CIETAC case manager for her review.