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SCC New Arbitration Rules - Main Changes

Image credit: Riddarholmen from Stockholm City Hall tower by Benoît Derrier [CC BY-SA 2.0], via Wikipedia Commons.

Author: Jakob Ragnwaldh, Partner, Mannheimer Swartling

3rd January 2017

The Arbitration Rules and the Expedited Rules of the Arbitration Institute of the Stockholm Chamber of Commerce (SCC) have recently undergone a number of changes. Some of the key changes to the Arbitration Rules are presented below.

The SCC has introduced a unique and innovative summary procedure in Article 39, providing for the determination of factual or legal issues without necessarily undertaking every procedural step that may otherwise be adopted for the arbitration. Summary procedure aims at saving time and costs and may, for example, be used when a party has made an allegation that is manifestly unsustainable or when a claim is manifestly unfounded as a matter of law. The summary procedure is primarily a case management tool available at any time during the arbitration. This makes summary procedure unique in comparison to similar provisions of other institutions which allow for early dismissal of claims. The party requesting summary procedure shall explain why a particular issue should be heard by way of summary procedure and demonstrate that such a procedure would be efficient and appropriate under the circumstances.

Article 13 introduces a possibility for a party to request that a third party be joined to an existing arbitration. In the event that the third party objects to the request, the Board of the SCC will decide whether the third party should be joined to the arbitration. The final decision as to whether the Arbitral Tribunal has jurisdiction over a third party joined to the arbitration is taken by the Arbitral Tribunal.

Another new provision is Article 14, which allows a party to bring claims under more than one arbitration agreement in a single arbitration (without having to commence separate arbitrations on the basis of each arbitration agreement and without having to pay separate registration fees). If the other party objects, the claims may be determined in a single arbitration upon the decision of the Board.

The possibilities to consolidate arbitrations under the SCC Rules have been broadened. Under the new Article 15, a party may request that a newly commenced arbitration be consolidated into a pending arbitration under the SCC Rules, provided that the relevant criteria are met. Consolidation is possible not only under the same arbitration agreement but also under more than one arbitration agreement, provided that the relief sought arises out of the same transaction or series of transactions and the Board considers the arbitration agreements to be compatible.

The default provision on the number of arbitrators has changed, abandoning the presumption in favour of a three-member tribunal and opting for a more flexible approach. The new Article 16 provides that if the parties fail to agree on the number of arbitrators, the Board shall decide on the number of arbitrators, which may be one or three depending on the complexity of the case, the amount in dispute, and other relevant circumstances.

The SCC has administered over 90 investment treaty arbitrations. Under a new Appendix III on investment treaty disputes, third parties may request, or be invited by the Arbitral Tribunal, to make a written submission to the Arbitral Tribunal. For a written submission to be allowed, the Arbitral Tribunal will consider the nature and significance of the interest of the third party in the arbitration and whether the submission will assist the Arbitral Tribunal in determining an issue by bringing a perspective or knowledge distinct from that of the disputing parties. The parties shall be given an opportunity to comment on any submission made and they may request further details regarding the written submission or request the third party to attend a hearing to elaborate or be examined on its submission. The Arbitral Tribunal shall ensure that the submission does not disrupt the arbitration and may require that the third party provides security for the costs expected to be incurred by the disputing parties as a result of the submission. Appendix III also provides that when there is no agreement on the number of arbitrators, the Arbitral Tribunal shall be composed of three arbitrators, unless the Board decides that a sole arbitrator shall decide the dispute, having regard to the complexity of the case, the amount in dispute and other relevant circumstances.