Vancouver International Arbitration Center’s (“VanIAC”) new International Commercial Arbitration Rules of Procedure (the “New Rules”) came into effect on July 1, 2022. In this post, we summarize what you need to know about the New Rules.
The New Rules are a significant update to the previous version of the international arbitration rules, which were last amended on January 1, 2000 (the “Old Rules”).
The New Rules reflect the developments in international arbitration in the last two decades and should help modernize the international arbitration regime in British Columbia.
As set out below, key changes include provisions related to the default number of arbitrators, the use of emergency arbitrators, early disposition on points of fact or law, ex parte preliminary orders in support of interim measures, expedited procedures, and virtual hearings.
Number of Arbitrators
Under section 11 (a) of the New Rules, a sole arbitrator will be appointed unless the parties agree otherwise.
Under section 5 of the Old Rules, the default number of arbitrators was three, unless otherwise agreed by the parties or decided by VanIAC.
This change is expected to reduce costs and make arbitration more accessible, as parties will incur the expense of one arbitrator rather than three by default.
Unlike the Old Rules, the New Rules allow for the appointment of an emergency arbitrator under section 29. Where a party applies for an interim measure or a preliminary order prior to the constitution of the tribunal, VanIAC will appoint an emergency arbitrator within two days.
An emergency arbitrator has the same duties and powers as an arbitral tribunal in deciding an application for an interim measure or preliminary order.
However, the emergency arbitrator who rules on the application for an interim measure cannot later be appointed as part of the arbitral tribunal.
Early disposition is a new feature introduced under section 21 of the New Rules.
At any stage of the proceedings, a party will be able to seek leave to bring an application for early disposition of one or more issues of fact or law. Once a leave application is brought, all parties will have an opportunity to address whether a specific issue is suitable for early disposition and the potential summary procedure for the application.
In determining whether to grant leave for an application for early disposition, the arbitral tribunal will consider whether it will further the fair and expeditious conduct of the proceedings.
Without Notice Preliminary Orders in Support of Interim Measures
The provisions regarding interim measures remain largely unchanged in the New Rules. However, one new feature is the availability of ex parte, or without notice, preliminary orders under section 27.
Under this new provision, the arbitral tribunal may grant an
ex parte preliminary order directing a party not to frustrate the purpose of a requested interim measure. A preliminary order will be granted only in exceptional circumstances, where the arbitral tribunal considers that prior disclosure of a request for an interim measure to the party against whom it is directed risks frustrating the purpose of the interim measure.
A party seeking an ex parte The preliminary order must disclose all circumstances relevant to the tribunal’s determination whether to grant or maintain the order.
Immediately after the determination on such an application, the tribunal will notify all parties of the request for the interim measure, the request for the preliminary order, the preliminary order (if any), and all other communications between any party and the arbitral tribunal regarding the requested interim measure and preliminary order.
A party against whom the order is directed will have an opportunity to present their case at the earliest practicable time.
Importantly, a preliminary order under the New Rules is binding on the parties, but is not subject to enforcement by a court. The order expires 20 days after the date it was issued, subject to any modification by the tribunal.
Another significant update to the New Rules is the expedited procedures under Appendix A (the “Expedited Procedures”).
The Expedited Procedures apply if the parties agree, or if an estimate of the amount claimed is under CAD $ 500,000. They do not apply if the parties have agreed to a tribunal consisting of more than one arbitrator or if they have explicitly agreed to opt out of these procedures.
For arbitrations under the Expedited Procedures, a sole arbitrator will be appointed in the same manner as other arbitrators under the New Rules and procedures will be based on written material by default.
The timelines for submissions and awards under the Expedited Procedures are shortened. For example, a Notice of Counterclaim is to be delivered within 10 days of the commencement of the arbitration (21 days under the regular procedure), oral hearing (if any) must take place within 30 days of the delivery of all written material (no timeline under the regular procedure), and an award must be delivered within 45 days of the latter of the delivery of the last written material and the closure of the oral hearing (90 days under the regular procedure).
In the post-COVID world, many parties may continue to prefer virtual hearings. Provisions for virtual hearings are incorporated in the New Rules under section 25.
A virtual hearing may be held by agreement of the parties or upon direction by the arbitral tribunal. The arbitral tribunal may issue directions on the primary and backup video conferencing platforms. Any party may request that the arbitral tribunal test the videoconferencing platform prior to a virtual hearing, provided that the requesting party books necessary venues and coordinates the test.
The New Rules also provide an exhaustive list of persons entitled to access a virtual hearing: parties, their counsel, witnesses, the arbitral tribunal and any tribunal secretary, and third party service providers such as interpreters.
As set out above, the New Rules are expected to make international arbitration procedure more modern, practical and efficient. Together with the recently updated domestic arbitration rules, the New Rules should help bring arbitration in British Columbia in line with international best practices.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.