[Ashvi Jain is a fourth-year student at National Law University, Odisha]
Introduction
The concept of consolidation of arbitral proceedings has been introduced across various imminent Arbitration Institutional rules of Hong Kong International Arbitration Centre (“HKIAC”), Singapore International Arbitration Centre (“SIAC”), International Centre for Settlement of Investment Disputes (“ICSID”) and International Chamber of Commerce (“ICC Rules”). Consolidation seeks to merge multiple arbitrations into a single proceeding, resulting in one unified award. This approach allows the cases to be handled by one tribunal, which uses a single set of arbitrators and administrative fees. This method not only reduces costs for the parties involved but also saves the Tribunal's time in resolving interconnected disputes. Additionally, it minimises the risk of conflicting awards that could occur if related issues were addressed in separate proceedings.
What does ICC Rules provide?
Article 10 of the ICC Rules provides for three situations fulfilling any one of which can lead to consolidation of the multiple arbitral proceedings. It is upon the request of either of the parties that the ICC court can consolidate the proceedings. This provision throws light on the basic principle of party autonomy since the ICC Court suo-moto cannot make such a decision to consolidate to existing disputes. Only if either of the parties so desire can this step be undertaken. The principle of party autonomy is the grundnorm of International Commercial Arbitration and the reason why this concept is also introduced will be described in great depth in the future course of this blog.
Point of Contention with this Rule?
The main point of contention that needs attention is whether the ICC Court enjoys the sole power to consolidate or can the Tribunal also take such a decision if the parties agree to transfer such a power. While the rules prima facie supports the fact that ICC Court is the sole body that enjoys such a power, but through this blog we aim to substantiate that the contrary is also possible.
Analysis
In a hypothetical situation, if the parties in the Dispute Resolution clause of their agreement add something on the lines of “If the Parties initiate multiple arbitration proceedings in relation to several contracts concluded under this framework agreement, the subject matters of which are related by common questions of law or fact and which could result in conflicting awards or obligations, the Arbitral Tribunal of the first arbitration proceedings has the power to consolidate all such proceedings into a single arbitral proceeding”. Now the question of whether such a power can be transferred is something to ponder upon. This article aims to establish the arguments from both sides.
Not transferable
Such a power cannot be transferred and this can be substantiated through various reasoning. Firstly, Article 19 sets out a clear hierarchy for the rules governing Tribunal proceedings. At the top of this hierarchy are the ICC Rules, which takes precedence. If the ICC Rules do not address a particular issue, only then can the Tribunal refer to the parties' agreement. This means the ICC Rules hold the highest authority. Specifically, Article 10 of the ICC Rules is quite explicit: the Court has the sole authority to decide on consolidation. There’s no ambiguity here; the power to consolidate cases is firmly in the hands of the Court. Thus, such a transfer of power through parties agreement is untenable. Secondly, Article 1(2) of the ICC Rules makes it clear that the ICC Court is the "only body authorized to administer arbitrations under the Rules." This means the ICC Court is exclusively responsible for all administrative duties. The Rules are designed to clearly separate administrative and judicial functions, ensuring that responsibilities are systematically allocated. The decision on consolidation, as outlined in Article 10 of the ICC Rules, is considered an administrative task. Therefore, the Court’s decision on this matter is final, as supported by Rampall, Feehily, and Gould's ICC Note. This reinforces that the question of consolidation is purely an administrative function, not a jurisdictional one.
Transferable
Looking at other side of the coin, such transfer of power can be allowed based on the nature of Article 10 of the ICC Rules. A balance must be struck between the parties' autonomy in determining the arbitration procedure and the requirements of the institutional rules they adopt. While parties have broad freedom to define the procedure, they must comply with the mandatory provisions of the lex arbitri and institutional rules. The ICC Court may refuse to administer an arbitration with party-agreed modifications to the Rules only when a fundamental characteristic of ICC arbitration is omitted. Mandatory provisions are limited and include the Terms of Reference and scrutiny of awards by the ICC Court. Although the ICC Court does not have exclusive authority over consolidation and the rules do not explicitly grant the Tribunal jurisdiction, the ICC Court will uphold the Tribunal's power if explicitly delegated by the parties. This was exemplified in a specific ICC case where an arbitration clause allowed the first established tribunal to determine consolidation, which was upheld without objections from the ICC Secretariat. This indicates that Article 10 is not a mandatory provision and can be tailored according to the parties’ wishes.
Further, Article 19 of the ICC Rules stipulates that in the absence of specific provisions within the Rules, reliance is placed on any agreements between the parties. Article 10 does not explicitly address the Tribunal's power to consolidate, suggesting no restriction on its jurisdiction. Hence, the Tribunal can derive its authority from the arbitration clause, as supported by the PDV Sweeny, Inc. v. ConocoPhillips Co. case. The ICC Rules provide a broad framework, allowing the procedure to be largely shaped by the parties and the Tribunal. This discretion aligns with Article 19, affirming the Tribunal's authority to consolidate proceedings.
Further, the principle of Competence-Competence plays a pivotal role in International Commercial Arbitration. Under the said principle, a Tribunal enjoys the authority to decide on its own jurisdiction or take a decision to consolidate, even if provisions are silent on the same. Courts generally restrict themselves from intervening in Tribunal’s decisions, especially on jurisdictional matters as was seen in the cases of United Mexican States v. Cargill as well as Consolidated v. Ambatovy Superior. This principle has been specifically provided under Arts. 6(3) & 6(5) ICC Rules. Moreover, other institutional rules like Rule 8.4 of SIAC 2016; Article 23(1) of UNCITRAL Rules; Article 19.1 of HKIAC Rules 2018 etc. also affirm the above principle.
Conclusion
In conclusion, while the ICC Rules, particularly Article 10, explicitly reserve the power of consolidation to the ICC Court, there remains an ongoing debate about the transferability of this authority to the Tribunal. The author believes that this transferability shall be allowed which is clearly supported by precedents and analysis of other factors. On one hand, the strict interpretation of the rules maintains that consolidation is an administrative function, squarely within the Court's domain, and non-transferable due to the hierarchy established by Article 19 and the exclusive administrative role outlined in Article 1(2). On the other hand, principles of party autonomy suggests that the ICC Rules' flexibility allows parties to delegate consolidation powers to the Tribunal, provided it aligns with their arbitration agreement and does not contravene mandatory ICC provisions. Ultimately, the resolution of this debate hinges on the balance between institutional integrity and party autonomy, suggesting a potential evolution in the interpretation and application of ICC consolidation rules as arbitration practices continue to develop.
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