ICC Court releases practices on fees and administrative expenses
The International Court of Arbitration of the International Chamber of Commerce (ICC) has published its internal practices regarding the calculation of fees and administrative expenses in new ICC cases.
Set out in a revision to the ICC note to parties and arbitral tribunals, the measures provide greater transparency to parties and tribunals on the way in which fees are to be fixed by the ICC Court. A new ICC form for statements of time and travel has also been published for arbitrators to provide periodic reports on the time spent and activities performed in all new cases to assist the ICC Court in fixing fees. Finally, the Court will retain more flexibility, in absence of an agreement between the co-arbitrators, to allocate the fees within the arbitral tribunal.
These measures aim at providing our users with more transparency as to how fees are fixed by the Court. At the same time, we are encouraging greater rigour on the part of arbitrators in their communication of time spent.
Commenting on these practices, President of the ICC Court Alexis Mourre said: “These measures aim at providing our users with more transparency as to how fees are fixed by the Court. At the same time, we are encouraging greater rigour on the part of arbitrators in their communication of time spent.”
Although our system is based on an ad valorem schedule, time spent is often taken into account by the Court, amongst other factors, to assess whether the fees should be fixed on top or below the average. It is therefore necessary that arbitrators be transparent in their communications of time spent.
Determination of fees
The new ICC note to parties and tribunals first provides greater transparency to parties and arbitrators by setting out the existing practices of the Secretariat and the Court in determining the fees of the Arbitral tribunal, in particular when the case is withdrawn in the course of the proceedings.
Provision of detailed reports
For all new cases, the Secretariat of the ICC Court will also require arbitrators to use the new form in order to provide information on tasks performed in ICC cases.
Arbitrators’ fees in ICC Arbitrations will continue to be calculated on an ad-valorem basis, but since time is one the parameters that is taken into account in fixing fees, the Court is taking steps to ensure it receives reliable accounts of time spent by arbitrators on ICC cases.
To this end the Secretariat of the ICC Court will continue requesting arbitrators periodic reports on the time spent on the case, which will now be itemized and include a description of tasks performed and any other information related to those tasks that the arbitrators may deem relevant.
In so doing, arbitrators are encouraged to use the ICC form for statements of time and travel, available on the ICC website, but if they use time sheets as part of their normal professional activities, they may provide the Secretariat with such time sheets instead.
Allocation of fees
The new ICC note to parties and tribunals finally encourages arbitrators to agree on the allocation of fees between them, but leaves more discretion to the ICC Court to decide on the allocation in absence of an agreement. The current Court policy is, in absence of any such agreement, to allocate 40% of the fees to the president and 30% of the fees to each co-arbitrator.
According to current practice, the Court would exceptionally allocate the fees on a 50/25/25 basis depending on the circumstances of the case. This, according to Mr Mourre, “unnecessarily restricted the discretion of the Court and at times resulted into an under-compensation of the president’s time”.
From now on, unless the Court is advised in writing that the arbitral tribunal has agreed to a different allocation, the Court will normally fix the arbitrators’ fees so that the president receives between 40% and 50% of the total fees and each co-arbitrator receives between 30% and 25% as the case may be.
That same allocation will apply to any advances on fees granted by the Court. As it is currently the case, the Court will in any event retain the discretion to decide upon a different allocation based on the circumstances of a particular case.