The Cairo Regional Centre for International Commercial Arbitration (CRCICA) has announced its plans to implement the revised CRCICA Arbitration Rules (Rules), marking the first set of comprehensive amendments to the Rules since 2011. The Rules, available here, have been formally adopted by the CRCICA Board of Trustees and are due to take effect on 15 January 2024.
The Rules are based on the UNCITRAL Arbitration Rules and introduce a raft of changes aimed at enhancing efficiency and flexibility in the arbitral process. Notably, the Rules introduce mechanisms for the use of electronic means to exchange communications, remote hearings, early dismissal of claims and emergency arbitration, among other substantial changes. These changes bring the Rules in line with the approaches followed by other major arbitral institutions such as SIAC, LCIA, ICC, ICSID and HKIAC, cementing CRCICA’s international reputation as a leading arbitration centre in Africa, the Arab World and the MENA region.
In this post, we summarise the key changes introduced by the Rules and consider their potential practical impact.
AN EMPHASIS ON PROCEDURAL EFFICIENCY
The Rules lay a significant emphasis on the efficiency of the arbitral process and to that end, include a number of new provisions aimed at facilitating time and cost efficiencies. These include, among other things, provisions for the early dismissal of claims, expedited procedures, and emergency arbitration.
Early Dismissal of Claims (Article 52)
The Rules now expressly grant tribunals the power to dismiss claims that are “manifestly without legal merit” at early stage of proceedings, but only after “hearing all parties“. In this way, the Rules refer to the widely adopted threshold of “manifestly without legal merit” introduced by Article 41(5) of the ICSID Arbitration Rules and subsequently adopted in the SIAC Rules.
This inclusion reflects a broader trend of arbitral institutions, such as SIAC and HKIAC, which have adopted similar provisions allowing the early determination of unmeritorious claims and will be welcomed by commercial parties faced with arbitrary or unmeritorious “guerrilla” types of claims.
The inclusion of the possibility of early dismissal in the Rules will improve time and costs spent on arbitration proceedings, by narrowing the issues in dispute and rejecting unfounded claim at an early stage.
Expedited Procedure (Article 1.5)
A significant development brought about by the amendment to the Rules is the introduction of an expedited procedure which should allow for the cost-effective and efficient disposal of claims. Crucially, the expedited procedure does not apply automatically and is only available “where the parties so agree“. In this way, the Rules differ from the ICC Arbitration Rules 2021 and the ICDR International Arbitration Rules 2021, both of which apply automatically to claims that are below a particular monetary threshold.
Parties that choose the expedited procedure must follow a separate set of rules outlined in Annex 3 which sets out detailed guidance in relation to the scope of application of the rules, the parties’ ability to opt-out at “any time during the proceedings“, as well as the conduct of the parties and the tribunal during such an expedited procedure.
The default position under the expedited procedure is that the dispute will be heard by a “sole arbitrator“, appointed jointly by the parties, who must issue a final award “within 6 months from the date of the constitution of the arbitral tribunal“, unless otherwise agreed by the parties.
Emergency Arbitration (Annex 2)
Another significant addition to the Rules is the inclusion of Annex 2 setting out the Emergency Arbitrator rules, which will provide parties with additional avenues to safeguard their rights as part of the arbitration process. Article 1 allows parties to apply to the CRCICA for urgent interim measures “[p]rior to, concurrent with or following the filing of a notice of arbitration, but before the constitution of the arbitral tribunal”. While doing so, the party must provide a “description of the circumstances giving rise to the Urgent Application” as well as the “reasons why the applicant needs urgent measures that cannot await the constitution of an arbitral tribunal“.
Once a party has made its application, the CRCICA must appoint an emergency arbitrator “within as short a time as possible” and “normally within 2 days” of the acceptance of the urgent application. The emergency arbitrator must then issue a decision within 15 days and the emergency arbitrator’s decision shall have “the same effect as an interim measure granted pursuant to article 26 [of the Rules]”. Any decision issued by an emergency arbitrator shall cease to be binding on the parties if, amongst others:
- the emergency arbitrator or an arbitral tribunal so decides;
- an arbitral tribunal makes a final award;
- arbitration is not commenced within 10 days of the emergency decision; or
- the case is not referred to an arbitral tribunal within 90 days of the emergency decision.
Article 10 protects the rights of parties to apply to national courts for interim measures by specifying that the emergency arbitration provisions are “not intended to prevent a party from seeking urgent interim measures from a competent judicial authority“.
A SIGN OF THE TIMES
The Rules also introduce new provisions addressing various aspects of the arbitration process, such as the joinder of additional parties and the consolidation of multiple arbitrations, or arbitrations arising out of multiple contracts. The Rules also address third-party funding. To an extent, these new provisions are in line with developments that have taken place since 2011, and mirror the amendments made by several other arbitral institutions.
Third-Party Funding (Article 53)
Acknowledging the increased adoption of third-party funding in recent years by commercial parties, and increased regulation thereof, the Rules now include provisions on third-party funding for the first time.
In practice, Article 53 obliges the funded party to disclose the existence of the funding and the identity of the funder at the “commencement of” and “throughout” the arbitral proceedings. This development is in line with rules adopted by other comparable institutions such as the HKIAC and ICSID, both of which require the funded party to disclose the existence and identity of the funder. Funded commercial parties, and funders, should therefore be aware of these disclosure requirements ahead of the commencement of the arbitration proceedings.
Joinder, Consolidation and Multiple Contracts
Article 17.5 empowers the tribunal to allow one or more third persons to be joined in the arbitration as a party “provided such person is a party to the arbitration agreement” in circumstances where such a joinder would not cause prejudice to any of the parties, including the persons to be joined.
Along the same lines, Article 50 permits the consolidation of two or more separate proceedings into one single set of proceedings under certain circumstances, including where the CRCICA finds that the relevant arbitration agreements are compatible, and the disputes (i) arise out of the same legal relationship; or (ii) involve a principal contract and its ancillary contracts; or (iii) arise out of the same transaction or series of transactions.
The Rules also introduce a mechanism for the commencement of disputes arising out of multiple contracts by way of Article 51, which permits a party to “make claims arising out of or in connection with more than one contract in a single arbitration“.
Law governing the Arbitration Agreement (Article 36.4)
Article 36.4 clarifies that, subject to the parties’ agreement in writing to the contrary, the law applicable to the arbitration agreement shall be the law of the place of arbitration (i.e., the seat).
TECHNOLOGY AND THE ARBITRAL PROCESS
The Rules modernise arbitrations taking place under the CRCICA, bringing the Centre in line with other institutional rules.
In particular, the Rules emphasise the importance of technology in the context of arbitral proceedings. Articles 3.6 and 4.4 of the Rules authorise online filing of the notice of arbitration and the response to the notice of arbitration using the CRCICA official website. In addition, the Rules now permit parties to send notices and other communications via electronic means, for example, by email, a provision not contemplated in the 2011 version of the Rules. In the same spirit, Article 28 provides tribunals with the discretion, after consultation with the parties, to hold hearings “in person“, or “remotely by videoconference” or in a “hybrid form“.
Separately, the Rules have further clarified the arbitral process. Pursuant to Article 3.2 of the Rules, subject to the parties’ alternative agreement, “the arbitral proceedings shall be deemed to commence on the date on which the notice of arbitration is received by the Centre”. In comparison, in the 2011 version of the Rules, commencement of arbitral proceedings is triggered upon receipt of the notice of arbitration by the respondent.
Another development for parties and practitioners to note is that the Rules now require that the Notice of Arbitration, as well as any Response, include the proof of authority of any person representing the claimant or respondent. Given that the Rules do not define “proof of authority“, this inclusion may potentially lead to arguments about the validity of a Notice or Response and could also result in delays and difficulty in issuing a valid Notice or Response if, in practice, a Power of Attorney (or similar) is required to demonstrate proof of authority.
The Rules significantly build on and reflect many of the key developments in international practice since the Rules were first promulgated over a decade ago in 2011.
The introduction of provisions aimed at time and cost efficiency, such as the provisions related to expedited and emergency procedures, are a welcome addition to the Rules. However, given recent reports which indicate that tribunals are likely to apply rigorous standards to such applications for early determination, it remains to be seen whether such developments significantly contribute to efficiency and expediency in practice.
What is clear, however, is that the amended Rules represent a significant step forward for CRCICA and will provide welcome certainty to parties. While CRCICA has long established itself as a reliable arbitral institution, led by internationally recognized experts, the amendment of the Rules will provide for a more user-friendly and efficient process. The greater flexibility offered by the Rules throughout the lifecycle of an arbitration may also attract a greater number of users to the CRCICA, whether from Africa, the MENA region and further afield.
For further information, please contact Amal Bouchenaki, Partner, Craig Tevendale, Partner, Nick Oury, Partner, Laurence Franc-Menget, Partner, Jonathan Ripley-Evans, Partner, Lynn Moubarak, Associate, Cedric Saliba, Associate or your usual Herbert Smith Freehills contact.
The authors would like to thank Siddhant Ahuja for his assistance in drafting this post.