The Plenary of the Madrid International Arbitration Centre (“CIAM”) has approved new Rules (in Spanish), which will enter into force on 1 January 2024, with the main objective of streamlining and expediting the procedure to adapt to the needs of international arbitration.
Please find below the substantial changes that deserve special mention:
Streamline the arbitration proceeding
The new Rules shorten deadlines and streamline the procedure:
- The requirement for terms of reference, as well as set deadlines for the statement of claim and the statement of defence have been removed.
- The time limit for submitting the request for correction, clarification, rectification and supplement of the award is reduced to 15 days, and the time limit for issuing the decision resolving these matters is reduced to 30 days (art. 44.1-3).
New hyper-abbreviated procedure
The new hyper-abbreviated procedure has the following characteristics:
- It requires the express agreement of the parties (art. 54.2), unlike the abbreviated procedure, which is determined by the amount.
- The designation or appointment of the arbitrator and the written phase are conducted simultaneously.
- The time limit for submitting the statement of claim starts from the date of the CIAM’s decision agreeing to the hyper-abbreviated procedure (art. 54.7). From then on, the time limits for the statement of defence, counterclaim and defence to the counterclaim start to run (arts. 54.8-10).
- The procedure is based on documents only (art. 54.15).
- The time limit for rendering an award is three months from the statement of claim (art. 54.19). Therefore, the award is expected to be rendered a little over four months after the request for arbitration.
Optional challenge of the award
The new Annex 4 establishes an optional procedure for challenging the award that amends the previous one in Article 56:
- The challenge procedure is voluntary and requires the express written agreement of all parties, before the appointment of any arbitrator (section B.1).
- The challenge may be based only on a manifest violation of the substantive rules applicable to the merits of the dispute; or on a manifest error in the assessment of the facts (section C.7).
- The award, following CIAM’s scrutiny, shall be issued as a draft (section D.8). If no party contests it, the award becomes final and is signed and dated (section D.9).
- The challenge shall always be made before a three-member tribunal, appointed in accordance with CIAMS’ direct appointment procedure (section E.16)
- In general, only evidence submitted at the first arbitration shall be admissible. The appeal tribunal may summon the parties to a hearing, after which, if any, it shall close the proceedings. The time limit for the issuance of the award is of 45 days, from the closing of the proceedings (section E.19).
- If the appeal is upheld by the appeal tribunal, it shall make a new award (section D.10). In the case of a partial challenge, the tribunal shall maintain the parts of the draft award not annulled (section D.11). If the tribunal rejects the challenge, the draft award shall be issued, signed and dated, as the final award (section D.9).
Other substantial changes
In addition to changes to the wording, the Rules introduce amendments to the provisions on multiple parties, multiple contracts, joinder of additional parties, consolidation of proceedings and succession:
It allows additional parties to join provided that they are prima facie part of the arbitration agreement (art. 19.1).
Statement of claims may be filed arising out of or relating to more than one contract, without filing separate requests for arbitration (art. 20).
Establishes additional criteria for the acceptance of joinder of proceedings (art. 21).
Introduces rules on procedural succession due to extinction or death of a party (art. 22).
In the interests of transparency, the new Rules make it easier for the tribunal to request information on the parties’ funding (art. 26); and authorize the publication of the award, after consultation with the parties, following anonymization of the contents (art. 50.4).
Among other, the Emergency Arbitrator is allowed to issue his or her decision in the form of an award, in addition to as a procedural order (art. 61.1); and article 68, which regulated corporate arbitration as a specific procedure, has been eliminated.
Annex 1 introduces measures to make the procedures for the nomination, confirmation and appointment of arbitrators more flexible and transparent (e.g., CIAM may conduct a conflict check of candidates upon acceptance of the nomination by the parties (Art. 1.5)).
Finally, Annex 2 on arbitration costs is amended as follows:
- The distinction of arbitrators’ fees based on the type of proceeding is removed, as well as the distinction between the minimum and maximum arbitrators’ fees, establishing a single schedule of fees.
- CIAM may increase or reduce the arbitrators’ fees by up to 30%, in exceptional circumstances, taking into account the complexity of the case, the tribunal’s performance in issuing the award and its efficiency or any delays it may have incurred.
CIAM was founded with the ambition of becoming the institution of reference at the international level. With measures such as the new hyper-abbreviated procedure, CIAM reaffirms this intention. While an ordinary procedure can last one year and the abbreviated procedure nine months, awards in arbitrations following the hyper-abbreviated procedure are expected to be issued within a little more than four months from the request for arbitration. This reform seeks to attract highly conflictive sectors, such as the maritime sector, and is an ideal way to resolve non-complex disputes or those requiring an immediate decision, such as claims for money. This and other new features, such as the procedure for challenging the award, enhance Madrid’s position as an attractive seat at the international level.
You will find the new Rules and Annexes here (in Spanish).
Authored by Gonzalo Ardila, Silvia Martinez, and Aida Rodriguez.