In ICC arbitration, the ToR is the key document in the identification of the claims to be addressed by the tribunal. The ToR follows the submission of the request for arbitration by the claimant; the submission of the answer to the request by the respondent; and the appointment of the Tribunal. According to Article 23(1)(c) of the ICC Rules, the ToR must include “a summary of the parties’ respective claims and of the relief sought by each party”.
Article 23(4) of the ICC rules of arbitration states that “[a]fter the Terms of Reference have been signed […], no party shall make new claims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the arbitral tribunal, which shall consider the nature of such new claims, the stage of the arbitration and other relevant circumstances”. As is made clear by this provision, a party presenting ‘new claims’ after the signature of the ToR faces a clear risk: that the tribunal does not authorize these new claims to be heard in the arbitration, leaving the party with the uncomfortable and expensive prospect of having to start another arbitration.
‘New claims’ under ICC rules
ICC tribunals have rejected ‘new claims’ after the signature of the ToR in the following scenarios:
- where the new claims were based on entirely new facts, or arose out of a separate contract;
- where the new claims were introduced at a very late stage of the proceedings, and would have caused significant disruption to the arbitral process in particular when providing the opposing party with sufficient time to respond would have led to unreasonable delays and additional costs.
In contrast, a mere change in argument, which does not vastly impact the relief requested, will generally not be considered to amount to a new claim. Moreover, the ‘new claims’ provision does not bar a party from seeking interim or conservatory relief in accordance with Article 28 of the ICC rules.
How to avoid the spectre of new claims
When drawing up a request for arbitration, parties should take the time to review their relationship with the opposing party as a whole, to ensure that all potential claims have been identified and assessed. It is not necessary that every and all claims be listed in the request for arbitration, however parties should ensure that they have a full understanding of their position in time for the signature of the ToR.
Careful case assessment at the earliest stage is vital. A case assessment should involve the ‘first responders’ on the scene when a dispute arises, i.e. the persons who will give witness testimony in the arbitration. This is to ensure that a party gets its case theory right as early as possible. Unfortunately, there are situations where a full case assessment is not possible at the early stages of a dispute – for instance when starting an arbitration in a hurry is necessary due to limitation. In this case, careful drafting should be used in the ToR and the subsequent procedural order to give as much leeway as possible for the introduction of new claims.
For queries related to France, contact Florian Quintard and Anne de Mazières of Pinsent Masons.