On May 4, 2022, the Vancouver International Arbitration Centre (VanIAC) announced the adoption of its new International Commercial Arbitration Rules (Rules) which were last amended on January 1, 2000. The Rules are set to become effective July 1, 2022.
Progressive changes
The new Rules adopt several measures that we have seen in recent updates to other international arbitration rules that aim to increase efficiency and optionality in proceedings. These include the following substantial changes that bring the rules to the forefront of offering parties flexibility in their process.
- An early disposition procedure providing an express option for early summary determination of one or more issues of fact or law (Rule 21). This does not exist as of right; a party to an arbitration seeking early disposition (at any stage in the proceedings) must apply to the tribunal for leave to bring an application for early disposition. As a part of this gatekeeping feature, the parties have an opportunity to present positions on both the suitability of the matter for early disposition and the procedure that ought to apply to that application for the tribunal to consider.
- The ability for a party to apply for an ex parte preliminary order simultaneously with an application for an interim measure (Rule 27). If seeking this relief, the applying party must set out its reasons for why “prior disclosure of the request for the interim measure to the party against whom it is directed risks frustrating the purpose of the interim measure.” There are also strict disclosure requirements on the applying party and the Rules recognize that such relief may be prohibited by law or prohibited by the parties by agreement.
- An emergency arbitrator procedure to hear applications for interim measures or preliminary orders before the arbitral tribunal is constituted (Rule 29).
- A new international expedited procedure (Appendix “A”) that applies if no claim or counterclaim exceeds CA$500,000, or the parties otherwise agree. The expedited procedure does not apply if the parties have agreed to more than one arbitrator hearing their dispute, and parties may nonetheless opt-out of any expedited procedures. This structure sets several thresholds for when there could be an expedited procedure, making it prudent for those wanting to incorporate the Rules in their arbitration agreements to fully consider how those agreements are drafted, and what disputes may result in light of the thresholds. There may also be rare situations where it is unclear at the outset of a dispute whether the expedited procedures apply (for example, where the parties have not expressly opted-out, have a dispute under the monetary threshold, but then after the dispute arises agree to a sole arbitrator altering what was previously in the arbitration agreement).
There are several additional smaller updates in the Rules which are worth noting, including:
- A sole arbitrator is the new default number of arbitrators unless the parties agree otherwise (Rule 11(a)).
- In line with international trends, a party is required to advise the other parties, the tribunal and VanIAC if a funding agreement exists in relation to a claim and of the identify of the third-party funder regardless of whether that agreement was made before or after commencement of the arbitration (Rule 6).
- A tribunal can direct matters to proceed by way of a virtual hearing (Rule 23(a)).
- When VanIAC is to appoint an arbitrator, the Rules set out a list method for VanIAC to follow but this now starts with provision of at least five names instead of at least three (Rules 11(e) and (f)).
Key takeaways
These changes to the Rules will align VanIAC international arbitration procedure with certain aspects of typical Canadian court procedure with respect to potential injunctive, or ex parte interim interim relief, and with developments in arbitration procedure generally, such as the express ability to seek early disposition. Unlike VanIAC’s new domestic arbitration rules, the new international Rules refrain from implementing an appeal process. Consistent with the current iteration, there is also no addition of any provisions that expressly refer to either joinder or consolidation.
While adding to the range of options available to parties looking for sophisticated international arbitration rules, the developments in the new Rules underscore the need for users to carefully consider which rules they want to adopt. The nuances between rules, and even within rules with respect to the ability to opt-in or out of certain provisions, provide parties with increased choice and an ability to uniquely tailor an arbitration procedure to suit their needs – but doing so requires careful advance consideration.
Please reach out to the authors, Rachel Howie and Alim Khamis, or any member of Dentons Canada’s Arbitration group, if you have any questions.
