On 1 April 2021, the latest iteration of the Australian Centre of International Commercial Arbitration (ACICA) Arbitration Rules and Expedited Arbitration Rules (the 2021 Rules) came into effect.

We outline the key changes to the Rules and what this means for the construction industry.

Electronic delivery of documents and virtual hearings

The 2021 Rules expressly permit:

• a Notice of Arbitration and Answer to Notice of Arbitration to be filed by way of email or other electronic means, including any online filing system operated by ACICA (Articles 6.1 and 7.1);
• any other notification, communication, or proposal to be transmitted by email or any other form of electronic communication (Article 4);
• the holding of virtual conferences and hearings, or in a combined form (Articles 10, 24.8, 25, 27.2, 35.5 and 36.5);
• the Award being signed and transmitted electronically (Articles 42.4 and 42.5).

These changes recognise the greater use of technology in the resolution of disputes. The COVID-19 pandemic has accelerated the move to virtual conferences and hearings, which are now common practice in all forms of litigation. The changes to the Rules give greater flexibility for the Arbitral Tribunal (the Tribunal) to determine the form of hearing to be conducted.

Notably, specifying the seat of arbitration does not secure its location. If a hearing is held virtually, it will be deemed to be held at the seat (Article 27.2). As such, if a party does not wish to participate in a virtual hearing, that should be specified in the arbitration agreement

Consolidation and multi-party arbitrations

When can the Tribunal consolidate arbitrations?

Article 16.1 (Consolidation of Arbitrations) provides that upon request from a party, ACICA may consolidate two or more arbitrations into a single arbitration. They may do this if:

(a) the parties have agreed to the consolidation;

(b) all the claims in the arbitration are made under the same arbitration agreement; or

(c) the claims in the arbitrations are made under more than one arbitration agreement, a common question of law or fact arises in both or all of the arbitrations, the rights to relief claimed are in respect of, or arise out of, the same transaction or series of transactions, and ACICA finds the arbitration agreements to be compatible.

In the 2016 iteration of the Rules, ACICA was only permitted to consolidated two or more arbitrations under (c), where the arbitrations were between the same parties. Accordingly, ACICA was not empowered to compel multi-party arbitrations in the absence of agreement on consolidation. This limitation has been removed in the 2021 Rules.

From a drafting perspective, parties seeking to rely on the Rules in an arbitration agreement should give consideration to whether consolidation of multi-party arbitrations, arising out of the same or series of transactions, is desirable.

Comparison with the uniform Commercial Arbitration Acts

Article 16.1 of the 2021 Rules is broadly similar to section 27C (Consolidation of Arbitral Proceedings) in the uniform Commercial Arbitration Acts. The key differences are that the 2021 Rules:

• expressly contemplate that proceedings may be consolidated, where all claims in the arbitration are made under the same arbitration agreement; and
• require there to be both a common question of law or fact arising in the arbitration and the rights to relief claimed arising out of the same transaction, or series of transactions. These are separate limbs under the uniform Commercial Arbitration Acts.

A single Notice of Arbitration

Where claims arise out of more than one contract, and the criteria in Article 16.1 are satisfied, a party may file a single Notice of Arbitration (Article 18.1). The single Notice of Arbitration must include a request to consolidate all such arbitrations, pursuant to Article 16.1. In the event that ACICA rejects the application for consolidation, the claimant will be required to file separate Notices of Arbitration for each arbitration that has not been consolidated.

Other key changes

Independence and impartiality of arbitrators

• The 2021 Rules introduce a new process regarding the disclosure of an arbitrator's independence and impartiality (Article 20.3).
• A party may challenge the appointment of an arbitrator, if there are justifiable doubts as to the arbitrator's impartiality or independence. In this situation, ACICA will determine the outcome of any challenge (Articles 21 and 22).

Alternative dispute resolution

• The 2021 Rules expressly recognise other techniques to facilitate the settlement of the dispute. These include mediation and other forms of alternative dispute resolution (Articles 25.3 and 55.1).
• The Tribunal may suspend the arbitration to allow for a mediation, or other form of alternative dispute resolution, on such terms as the Tribunal considers appropriate (Article 55.2).

Early Dismissal Procedure

• The 2021 Rules introduce a new provision expressly empowering the Tribunal to make an award granting the early dismissal or termination of any claim, defence, or counterclaim. This likely recognises a power that Tribunals previously held (Article 25.7).

Costs

• The definition of 'costs of arbitration' has been expanded to include non-independent experts and third party funding costs (Article 48).
• The 2021 Rules have enhanced ACICA's oversight regarding the deposit of costs (Article 49), the determination of fees and expenses of the Tribunal, and ACICA's administration fee (Article 50).
• The 2021 Rules expressly provide that the Tribunal may make costs decisions at any time. The default position is that the unsuccessful party will bear the costs of the arbitration, subject to the Tribunal's discretion to apportion costs (Article 51).

Third-Party Funding Disclosures

• The 2021 Rules impose a continuing obligation on the parties to disclose third party funding, including changes to a third party funding agreement.

When do the 2021 Rules come into effect?

Unless otherwise agreed by the parties, the provisions contained in Article 16 and 17 (Multi-Contract Arbitrations) will only apply to the extent that those provisions were in force at the time of the conclusion of the arbitration agreement. Further, the provisions contained in Article 18 (Single Arbitration Under Multiple Contracts) only apply if the arbitration agreement was concluded after 1 April 2021.