Following an intense drafting process of 18 months, the new DIS Arbitration Rules were published in the beginning of this year and will enter into force on 1 March 2018 (the “2018 Rules”). They will apply to all DIS arbitrations started after 1 March 2018.
The 2018 Rules replace the 1998 DIS Arbitration Rules (the “1998 Rules”). Twenty years after their introduction, it was time to adapt the Rules to the development of the practice and mechanisms of national and international arbitration. Although the material content of many provisions has been maintained, the 2018 Rules do provide a fundamentally new regulatory framework.
I. Drafting process
Around 300 national and international arbitration practitioners, experts, representatives from businesses and various other stakeholders were involved in drafting the 2018 Rules. They were organized in three Committees.
The Expert Committee consisted of German and international arbitration experts, including also the co-author of this article, Dr. Ulrich Theune. The Expert Committee had the task to suggest changes to the 1998 Rules and to critically evaluate and examine draft versions of the new rules. The Consolidation Committee was comprised of DIS officials, representatives from businesses and various other stakeholders which provided consolidated input from their fellows and constituents, but also provided feedback on each new round of drafts. The Drafting Committee consisted of several renowned German arbitration practitioners which inter alia included also one of the co-authors of this article, partner Dr. Richard Happ. Its purpose was to draft the individual provisions on the basis of the ideas, suggestions and critics of the other two committees, as well as own experience. These individual provisions where then incorporated into an initial overall draft and reworked and refined trough repeated and – at times controversial – discussions amongst the members of the Editorial Committee and with the other two committees involved in the reform process
The English version of the 2018 Rules is no literal translation of the German version, but was drafted from the scratch by an committee of English native speakers. They worked closely together with the Drafting Committee and drafts were exchanged numerous times in order to reach a coherent sets of rules. Nevertheless, German and English version of the Rules have the same meaning and have to be interpreted harmoniously.
II. Outline of major changes
1.Assigning more administrative powers to the DIS
Following the model of the ICC Rules of Arbitration and the SCC Arbitration Rules, the administrative role and function of the DIS have been significantly enhanced and clarified. Under the 1998 Rules, the DIS did not play a role in the arbitral proceedings from the time the arbitrators were appointed until the award was issued. Under the 2018 Rules, all submissions and enclosures must also be transmitted to the DIS. The fees for the arbitrators are paid to the DIS, which administers them and has the power to reduce them. The 2018 Rules further introduce a “light-touch scrutiny” approach. The DIS now has the right to review the draft award (Article 39.3) for formal errors. Such review will be non-binding, the content of the award is in the sole responsibility of the arbitral tribunal.
The 2018 Rules establish – besides the already existing Appointing Committee - a new Committee with administrative roles and powers: the Arbitration Council. The Arbitration Council has the competence to decide about requests to challenge an arbitrator (Article 15.4), instead of the arbitral tribunal, as it was the case under the 1998 Rules. This is likely to enhance transparency and legitimacy of such decisions, and to reduce the risk that unsuccessful parties will file challenges with the responsible courts. The Arbitration Council is also empowered, at the request of a party, to review the determination of the amount in dispute by the arbitral tribunal (Article 36.6). The Arbitration Council is further competent to decide on the number of arbitrators (Article 10.2), the termination of the mandate of an arbitrator (Article 16) and on matters regarding the arbitrators’ fees and expenses (Articles 34, 37).
2. Enhancing the efficiency of the proceedings
Efficient dispute settlement procedures are one of the hallmarks of civil law countries like Germany. In line with the international trend to make arbitrations more efficient, the 2018 Rules incorporate the best practice of German and international arbitration proceedings. While under the 1998 Rules the Answer to the Request was to filed only once the Tribunal was constituted, the 2018 Rules now require a Respondent to file the Answer within 45 days following its receipt of the Request (Article 7.2). In addition, the time limits for nominating arbitrators have been shortened (Article 12.2).
Other mechanisms have been kept, such as the duty of the Tribunal to further an amicable settlement of the parties (unless any of them objects), Article 26. The Tribunal under Article 27 is required to conduct the proceedings efficiently and to hold a case management conference with the parties within 21 days after its constitution (Article 27). In that conference, the tribunal is to discuss with the parties the use of certain mechanisms to enhance the efficiency of the proceedings, including having only one oral hearing and the tribunal giving guidance about its preliminary views (if all parties agree). The tribunal is also required to transmit the draft of the final award to the DIS within three months after the hearing or the last brief (see above).
3. Other significant changes
The 2018 Rules offer the possibility to switch from arbitration to any other form of dispute resolution mechanism even after the constitution of the arbitral tribunal by stating that the DIS Dispute Management Rules are an integral part of the 2018 Rules (Article 1.3). A party may at any time during the arbitration request the DIS to appoint a Dispute Manager to advise and assist the parties in selecting the dispute resolution mechanism best suited for resolving their dispute (Article 2.2). If such other mechanism leads to a result, it can be incorporated into an award on agreed terms (Article 41). By providing for the possibility of electronic submissions (Article 4.1), the 2018 Rules formally adapt what has been an informal practice of the Tribunals for years.
The 1998 Rules did not contain explicit rules on the consolidation of arbitrations or on multi-contract, multi-party arbitration or a joinder of additional parties. This has now been changed under the 2018 Rules which contain an explicit legal framework (Articles 8, 17 et seq.).
The 2018 Rules reflect the recent changes and developments in international arbitration, but keep their specific civil law character. The 2018 Rules measure up with the rules of other leading international arbitration institutions and represent a significant improvement on the 1998 Rules.
Since the 2018 Rules are the product of debate between national and international arbitration experts and practitioners, for this reason alone that the 2018 Rules will be met with great interest and will find broad acceptance. Now they have the chance to prove their value in daily practice.
The authors are happy to answer any questions. Furthermore, they point out that Dr. Theune’s German language commentary on the 2018 Rules has already been published (as a chapter in Schütze, Institutionelle Schiedsgerichtsbarkeit, 2018). An English edition is forthcoming