Introduction to ICC Arbitration
Once the original rules turned out to be limiting and couldn’t manage expert appointment procedure, the governing body brought out the new set of rules. In 2012, a new comprehensive approach brought a revolution in the scope of administration. It answered all the struggling questions, unprecedented procedural challenges and unwarranted delays
Georges Affaki –
The chairperson of ICC DOCDEX crafting committee mentions that the rules are drafted by dispute resolution experts and banking staff. The rules are popular for transparency and contribute heavily in the world of trade. These can also cope with the current changed situation of the banking systems.
The revised DOCDEX regulations will come to the forefront on 20 November 2020 in Washington DC by the ICC Executive Board
Some crucial features of the revised DOCDEX regulations include the following:
It has an expanded scope. The rules are developed by the expertise of the commission. So these enjoy an enlarged scope earlier unavailable. Trade finance related issues too are answered herein. The expansion comes with several strict conditioning to maintain a peaceful transition. Both the respondent and the claimant have to provide consent on the same. Only on the approval of the governing body, the changes will come to the forefront. The claimant and the respondent need to submit individual cases to the DOCDEX for approval.
The new rules, according to the experts, are more transparent. The procedure to get experts appointment is revised. The experts will maintain availability, impartial attitude and liberty to deal with the respective clients. Also, several ethical safeguards included in the context will ensure an impartial ecosystem. Upon approval from the experts, no further disputes come into consideration.
The revised rules are more straightforward
The rapidity of decision making in the revised rules is highly commendable. The experts will have to close the file within 30 days. This time period is maintained both online and offline. Submissions and subsequent communications will be entertained on both the media. This is great news for the world trade as it can witness rapid progress upon the approval of the revised rules.
Kah Chye Tan, the Chair of the ICC Banking Commission rightly pointed out that the ecosystem of world trade has dramatically shifted since the past decade. Barriers and borders are broken time and again. Widespread liberalization characterises today’s market scenario and this trend is emerging. The market needs a new and revolutionary solution. Only a change can deal with the disputes. The revised DOCDEX, the chair continues, has adopted a hundred per cent voting right. Thus the rules are not merely legislative but completely democratic in nature. Also, since the active banking members can vote in it, the ICC arbitration rule is precisely relevant for them.
Pitfalls for businesses
Involving the muddles of world trade and finance has several pitfalls for businesses. Even then small and mid-market enterprises indulge in it. They depend on accessing the banking service so as to reach new markets and grow business. Trade finance also helps the companies in mitigating risks involved in exporting and importing services and goods. They permit the world trade to continue in a secure and predictable way.
Trade finance is indeed a key element for expanding international trade through the decades. Bank intermediated financial exchanges now comprise more than one-third of the entire world economy. This equals around trillions of US dollars per year.
Trade finance is indeed essential to maintain an international trading system. However, it has more to offer than just that. It contributes to the future shape of global financial growth. SME is now the backbone of the world economy. It represents around 64% of the private sector jobs. Further, it represents more than 90% of companies across the globe. Needless to say that it plays a significant role in social cohesion and employment promotion.
The shortage or any gap in the supply chain of trade finance hurts this SME beyond imagination. Thereby it produces a negative impact on the world economy and sustenance around the world.
We must acknowledge the contribution of a robust regulation for maintaining banking activity during any critical financial condition. It is also essential to mention that the rules don’t affect the banks’ power to help businesses by financing their international activities. Contemporary businesses rely mainly on these. Entrepreneurs these days don’t need to have a lump sum amount to invest in the first go. They prefer to launch an MVP or Minimum Viable Product to win a competitive edge in the market. Then as their budget permits or depending on the audience’s demand, they scale their services or products. Banks play a crucial role in this scaling. It’s with their support that the entrepreneurs plan to take a brave leap.
Due to the immense importance of trade finance for economic growth and world trade, ICC has published a worldwide survey on trade finance. They took huge data from 100 countries. The survey offers an in-depth study on how the trends in trading and finance have evolved with time. It also observes the importance of several policies that have impacted in risk mitigation and funding. ICC arbitration rules play a huge part in this. The survey mentions it all.
An ICC global survey in 2018 reveals that around 60% of the banks have implemented several technological solutions. They have also adopted measures to digitalize the operations of trade finance. 9% of the banks have mentioned that the solutions have led to shortening the costs and time required in the financial transaction. This indicates a huge success for the revised rules. The report further points out that the entire industry has to agree on various common standards for the benefits of trading. ICC arbitration rule is a clear step towards that.