DELOS UPDATES RULES AND INTRODUCES FURTHER INNOVATIONS

Dear Colleagues

We are very pleased to share the first significant update to the Delos Rules of Arbitration, since being designed eight years ago. They come into force today, 1 November 2021.

Drawing on the expertise and experience of our Board of Advisors and Arbitration Consultative Committee, the revisions complete the Rules and address recent developments, they mark an evolution reflecting Delos's growing popularity, and they innovate by creating a new mechanism to support parties after the rendering of the award. We explain this more fully below.

We are grateful to our dedicated Rules Revision Committee composed of Víctor Bonnín Reynés, Thomas Granier, Amélie Lucchese, Iain McKenny and Hafez Virjee, and wish to acknowledge the input and guidance of many colleagues, listed below.

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Innovation. The updated Rules offer a major innovation with the introduction of the Delos Compliance Reinforcement Mechanism.

The resolution of a dispute is not necessarily achieved with the rendering of a final award: a party may fail to comply with the award, in whole or in part. This new mechanism allows an award creditor to obtain the publication on Delos's website of a Compliance Failure Notice once the time-limits for all forms of recourse against the award have expired at the seat of arbitration. The procedure provides the possibility for the award debtor to comment on the application, and for the parties to comment on the draft notice, and publication is not automatic but a question to be decided by Delos.

The mechanism has been designed so that it may be used by parties irrespective of their preferred form of arbitration in their contract (see here for a model clause).

Completing the Rules and addressing recent developments. The updated Rules address a number of new topics, at times charting novel approaches to achieve a more balanced procedure. These topics include:

The arbitration agreement and its applicable law, prima facie dismissal, consolidation, joinder, the possibility of using lists of potential arbitrators when making nominations, and legal representation and third-party funding.

The possibility of a pause in the procedural timetable for settlement discussions (whether or not as part of a mediation).

Ex parte interim and conservative measures, remote hearings, the costs implications of settlement offers, and consent awards.

Evolution of the Rules. Finally, the updated Rules contain three evolutions:

First, they mark a shift in how we approach 'safe seats'. Previously, the list of safe seats in the model clauses was tied to the time and costs schedule, with full institutional discretion as to time and costs if the parties chose a seat not in the list. The new approach now leaves the parties with full discretion in the choice of the seat, and the chosen seat is taken into account when fixing the arbitration costs and determining the time granted to a tribunal to submit its draft award (be it partial, interim or final) to Delos for scrutiny, within the framework of Delos's updated time and costs schedule. This reflects the broadening reference to Delos in contracts across the globe, and the widespread usage of Delos's Guide to Arbitration Places (GAP), which contains a list of 'safe seats' (here).

The approach to the language of the arbitration has evolved in like manner: while previously the Rules contained a list of four languages in which Delos would conduct proceedings, parties may now choose any language (as at other institutions, Delos will administer the case in English if it is not able to do so in the language chosen by the parties). A Spanish version of the Rules is live here, with translations of into French and Portuguese currently underway. We welcome expressions of interest to translate the Rules into further languages.

The Rules previously contained two costs schedules: one for contracts that were not registered with Delos, and another lower one for contracts that had been registered with Delos. The updated Rules now contain a single costs schedule, aligned with the earlier lower costs schedule. Furthermore, parties who register their contracts with Delos may benefit from an additional reduction of costs. A costs comparison is presented at Question 9.4 of Delos's FAQs.

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In presenting these updated Rules, we wished to acknowledge the support of the following colleagues: Jawad Ahmad, Melina Bellaguarda Kotzias, Adam Bryan, Christina Charemi, Rahul Donde, Maria Hauser-Morel, Tabitha Joy Raore, Cristina Musat, Mohamed Nizam, Claire Pauly, Ezequiel Pien, and Sami Tannous; and we thank the GAP Working Group as well for its thoughtful review of the Delos Rules of Arbitration as part of preparing the second edition of the GAP earlier this year.

In the coming weeks, Delos will be organising or taking part in various events to present these changes and innovations more fully: we look forward to seeing you on these occasions.

Best wishes

Neil Kaplan CBE QC SBS, Board President
Hafez R Virjee, President

FEATURES & EVENTS ABOUT DELOS'S UPDATED RULES OF ARBITRATION

In addition to the ARBinBRIEF video series, in which every episode considers a different provision of the Delos Rules, the following features and events discuss Delos's updated Rules of Arbitration: