ICC Arbitration Rules 2026 overhaul: The end of Terms of Reference and future trends – Episode 3

Join us for the final episode of our ICC Arbitration Rules 2026 series as Jack Hobbs, Associate at Clarkslegal, and Christopher Howitt, Barrister at Three Stone, explore the abolition of mandatory Terms of Reference. They discuss what this significant change means for arbitration practitioners, as well as its implications for the future of arbitration.

In this episode, they cover:

• The reasons behind removing Terms of Reference from the ICC Rules
• How this change affects case management and procedure
• Practical tips for preparing cases under the new rules
• Considerations for updating dispute resolution clauses in contracts
• Potential challenges for enforcement of awards
• The emerging role of AI in arbitration and future trends

For more information or to discuss any of the topics from this episode, please contact Jack Hobbs or Christopher Howitt, who would be delighted to assist you.

ICC Arbitration Rules 2026 Podcast Series

• Episode 1: Overview of the new ICC Arbitration Rules: Key changes
• Episode 2: Accelerating arbitration: Expedited procedures and key changes in the new ICC Rules
• Episode 3: ICC Arbitration Rules 2026 overhaul: The end of Terms of Reference and future trends

Transcript

Jack Hobbs   00:07
 Welcome, welcome everybody to the 3rd and final podcast in our podcast series on the ICC Arbitration Rules 2026. I'm Jack Hobbs. I'm an associate in the dispute resolution team at Clarkslegal and I'm joined again by Christopher Howitt from Three Stone. Chris, good afternoon. 

Christopher Howitt  00:25
Good afternoon, Jack.

Jack Hobbs   00:27
So, in our first two podcasts in this series, we discussed the high-level key changes in the latest version of the rules and then the expedited procedures in the second podcast. Today, we're going to start by talking about the removal of the terms of reference. And for those who are unfamiliar with the terms of reference. They typically set out the party's claims, the relief sorts, the procedural framework for the arbitration. And in practice, many users viewed them as adding cost and procedural complexity without having a large benefit on the narrowing of the dispute at such an early stage. Chris, we touched in the first podcast that neither of us were particularly big fans of the terms of reference. Again, I expect there's little to add on that, but they weren't for you, I take it. 

Christopher Howitt  01:21
I think we can live pretty comfy without terms of reference.

Jack Hobbs   01:25
Indeed, and they've been a key feature of ICC arbitrations for many years. But the key in these new rules is that they're no longer going to be mandatory. So other institutions have taken various approaches which sidestep the need for terms of reference. And it's not novel that an arbitration can be conducted effectively without the need for terms of reference.  It's been the case for some time now that when following the extradited procedure, terms of reference aren't required and Chris in your experience of that expedited procedure, not missed.
 

Christopher Howitt  02:01
Not missed. They didn't want to get rid of them entirely, so they dipped their toe a little bit and seeing how it would play out, removing them for the expedited procedure. But I guess time will tell, but I suspect people will forget quite quickly about the terms of reference and we'll be happy to make sure that everything is framed appropriately in terms of procedure and everything else in the first CMC in the first procedural order. 

Jack Hobbs   02:30
So the terms of reference are a key part of the ICC arbitration procedure, or at least they have been to the inception of these rules. Chris, what's the usefulness of the terms of reference in practice?

Christopher Howitt  02:44
They historically were useful in framing what fell inside and outside the scope of the arbitration. So, if a party made an allegation later or brought a claim that wasn't fully encompassed by the terms of reference, then you would go back and say, aha, this claim wasn't envisaged at the start. It's not been the scope of this arbitration and you can't advance that claim now. So, in a way, it was a filter trying to pinpoint at the start of the claim what would be encompassed in that arbitration or not.

Jack Hobbs   03:16
Yeah, absolutely. And in terms of the impact on future arbitrations, the ICC has been an effective institution for decades and the terms of reference are not expected to be admitted in every case, but I think realistically a high percentage of them are going to see the terms of reference admitted.

Christopher Howitt  03:39
Yeah, what we see is the ICC really coming into line with the other arbitration institutions that we talked about. And I think the way they will try and limit parties from trying to shoe horn in fresh claims later is to make it very difficult for parties to bring claims that weren't identified at the time of that first CMC. So, the CMC, the first CMC will serve a filtering system at really trying to pinpoint at that stage what the what the alteration is about.

Jack Hobbs   04:13
Yeah, I suppose that you're talking about Article 25 in these new rules and it's not going to be an unfettered ability for parties to introduce new claims throughout the, you know, the cut off is going to be that first CMC.

Christopher Howitt  04:25
The tribunal will have a discretion and we'll see in practise how ready tribunals will be to exercise that discussion.

Jack Hobbs   04:34
So, in terms of the implications, are we going to see a need to front load more of a case preparation in advance of that first CMC?

Christopher Howitt  04:45
I mean, I would think so. I think people should start the arbitration really identifying their claims so that people know the case they have to meet. It's never satisfactory where a party is ambushed late in proceedings with a claim that should and could have been brought a bit earlier.

Jack Hobbs   05:04
Yeah, and I suppose the other benefit is that it's going to be, will hopefully be able to reduce early delays, especially with non-cooperative parties. But it does require some strategic planning up front.

Christopher Howitt  05:17
Indeed.

Jack Hobbs   05:19
So, let's touch on briefly the impact on drafting dispute resolution clauses in light of some of these new expedited procedures. My gut takeaway is that there's no specific need to incorporate anything into contracts immediately. It's currently only a pilot project and parties can opt in at a later date to the highly expedited procedure. But it's certainly something to think about in the future, Chris.

Christopher Howitt  05:47
That's right. To recap, with the highly expedited process, that is opt in only. So, the parties both have to agree to do it. And if you contrast that with the normal expedited process, that automatically applies unless you opt out. And of course, if it doesn't apply to you, parties can nevertheless choose to do it. So, there are various things you could opt into and opt out of. And so, when parties now are settling their dispute resolution clauses, they all want to think, if I'm going on with the ICC, in what circumstances, if any, do I want to use these procedures? What we might see is people having a hybrid process for certain claims, if they really think, you know, that they can anticipate, there might be a debt claim, for example, that would be very straightforward. They might just earmark that and say, that's good for the highly accelerated process. Or they might have a process that pushes claims of a certain value down a certain route. I think we'll just have to see what people decide to do and of course, parties should get legal advice on what might be best suited for their situations. I think you and I might be slightly cautious about recommending parties opt in to heap now when it's, you know, at the very early days. And it may be a better call to be made down the line when the dispute's actually arisen and we can see how heap is really performing in reality.

Jack Hobbs   07:22
Yeah, absolutely and in terms with choosing whether an opt-in clause to the highly expedited procedure is right, parties are really going to have to think whether they're prepared to take a hit on the submission opportunities that the procedure offers and it's one of the beauties of arbitration, isn't it, Chris, that it can be so bespoke that it does give the parties a large amount of flexibility, and it's an element of flexibility that they can even consider long before the arbitration presents itself at the, you know, agreeing the underlying contractual documents which will ultimately host the arbitration agreement.

Christopher Howitt  08:01
Indeed. 

Jack Hobbs   08:02
So, in terms of other practical steps for practitioners, we've mentioned a couple of times about front loading the preparation just by the nature of this slightly different ICC procedure, but there'll also be some risk management points to consider and assessing the enforcement implications. And Chris, what are the key things you're going to have to consider when it comes to enforcement?

Christopher Howitt  08:34
Um, well... One of the grounds of which you can challenge the award is if you haven't had a proper opportunity to put your case or where a tribunal has not given reasons for its decisions. So, we can see that if there's a process where for whatever reason a party is unhappy because it feels that it wasn't able to properly put its case, given the limits of the particular procedure that it had agreed to, and that it was deprived from that opportunity to put its case, didn't get a fair shake. That might be a ground of appeal that's pursued in the future. And likewise, if you go through the highly accelerated process, you get an award which either doesn't give reasons or this very threadbare reasons. Again, depending on the seat where enforcement is being sought, they might, the court being asked to enforce this award and say that assets can be executed against in that jurisdiction. They might be, a judge might be uncomfortable if he hasn't seen this process before in allowing a party to enforce. So, again, we'll have to see how this plays out in practice.

Jack Hobbs   09:46
Yeah, you can you can foresee some courts around the world being very slow to to rubber stamp an award with no written reasons whatsoever that's been decided within three months. And the only final practical step I have to mention is training and preparation. You know, as always, careful consideration of new provisions and their practical implications will be essential, both for the parties themselves, the solicitor teams and council and utility of some of these changes will be put to test over time and it's going to be a learning curve for everyone and the only thing I wanted to add at the end here, Chris is, these rules, I think you described them at the outset of the first podcast as a major overhaul. And I think that's right. But they do show and they are illustrative of the party's desire to have a more efficient and streamlined arbitral process. Just wanted to touch on where we think this could end up. What are we going to see in the next iterations of the rules in four or five years time? And the big topic on everyone's mind at the moment is AI. And if we're already seeing the possibility of awards which have no written reasons, how far away in practise do we think we are from not necessarily the ICC, but other arbitration institutions being prepared to take a big leap into that AI world and leave the decision making to the computer.

Christopher Howitt  11:15
Yeah, well, we're in the early days of AI. I think we both have encountered AI work product in our in our practices. I don't think it's anywhere near where it needs to be for either drafting submissions or taking the role of a decision maker now. We'll just have to see how the technology develops. I suspect for, say, disclosure, legal research tasks, you can see a world in which tribunals would be receptive to the use of AI, where work can be produced reliably and for a minimal cost. As for actually having an AI judge who will sit there as the arbitrator and decide a dispute, who knows if people are happy to have their disputes resolved in that way because they perceive there'll be a cost benefit or whatever else. It's an interesting prospect, but again, you've had your problems potentially down the line with enforcement and everything else. And the reason lots of people want to actually take a case all the way to trial and have it heard by an arbitrator because they want a human being hearing them put their case, and I don't think the computer would ever really be able to step into those shoes.

Jack Hobbs   12:31
Yeah, no, I agree. I don't think they'll ever be able to step into those shoes, but it does seem in some ways the next logical step in efficiency. But we'll have to wait and see on that one. I mean, if I was working for an arbitration institution, you know, I think I'd be certainly considering investing in our own tool or model that can understand and push forward that decision-making process, because I think in, in the next iterations of these rules, we're going to see many institutions building their own products, building their own tools, and trying to showboat their offerings in the AI space to the world.

Christopher Howitt  13:17
Interesting times.

Jack Hobbs   13:18
Interesting times indeed. Well, thank you everyone for coming along this journey with us of these three podcasts on the ICC arbitration rules. If anyone does have any questions, queries, or a burning desire to discuss these rules in more detail, my details and Chris's details are available on the webpage and feel free to get in touch. Thank you very much.

Christopher Howitt  13:41
Thanks very much, Jack.