After a comprehensive review of its rules, DOCDEX – ICC’s trade dispute resolution mechanism – has been enhanced to increase transparency, enhance time-efficiency and widen its relevance in addressing potentially any trade finance-related dispute.
DOCDEX rules now offer potential solutions to disputes surrounding trade loans, syndications, negotiable instruments, risk purchase agreements, conflicts of priority, and letters of credit fraud. What’s more, all areas of trade finance are covered, whether or not a set of ICC rules applies.
As before, the DOCDEX mechanism allows bankers and traders the expert support required to facilitate negotiations, with the aim of encouraging settlement between disputants without damaging potentially-valuable trading relationships.
Keeping DOCDEX Current
The changes respond to limitations that – despite the scheme’s overall success – have become apparent since DOCDEX was launched in 1997. Whether in terms of selecting experts, dealing with administrative delays or struggling to find solutions to procedural challenges, the past 18 years it have shown that a faster, more comprehensive solution was required: hence the revised rules.
Expanding DOCDEX’s scope was a primary driver behind the rule revision; not least because DOCDEX panels were previously only able to resolve disputes governed by ICC rules. This left large segments of trade finance transactions beyond DOCDEX’s scope, preventing many international bankers and traders from submitting a query for an official commission opinion. Another key aim was speed, which has been aided by digitisation, and a third was transparency.
The process of appointing experts has been revised with both transparency and impartiality in mind. Any candidate hoping to become an expert on a case is now required to file a statement to ICC confirming their availability, independence and neutrality. This ensures they do not have any additional involvement in the case beyond their decision-making duties.
Equally in the interest of transparency – but also serving to set future precedents – the updated rules provide that decisions are published more frequently and quickly. The hope is that all decisions – or at least extracts from them – will be freely available on a dedicated website: the aim being that they can be accessed at any time by anyone.
DOCDEX now Digital
The digitisation of DOCDEX is another element of ICC’s enhancement. The aim is to facilitate the implementation of electronic submissions, according to standard templates available on-line. While speed has always been a hallmark of the DOCDEX process, with decisions typically reached within 30 days of a claim, the change in format has streamlined case administration, leading to faster, more efficient proceedings and minimising administrative delays.
Yet much of the original DOCDEX process worked well, with the original rules proving their effectiveness at resolving a broad variety of trade disputes. So many of the founding features of DOCDEX remain, although where necessary they have been clarified or reinforced. These include:
- Its distinctively non-binding character: The decisions of the DOCDEX process are not mandatory, unless both parties otherwise agree at any stage of the dispute. The aim is to free neutral experts from due process – allowing them to devise flexible approaches to forming decisions.
- The DOCDEX examination process: A panel of three impartial experts study the documents involved in a claim. The advantage here is that those forming the decision fully understand the trade instruments underlying the dispute, and are fully aware of trends, challenges and practices across the trade finance industry.
- Decisions scrutinised by a Banking Commission technical adviser: This ensures that the verdict is in-keeping with ICC rules, DOCDEX precedents and International Standard Banking Practice (ISBP) in trade. While reinforcing the credibility of the DOCDEX process, this last stage also makes decisions more reliable and fair to all parties.
- The cost cap: Ultimately, while alternatives such as litigation and arbitration are costly and protracted DOCDEX offers valuable expertise at a much cheaper price. In DOCDEX proceedings, total costs are capped at US$5,000 – $10,000, depending on the amount in dispute. Crucially, the low-cost of DOCDEX makes it available to banks and businesses of all sizes.
ICC’s focus has therefore been to revise DOCDEX rules to enhance the process, while retaining the key features that make it a viable solution for trade dispute resolution.
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