London Court of International Arbitration (LCIA) Issues New Arbitration Rules

Holland & Knight LLP

The London Court of International Arbitration (LCIA) issued its new arbitration and mediation rules on Oct. 1, 2020. These rules will apply to all arbitrations commenced after said date unless the arbitration agreement indicates something different. The LCIA is one of the most prestigious and important arbitral institutions in the world, and an option to consider in any dispute.

These new rules mainly update various aspects that deal with procedural efficiency, which are summarized below.

Costs

The rules update and increase the previous fees contained in the schedule of costs. This includes the registration fee to commence an arbitration (increased from 1,750 pounds to 1,950 pounds), the general administrative costs of the institution (increased by 10 percent to 15 percent), the emergency arbitration application fee (from 8,000 pounds to 9,000 pounds), the maximum hourly fees for arbitrators (from 450 pounds to 500 pounds per hour) and the emergency arbitrator fees (from 20,000 pounds to 22,000 pounds). Importantly, the rules now include a fee for the tribunal secretary.

Nationality of the Parties

As part of the parties' initial briefs, each party must confirm its nationality.1 The rules also contain guidelines to determine the nationality of individuals or legal entities for purposes of the arbitration.2

Early Determinations

In order to allow for more efficient proceedings, the rules introduce the possibility for an arbitral tribunal to make early determinations prior to its final decision.3 These determinations may rule that any claim, defense or counterclaim is outside the tribunal's jurisdiction or is manifestly inadmissible.

Efficiency

The rules expand the powers of the arbitral tribunal to control the process through procedural orders.4 Arbitrators will now have express powers to, for example, limit written submissions or written testimony to a certain length, or to decide that a hearing is not necessary.

Consolidation and Composite Requests

The rules give greater control to the tribunal and the LCIA over decisions to consolidate cases.5 Previously, consolidation required that the arbitrations involved the same parties, and that the cases had been initiated under the same arbitration agreement.

The rules now also allow for consolidation where arbitrations arise from the same transaction or series of transactions. In addition, and importantly, the arbitral tribunal may also choose to conduct concurrent arbitrations where the parties are the same, the arbitrations are subject to the LCIA rules and the arbitrations are commenced under identical or compatible arbitration agreements.

Furthermore, the rules now allow a claimant to file a request for composite arbitrations.6 That is, a single request for various arbitrations regarding disputes under multiple contracts. Likewise, a composite response can be filed for all arbitrations.7

Use of Electronic Communications

The rules also give greater flexibility to hold hearings in a virtual format. The rules expressly refer to the possibility of virtual hearings, telephone conference calls, videoconference or any other technological means available.8

Likewise, the rules reinforce the use of electronic communication to conduct the arbitration. Both the request for arbitration9 as well as the response10 and all communications during the proceedings11 must be made electronically.

Data Protection

The new rules include a provision on data protection.12 The court may adopt any security measures to protect the information shared in the arbitration, including taking into consideration the applicable law.

Tribunal Secretaries

The rules include, for the first time, an express rule regulating the practice of appointing tribunal secretaries.13 Generally, secretaries assist in the administration of the case and may allow for cost savings, however this historically has been a poorly regulated area.

In this sense, the rules establish that the tribunal cannot delegate its decision-making functions and that the secretaries must present written statements indicating that they will be impartial and independent. Finally, they establish that the appointment is conditional on the consent of the parties.

Award

Continuing with the preference for electronic means of communication, the rules now establish that, unless otherwise agreed by the parties, the awards may be signed electronically or on separate counterparts that will subsequently be combined into a single instrument.14

In addition, and importantly, the tribunal must now make its best efforts to render the final award within three months of the last submission from the parties.15 Here, it is notable that the language of the rules is not mandatory, so that tribunal must merely make its best efforts to issue the award.

Jurisdiction of English Courts

The rules state that the parties to an arbitration submit themselves irrevocably to the exclusive jurisdiction of the English courts for any disputes between the party and the LCIA, an arbitrator or a court clerk.16 This should not be confused with the courts of the seat, which will have jurisdiction to determine actions such as the annulment of an award.17

General Conclusions

Although the new rules do not significantly modify the previous text and its scope, there are very particular modifications that make important changes in terms of efficiency. Updates on the use of technology, in general, are very welcome in light of the current global situation.


Notes

1 Rules, articles 1.1 y 2.1.

2 Rules, articles 6.2 y 6.3.

3 Rules, article 22.1(viii).

4 Rules, article 14.6.

5 Rules, article 22A.

6 Rules, article 1.2.

7 Rules, article 2.2.

8 Rules, article 19.2.

9 Rules, article 1.3.

10 Rules, article 2.3.

11 Rules, article 4.2.

12 Rules, article 30A.

13 Rules, article 14A.

14 Rules, article 26.2.

15 Rules, article 15.10.

16 Rules, article 31.3.

17 Rules, article 16.4.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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