Guide to the LCIA Arbitration Rules Update
The London Court of International Arbitration (LCIA) Arbitration Rules Update (2020) (“the 2020 Rules”) come into force on 1 October 2020 and will apply to any LCIA arbitration commenced from that date (unless the parties have contracted otherwise).
The updates are said to “…reflect both practical insights gained from extensive experience of their application and a forward-looking anticipation of the needs of users in years to come…with an unmistakably modern and progressive approach.”
The most significant changes relate to the introduction of a summary procedure for:
- early disposal of defences or claims without merit,
- use of electronic communication,
- the use of virtual hearings.
All of which have without doubt become more relevant as we navigate the coronavirus global pandemic.
The key amendments include:
Bringing it in line with other arbitral institutions (SIAC, SCC and the ICC) (and indeed, the courts), one of the key updates, in Article 22.1 (viii) is the power now given to the arbitral tribunal to determine that “any claim, defence, counterclaim, cross-claim, defence to counterclaim or defence to cross-claim is manifestly outside the jurisdiction of the Arbitral Tribunal, or is inadmissible or manifestly without merit;”.
Where the arbitral tribunal considers it appropriate to do so, they can issue an order or award to that effect “an Early Determination”.
While it remains to be seen how “manifestly without merit” will be interpreted, this is a welcome change and will allow parties to seek summary disposal of claims, counterclaims and / or cross-claims without merit which should see time and consequently, cost savings in relevant proceedings.
A further welcome change to the expedition of arbitrations is the time within which the arbitral tribunal is make its award: Article 15.10 of the 2020 Rules provides that the arbitral tribunal shall endeavour to make its final award no later than three months following the last submission from the parties.
This gives a degree of certainty to the parties in terms of when they can expect a determination on the matter.
The 2020 Rules confirm the use of electronic communication as the default position with the LCIA. Article 4.1 provides that a request for arbitration and any response must be in electronic form either by email or any electronic filing system operated by the LCIA; and Article 4.2 provides that unless with prior written approval, any communication in relation to the arbitration must be by email.
In addition, Article 26.2 provides that any award of the Arbitral Tribunal may be signed electronically and / or in counterparts.
These changes reflect the move away from hard copy papers and the general preference for email communications with the time, cost and resource efficiencies they bring.
Hand-in-hand with the focus on electronic communications, Article 30A of the 2020 Rules deals with Data Protection and the processing of personal data by the LCIA.
The 2020 rules now allow flexibility as to the format of any hearing.
Article 19.2 provides that hearings may be conducted in person, or virtually by conference call, videoconference or other communications technology with participants in one or more geographical places (or a combination).
The arbitral tribunal also has the power to require specific questions or issues to be addressed or to limit the questions or issues to be addressed.
Particularly in relation to cross border matters, these changes could lead to significant time and cost efficiencies for parties.
There are express provisions in Article 14A dealing with the role of tribunal secretaries. Article 14.10 provides that an arbitral tribunal may only obtain assistance from a tribunal secretary once the tribunal secretary has been approved by all parties.
The maximum hourly rate for arbitrators will increase to £500 per hour. This is intended to reflect the demands of users in certain cases involving complex and significant disputes. The hourly rate that can be charged by the LCIA Secretariat for the administration of the arbitration has also seen an increase.
The LCIA’s press release and the 2020 Rules can be accessed here.
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