The London Court of International Arbitration (LCIA) has decided to end its physical presence in India, with the closure of its independent subsidiary, LCIA India.
The decision to end physical presence in India was based on market feedback that Indian parties were content to continue to use LCIA rules, and also owing to insufficient adopters of LCIA India clauses to justify a presence on the ground. The LCIA will revert to its traditional model of offering institutional arbitration services to Indian parties and international parties doing business with Indian counter-parties through LCIA London. It plans to develop legal, language and cultural expertise in its case-work teams to better serve the needs of the Indian market.
Arbitration continues to grow India, and recent judicial pronouncements are generally viewed as being pro-arbitration. For a round-up of recent developments, please see our recent e-bulletin here.
The practical implications of the LCIA's decision for parties with LCIA India cases or arbitration clauses in their contracts are as follows:
- existing cases before LCIA India will be supported from the London office and the London based casework team, starting 1 June 2016, under the LCIA India rules;
- new referrals under the LCIA India rules based on contracts concluded prior to 1 June 2016 will be administered from London under the LCIA India rules;
- new referrals based on contracts concluded after 1 June 2016 which contain clauses referring to LCIA India will not be accepted for administration. The LCIA will, however, administer such cases using the LCIA rules if the parties mutually agree to this.
LCIA India began operations in 2009 in Delhi, and was operationally independent of the LCIA. It published its first set of rules in 17 April 2010. As noted by its registrar Ajay Thomas, it was established with “the idea of bringing London quality to Indian parties at Indian rates”. It achieved some success in terms of the referrals received by it, but by August 2013, the case load remained in single digits with cases being "mostly related to international trade contracts and construction and infrastructure deals, while the oil and gas sector was also gaining traction". In most disputes received, the contracts had ad-hoc arbitration clauses.
Despite its short life-span, LCIA India played an important role in the dissemination of the benefits of institutional arbitration in India. The LCIA aims to continue to promote arbitration in India, and is planning to organise symposia and events in the future, including an event to be held in April 2016.