The 2014 Rules of the London Court of International Arbitration (LCIA) (the 2014 LCIA Rules) come into effect on 1 October 2014 and will automatically apply to LCIA arbitrations filed after that date, irrespective of the date of the underlying contract.1
The table below provides a brief guide to the changes and additions to the 2014 LCIA Rules and this article goes on to consider them by way of comparison with recent changes to practice and procedure in other international arbitration institutions and bodies.
Quick reference guide to the substantive changes
Click here to view table.
Comparison with other arbitral rules
International Chamber of Commerce (ICC)
Some of the changes made to the ICC rules in 2011 in respect of the appointment of emergency arbitrators and consolidation of proceedings are reflected in the 2014 LCIA Rules. The ICC provisions for emergency arbitrators may be less helpful than those of the LCIA, as the arbitrator will issue only an order, rather than an interim award. This could cause difficulties with cross-border enforcement under the New York Convention.
Singapore International Arbitration Centre (SIAC)
The SIAC Rules were revised in April 2013, and included a number of procedural and substantive updates.
Among the most interesting was the inclusion of an express power for arbitrators to rule upon matters that have not been pleaded by the parties (Rule 24(n)). This issue arises regularly in arbitrations, when a party has failed to consider or make submissions on a relevant issue4. SIAC neatly clarifies this issue by specifically allowing the arbitrator to make a ruling on the issue, provided it is brought to the attention of the parties and they have an opportunity to respond.
Arguably, an LCIA arbitrator could adopt a similar approach without falling foul of their general obligations, but the LCIA has not made a specific change in this respect.
Hong Kong International Arbitration Centre (HKIAC)
The HKIAC revised its rules in November 2013. The LCIA, like the HKIAC, has recognised that parties wish to streamline disputes where possible. Both have implemented a new procedure for emergency relief and broadened their approaches to joinder of parties and consolidation of proceedings. Given the prevalence of disputes involving chains of contracts and/or multiple parties, these changes are to be welcomed.
The LCIA has added consolidation powers for situations where there is agreement between the parties and approval by the LCIA; or where multiple arbitrations have been commenced under the same (or a compatible) arbitration agreement, between the same parties, and the tribunals have not yet been formed or are formed of the same arbitrator(s). This allows for flexibility and potential cost-savings, whilst respecting privacy and party autonomy. The HKIAC provision goes further than the LCIA provision, allowing consolidations of arbitrations involving different parties, provided that there is a common legal and factual background, and also allowing the potential for consolidation (or joinder) without all parties’ consent.
The HKIAC’s revisions also homed in on more general cost considerations. It already had a reputation for being at the forefront on costs by allowing a choice of fee structures. The new HKIAC rules introduced an additional fee cap on arbitrators’ hourly rates. At the time of writing, the LCIA had not yet published its new fee schedule and it will be interesting to see whether it follows suit.
International Bar Association (IBA)
The new measures in Article 18 and the Annex of the 2014 LCIA Rules broadly reflect the substance of the IBA Guidelines on party representation (reviewed in the September 2013 edition of IAQ).
The measures bind the parties themselves, making them expressly responsible for the conduct of their representatives. LCIA approval is now required for changes to or additional party representatives during the course of an arbitration. This is intended to avoid conflicts of interest with the tribunal that could compromise the arbitration or award.
It is hoped that these new provisions will assist arbitrators in taking a more decisive, firmer approach to obstructive or underhand tactics, or even simple misunderstandings as to acceptable practice and procedure.
The measures are unlikely to affect arbitrations where all representatives are English, as they are less onerous than the current requirements of the English authorities. (While the LCIA reports that only 25% of cases involve English parties, it is likely that the percentage of English representatives is higher, particularly where the seat of the arbitration is London.)
These recent changes to the rules of several leading international arbitral institutions, including the 2014 LCIA Rules, are aimed at addressing common issues experienced in international arbitration. Although differences remain in how the institutions have addressed these issues, it gives rise to the possibility of a gradual harmonisation of arbitral rules in future.