Introduction

The London Court of International Arbitration (LCIA) is shortly to promulgate a revised and modernised edition of its arbitration rules (LCIA Rules). The proposed revisions to the LCIA Rules reflect many of the developing trends in international arbitration that have shaped the updated rules of other popular institutions, such as the International Chamber of Commerce (ICC) and the Singapore International Arbitration Centre (SIAC). These include a more streamlined procedure, important presumptions as to the seat of arbitration and the law governing the arbitration agreement and an emergency arbitrator procedure. The LCIA’s own contribution to the evolving landscape is the introduction of guidelines for the conduct of parties’ legal representatives, breach of which will give a tribunal the power to impose sanctions. The form of the new rules is yet to be finalised and some of the provisions discussed below may be altered or not included once the LCIA drafting committee considers comments made at its recent meeting on 9 May 2014.

Procedure

Feedback from arbitration users has frequently included concerns or complaints about delay and cost. The ICC responded to this feedback with a number of changes to its rules in 2012 and also produced a booklet, “Techniques for Controlling Time and Costs in Arbitration”, for parties and arbitrators. The new LCIA Rules contain a number of provisions to address those same concerns. Before appointment, arbitrators must provide a declaration that they are “ready, willing and able to devote time, diligence and industry to ensure the expeditious conduct of the arbitration” (Article 5.4). Once the tribunal has been constituted, the parties and the tribunal must make contact within 21 days in order to discuss the conduct of the reference (Article 14.1). The tribunal must also render its award “as soon as reasonably possible” (Article 15.10).

As to delay and expense caused by the non-cooperation by a party, the tribunal may now take such conduct into account when making its award on costs (Article 28.4).

Consolidation

The contractual foundation of arbitration gives rise to difficulties in the consolidation of related disputes which arise out of separate contracts. An area where this is commonly encountered is in construction disputes between employer, contractor and subcontractors. The new LCIA Rules contain express provisions allowing a tribunal in certain circumstances to add a non-party to the arbitration and to consolidate separate LCIA arbitration proceedings (Articles 22.1(viii) – (x)).

Default seat of arbitration

Similar to the rules of the SIAC, the new LCIA Rules provide for a default seat of arbitration (which is London, England) in the absence of agreement of the parties. The tribunal, once constituted, may order a different seat to be more appropriate, after seeking the views of the parties (Article 16.2).

Law of the Arbitration Agreement

Parties usually do not include a governing law provision in their arbitration agreements. As a result, a dispute can arise over whether the arbitration clause is to be construed in accordance with the law that governs the main agreement or the law of the seat (or conceivably some other law). These alternatives can lead to strikingly different or even opposing results. For example, an obligation to negotiate in good faith before commencing an arbitration may be enforceable under one law (for example Singapore law) but not under another (such as English law). Uncertainty over the applicable law of an arbitration agreement  has given rise to a number of recent decisions, most notably in England in Sulamerica CIA Nacional de Seguros SA and others v Enesa Engenharia SA and others [2012] EWCA Civ 6,and Arsanovia Ltd and others v Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm).

The new LCIA Rules provides that the law of the Arbitration Agreement (defined as the agreement requiring arbitration to be conducted in accordance with the LCIA Rules, together with the rules themselves) and the law of the arbitration shall be that of the “seat” of the arbitration, unless otherwise agreed by the parties (Article 16.4). This provision neatly resolves the question of what law governs the arbitration agreement and is a welcome feature of the new rules.

Emergency arbitrator

The adoption of emergency arbitrator procedures in institutional rules has become almost de rigueur: they are found, for example, in the rules of the ICC, the SIAC and the Hong Kong International Arbitration Centre. It is therefore not surprising that the new LCIA Rules may also contain such a provision (Article 9). An emergency arbitrator may be appointed in cases of “exceptional urgency” prior to the formation of the tribunal and must render a reasoned decision within 20 days of such appointment. The emergency arbitrator provisions are different from the existing procedure for the emergency or urgent formation of the arbitral tribunal. It remains to be seen whether both provisions will be included in the final version of the LCIA Rules.

Conduct of party representatives

The new LCIA Rules stand alone in expressly seeking to promote good and equal conduct of the parties’ legal representatives. This is a response to the growing support for increased regulation of party representatives in arbitration.

Parties are to inform the tribunal of a change or addition to their legal representatives, and such changes are conditional upon the tribunal’s approval. These provisions are to give the tribunal the power to preserve the integrity of the arbitral process, a power that exists, although formulated differently, in the arbitration rules of the International Centre for Settlement of Investment Disputes (ICSID) and as found in Hrvatska Elektroprivreda DD v The Republic of Slovenia (ICSID Case No ARB/05/24).

Parties are required to ensure that their representatives comply with a set of guidelines annexed to the LCIA Rules as a condition of appearing by name before the tribunal (Article 18.5). Those guidelines require representatives not to act in an unfairly obstructive manner or advance claims known to be unmeritorious. Representatives are also not to make false statements to the tribunal, procure false evidence, conceal documents ordered to be produced by the tribunal or engage in unilateral communications with the tribunal.

A tribunal is expressly empowered to determine whether a representative has acted in breach of the guidelines and, if so, to impose one or more of the following sanctions: a written reprimand; a written caution as to future conduct in the arbitration; a reference to the legal representative’s regulatory and or professional body; and/or any other measure necessary to maintain the general duties of the tribunal (Article 18.6).