On 1 October 2016 the DIFC-LCIA Arbitration Centre (the “Centre”) released its new Arbitration Rules (the “2016 Rules”), which apply to all DIFC-LCIA arbitrations commenced on or after that date.
The New Rules
A number of substantive changes have been introduced by the 2016 Rules, with the emphasis being on ensuring that DIFC-LCIA arbitrations proceed as expeditiously and cost-effectively as possible. The most important of these changes are discussed below:
Access to an Emergency Arbitrator (Article 9B)
Under the 2016 Rules, either the Claimant or Respondent may, at any time prior to the formation of the arbitral tribunal, apply for the “immediate appointment of a temporary sole arbitrator” (the Emergency Arbitrator) to conduct “emergency proceedings” to determine urgent matters or deal with applications for emergency relief, including injunction orders and orders for specific performance.
Once an application for an Emergency Arbitrator is made by a party, the LCIA Court must determine the application as soon as possible in the circumstances, and if the application is granted the LCIA Court must appoint an Emergency Arbitrator within three days of receipt of the application. The Emergency Arbitrator must then decide the claim for emergency relief as soon as possible, and in any event no later than 14 days following his/her appointment.
Any order or award by the Emergency Arbitrator “may be confirmed, varied, discharged or revoked, in whole or in part” by the arbitral tribunal once formed.
The availability of an Emergency Arbitrator offers the parties a remedy for resolving urgent matters that would otherwise only be available via the courts; notably, however, the availability of this emergency procedure does not prejudice any party’s right to apply to a state court or other legal authority for any interim or conservatory measures before the formation of the arbitral tribunal, and it is not to be treated as an alternative to or substitute for the exercise of that right.
By Articles 1.5 and 2.5, the 2016 Rules recognise in express terms that there may be one or more Claimants and/or one or more Respondents, each of whom may be jointly or separately represented. Further, Article 15.6 provides the arbitral tribunal with the power to “provide additional directions as to any part of the written stage of the arbitration (including witness statements, submissions and evidence), particularly where there are multiple claimants, multiple respondents or any cross-claim between two or more respondents or between two or more claimants”.
Under Article 22.1(ix) and (x) of the 2016 Rules — the 2008 Rules were silent on consolidation — the arbitral tribunal has the power (upon application by the parties) to order, with the approval of the LCIA Court, the consolidation of separate arbitration proceedings. Importantly, there are restrictions on this power:
- all the parties to the arbitrations to be consolidated must agree to consolidation;
- the arbitrations must be between the same disputing parties and be subject to the DIFC-LCIA Rules, and must have been commenced under the same arbitration agreement; and
- the arbitral tribunal must not yet have been formed in the other arbitration(s), or, where it has already been formed, it is composed of the same arbitrators.
Further, Article 22.6 provides that the LCIA Court itself may determine that two or more arbitrations should be consolidated:
“the LCIA Court may determine, after giving the parties a reasonable opportunity to state their views, that two or more arbitrations, subject to the DIFC-LCIA Rules and commenced under the same arbitration agreement between the same disputing parties, shall be consolidated to form one single arbitration subject to the DIFC-LCIA Rules, provided that no arbitral tribunal has yet been formed by the LCIA Court for any of the arbitrations to be consolidated.”
The introduction of these provisions in respect of multiple parties and consolidation is certainly welcome; these new rules address the procedural difficulties that can arise in circumstances where there are multiple parties to the same dispute (and/or multiple contracts), and as such afford a measure of certainty to parties in multi-party and multi-contract scenarios.
Sanctions for Poor Conduct of Legal Representatives
Under the 2016 Rules, the arbitral tribunal has the power to sanction legal counsel in the event of poor conduct: appended to the Rules as an Annex is a set of “General Guidelines for the Parties’ Legal Representatives”. These guidelines — which are identical to those annexed to the LCIA’s 2014 Arbitration Rules — are “intended to promote the good and equal conduct of the parties’ legal representatives”, and Article 18.6 of the Rules gives the arbitral tribunal the power to deal with violations of the guidelines.
Where a party to the arbitration, or the arbitral tribunal itself, makes a complaint against another party’s legal representative, the tribunal may decide — after giving that legal representative the opportunity to answer any complaint made against him/her — whether or not he/she has violated the guidelines.
If the arbitral tribunal determines that the legal representative in question has violated the guidelines, the tribunal may order “any or all of the following sanctions against the legal representative: (i) a written reprimand; (ii) a written caution as to future conduct in the arbitration; and (iii) any other measure necessary to fulfil within the arbitration the general duties required of the Arbitral Tribunal under Articles 14.5(i) and (ii)”.
Measures to Increase Efficiency and Avoid Delays in Proceedings
The 2016 Rules include a number of measures designed to provide a more efficient process for the formation of the arbitral tribunal, with Article 5.1 expressly providing that the formation of the tribunal by the LCIA Court “shall not be impeded by any controversy between the parties relating to the sufficiency of the Request or the Response” and that the LCIA Court “may also proceed with the arbitration notwithstanding that the Request is incomplete of the Response is missing, late or incomplete”.
Further measures introduced by the Rules with the purpose of increasing the speed and efficiency of proceedings include the following:
Article 9C provides for the expedited appointment of a replacement arbitrator, with any of the parties having the right to apply for such an appointment. The LCIA Court “shall determine [any such] application as expeditiously as possible in the circumstances”.
Article 10 provides the LCIA Court with the power to revoke an arbitrator’s appointment; previously, this was only available on application from the other members of the arbitral tribunal or any of the parties to the proceedings. Article 10 also provides the parties to the proceedings with the right to challenge the appointment of an arbitrator, including — only for reasons of which the challenging party becomes aware after the appointment — an arbitrator whom the challenging party itself nominated.
By Article 11, where the LCIA Court “determines that justifiable doubts exist as to any arbitral candidate’s suitability, independence or impartiality, or if a nominee declines appointment as arbitrator, or if an arbitrator is to be replaced for any reason”, the Court has the power to determine “whether or not to follow the original nominating process for such arbitral appointment”. Further, where any opportunity given by the Court to a party to make any re-nomination is not exercised within 14 days, the LCIA Court may determine that the opportunity has been waived, and “shall appoint the replacement arbitrator without such re-nomination”.
Parties to arbitration proceedings may also make use of the new online filing system, by which Requests, Responses and various forms of application may be filed, and filing forms paid online.
The introduction of the 2016 Rules marks the first time revisions have been made to the Centre’s arbitration rules since its launch in 2008. By bringing the Centre’s arbitration rules into line with the LCIA Arbitration Rules 2014, and in reflecting international best practice, the 2016 Rules demonstrate the Centre’s commitment to being a leading body for international dispute resolution, and are sure to enhance its global appeal as a forum for international arbitration.