The London Court of International Arbitration (“LCIA”) has just unveiled its new rules, which go into effect on 1 October 2014. The new LCIA rules follow on from other recent rule changes released by other major arbitration institutions such as the ICDR/AAA in early 2014, HKIAC and SIAC (both 2013), ICC (2012), and the SCC (2010).
This briefing highlights the keys changes from the 1998 version of the LCIA rules.
- The timing of the Response has been shortened from 30 days to 28 (Article 2.1). Also, the “commencement” date has been defined as the date of the receipt by the Registrar of the Request (rather than the service of the Request on the Respondent).
- The Response and the Request can now be submitted electronically (Articles 1.3 and 2.3).
- No delay in the formation of the arbitral tribunal through deficiencies in either the Request or the Response (Article 5.1).
- The new default position is that the arbitral tribunal and parties should communicate directly (copying the Registrar) (Article 13.1), and not through the Registrar as before.
- After the constitution of the arbitral tribunal, the parties should meet the tribunal to discuss the conduct of the proceedings within 21 days (Article 14.1).
Formation and Powers of Arbitral Tribunal
- Each arbitral candidate should be “ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious and efficient conduct of the arbitration” (Article 5.4).
- An arbitral tribunal of more than three arbitrators in exceptional circumstances can be appointed (Article 5.8). No party can unilaterally nominate a sole arbitrator or a chairman, in absence of a written agreement between parties (Article 7.3).
- Arbitrations can be consolidated by the arbitral tribunal where the parties have agreed in writing and with the approval of the LCIA Court (Article 22.1(ix)). Consolidation may occur without the parties’ agreement with the approval of the LCIA Court, where there are multiple arbitrations involving the same parties and only one tribunal has been appointed (Article 22.1(x)).
- After the constitution of the arbitral tribunal, interim measures may be sought from a court in exceptional cases with the tribunal’s authorisation (Article 25.3).
Emergency Arbitration and Expedited Formation of Tribunal
- The LCIA rules already provided for an expedited formation of tribunal under Article 9 in the 1998 Rules. This has become new Article 9A.
- Article 9B of the new rules now allows the parties to make an application for the appointment of an emergency arbitrator for emergency proceedings pending formation of the arbitral tribunal. The emergency arbitrator is to be appointed by the LCIA Court within three days (or as soon as possible). The Emergency arbitrator is not required to hold any hearings and has to decide the claim for emergency relief no later than 14 days following the appointment.
Default Seat and the Arbitration Agreement
The term “Arbitration Agreement” is now defined under the preamble that incorporates both the arbitration agreement itself and the LCIA rules.
If any part of the arbitration agreement is considered to be invalid, ineffective, or unenforceable by a court or a tribunal, this does not automatically affect the validity of any order or award of the arbitral tribunal or any other part of the arbitration agreement (Article 32.3).
After the uncertainty of recent decisions on the applicable law of the arbitration agreement, the new LCIA rules make clear that the law of the arbitration agreement (as well as the law of the arbitration) shall be that of the seat of the arbitration (Article 16.4).
Conduct of Legal Representatives and Parties
- Any change or addition to the parties’ legal representatives has to be notified to other parties, the arbitral tribuna,l and the Registrar and such change or addition is subject to the arbitral tribunal’s approval (Article 18.3).
- The arbitral tribunal’s approval may be withheld if the change or addition compromises the composition of the arbitral tribunal or the finality of the award (Article 18.4).
- A new Annex contains general conduct guidelines that apply to all legal representatives appearing by name before the arbitral tribunal. Legal representatives should not engage in activities intended unfairly to obstruct the arbitration or jeopardise the finality of any award, including repeated challenges to an arbitrator’s appointment (Paragraph 2 of the Annex).
- Legal representative should not make false statements to the arbitral tribunal or LCIA Court (Paragraph 3 of the Annex), should not knowingly procure false evidence (Paragraph 4 of the Annex), should not conceal documents ordered by the tribunal (Paragraph 5 of the Annex), or initiate unilateral contact with the tribunal without disclosure (Paragraph 6).
- In the event of a complaint by another party or on its own initiative, the arbitral tribunal may decide after consulting the parties and granting that legal representative a reasonable opportunity to answer the complaint, to determine that a legal representative has violated these general guidelines and to impose sanctions. The tribunal may order any or all of these sanctions: (i) a written reprimand; (ii) a written caution as to future conduct in the arbitration; and (iii) any other measure to fulfil its duties to act fairly and impartially between parties and to adopt procedures suitable to the circumstances, avoiding unnecessary delay and expense so as to provide a fair, efficient, and expeditious means for the final resolution of the parties’ dispute (Article 18.6).
The new LCIA rules will be welcomed for being modern, streamlining the process of arbitration to cut delays and costs, clarifying the powers of the arbitral tribunal, and the procedural aspects. They are the first set of rules to provide a mandatory provisions on party representation and conduct and to give power to the arbitral tribunal to impose sanctions.