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Arbitration

New LCIA Arbitration Rules: In force on 1 October 2020

The London Court of International Arbitration (LCIA) recently released its updated arbitration rules (the “2020 Rules”) which will come into force from 1 October 2020 and will apply to any arbitration commenced under the auspices of the LCIA on or after this date. The 2020 Rules, in the LCIA’s own words, aim to make the arbitral processes “even more streamlined and clear” for arbitrators and parties alike. We summarise nine key changes and one omission.

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(1) Case Management Powers Enabling Expedition

The 2014 version of the LCIA Arbitration Rules made clear that the tribunal has “the widest discretion to discharge [its] general duties” and that “the Arbitral Tribunal may, subject to the LCIA Rules, make any procedural order it considers appropriate with regard to the fair, efficient and expeditious conduct of the arbitration”.

The new Articles 14.5 and 14.6 in the 2020 Rules clarify what this “widest discretion” entails in terms of procedure, including shortening timescales, limiting the written and oral testimony of any witness, restricting pleadings, determining a particular issue early in the arbitration and adopting technology. These wide powers will enable a bespoke expedited procedure if required.

The 2020 Rules also incorporate a new Article 9A providing for ”…expedited formation of the Arbitral Tribunal”, a procedure which applies ”…in case of exceptional urgency”. Where the LCIA Court accepts a party’s application, ”the LCIA Court may set or abridge any period of time under the Arbitration Agreement or other agreement of the parties (pursuant to Article 22.5).”

(2) Early Dismissal Determination

One of the most significant developments in the 2020 Rules is the inclusion of explicit provisions dealing with early dismissal determination. Article 22.1(viii) confirms the power of a tribunal ”… to determine that any claim, defence, counterclaim, cross-claim, defence to counterclaim or defence to cross-claim is manifestly outside the jurisdiction of the Arbitral Tribunal, or is inadmissible or manifestly without merit; and where appropriate to issue an order or award to that effect (an ’Early Determination’).”

An application for early dismissal enables a party to take pre-emptive steps to bring the arbitration proceedings to an end where the claims against it are clearly without merit, including claims brought in breach of an applicable limitation period, thus helping to bring down the time and cost of arbitration in appropriate cases.

(3) Multi-Party and Multi Contract Arbitrations

The 2020 Rules also introduce a new provision in Article 1.2 which addresses a gap in the 2014 LCIA Rules in respect of claims arising out of multi-contract arbitrations.  Under the 2020 Rules, a party wishing to commence more than one arbitration, whether that is against more than one Respondent or under more than one arbitration agreement, will be able to serve a composite request for arbitration in respect of all such arbitrations

This new rule addresses the decision of A v B [2017] EWHC 3417 where an arbitration request under the LCIA Rules was held to be invalid because the 2014 LCIA Rules did not permit parties to commence a single arbitration to resolve multiple disputes arising from related agreements.

(4) Consolidation

Tribunals will also have broader powers to order consolidation or concurrent conduct of arbitrations While consolidation provisions were included in the 2014 Arbitration Rules, the 2020 Rules clarify that, upon the application of a party, the Tribunal (subject to the LCIA Court’s approval) or, depending on the circumstances, the LCIA Court, will have the power to consolidate arbitration proceedings. The Tribunal will, additionally, be able to order that two or more arbitrations, under the same or a compatible arbitration agreement, and between the same parties or arising out of the same or a series of related transaction(s), be conducted concurrently, where the same Tribunal is constituted in respect of each arbitration (Article 22A).

(5) The Use of Virtual Hearings

In line with the increased use of video technology, which has become the new normal for hearings and mediations during the COVID-19 pandemic, the 2020 Rules have been expressly updated in various places to explicitly permit the conduct of virtual procedural conferences and hearings (Articles 9.7; 14.3; 16.3; 19.2).

(6) Electronic communication

The 2020 Rules have endorsed the use of electronic communication as the primary form of communication for the conduct of arbitral proceedings. References to paper filings have been deleted, with the 2020 Rules removing all options to submit communications by registered post or courier services and requires that all communication be delivered by email or any other electronic means of communication. The LCIA reserves the power to order written/paper communications in the event a party is unable to receive electronic communication. (Article 4).

(7) Tribunal Secretaries

The 2020 Rules contain a new provision regarding Tribunal secretaries (Article 14A), specifying that a Tribunal may obtain assistance from a tribunal secretary, but that under no circumstances may the Tribunal delegate its decision-making function to that secretary (Article 14.8). A Tribunal may only obtain assistance from a secretary once he/she and the tasks to be performed have been approved by all parties (Article 14.10).

(8) Data Protection and Information Security

The 2020 Rules contain a new provision which explicitly addresses data protection considerations and information security measures (Article 30A). The Tribunal is required at an early stage to consider whether to adopt specific information security measures and measures to ensure that any personal information exchanged during the arbitration complies with the applicable data protection. The Tribunal (and the LCIA) may now issue directions addressing such measures which will be binding on the parties (and the Tribunal).

(9) Court assistance for interim measures

The updates to the rules also clarify that the parties can apply to court for interim measures that the tribunal would have power to award as well (Article 25). This change is aimed at avoiding arguments of the nature raised in Gerald Metals SA v Timis [2016] EWHC 2327 (Ch) that the jurisdiction of the court is limited in relation to interim measures that the tribunal cannot itself grant.

(10) Impartiality of arbitrators

It should be noted that the LCIA has not found it necessary to respond to the Court of Appeal’s decision in Halliburton v Chubb [2018] EWCA Civ 817 on arbitrators’ disclosures and apparent bias. In this respect, we await the Supreme Court’s decision in Halliburton that is likely to have significant implications for English-seated arbitrations. The core issues before the Supreme Court are: (i) when should an arbitrator disclose circumstances which may give rise to justifiable doubts as to his/her impartiality and (ii) what are the consequences of failure to do so.

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Craig Deuchrass

Senior Associate

craig.deuchrass@collyerbristow.com