The London Court of International Arbitration (LCIA) updated its LCIA Arbitration Rules and LCIA Mediation Rules on 11 August 2020. The new rules have prioritized the use of technology in dispute resolution due to acceleration in mediation and arbitration during the COVID-19 pandemic. It also caters to the user's need for a modernized arbitration and mediation processes. The 2020 Rules introduce a number of changes reflecting the best practice of LCIA tribunals to date, as well as bringing the LCIA Arbitration Rules in line with modern international arbitration trends.
Some significant changes to the rules have been outlined below:
1. Early Determination
The LCIA Rules now provide an express provision for ‘Early Determination’ under Article 22.1 (viii). This gives the arbitrators the power to expedite the proceedings if they find that a particular application is either manifestly outside of the jurisdiction of the Arbitral Tribunal, inadmissible, or manifestly without merit. This brings the LCIA in line with the general trend which makes provision for early determination of claims such as the SIAC and HKIAC. However, the LCIA Rules in this context are not elaborate and give more discretion to the tribunals in order to establish the procedure for considering such applications.
2. Technological upgrades
The LCIA Rules have updated from its conventional means owing to the global COVID-19 outbreak. “While the pandemic did not necessitate any change of direction or focus, it allowed the LCIA to address explicitly some changes in recent good practice, notably the increased use of virtual hearings and the primacy of electronic communication across the board.”[1]
Virtual hearings: Even though the 2014 LCIA Rules did provide for a possibility of having virtual hearings, the 2020 Rules have expressly provided for the same under Article 19.2.
E-filing of requests: Article 4.1 of the 2020 Rules state that the request for arbitration as well as the response to it shall be submitted either through email or the LCIA’s e-filing system. In case the parties need to do this on paper, prior written approval of the LCIA Registrar is required.
E-awards: The 2020 Rules also make way for signing for awards electronically. This is done unless the parties or LCIA directs otherwise. “For example, a departure from this default provision could be envisaged when the formalities at the seat of arbitration so require, or where enforcement of the award will be sought in a jurisdiction where there is a risk that courts would not accept a copy of an e-award as a “duly authenticated original award” in the meaning of Article IV(1)(a) of the New York Convention.”[2]
3. Consolidation, Composite Requests, Concurrent conduct of arbitration
Another significant addition is the broadened power of the LCIA Court and the Arbitral Tribunal to order consolidation and concurrent conduct of arbitrations under Article 22A of the 2020 Rules.
The 2014 LCIA Rules allowed for the consolidation of several arbitrations into one in cases, (i) where all the parties to the arbitrations to be consolidated so agree in writing; or (ii) where arbitrations were commenced under the same arbitration agreement or any compatible arbitration agreement(s) between the same disputing parties, provided that no tribunal had yet been formed for such other arbitration(s) or, if already formed, that such tribunal(s) was composed of the same arbitrators. The LCIA Court had similar powers to consolidate arbitrations where no tribunal had yet been appointed.
Under Article 22.7 (ii) the power of LCIA broadens as compared to the 2014 Rules. It states that “the consolidation of the arbitration with one or more other arbitrations subject to the LCIA Rules and commenced under the same arbitration agreement or any compatible arbitration agreement(s) and either between the same disputing parties or arising out of the same transaction or series of related transactions, provided that no arbitral tribunal has yet been formed by the LCIA Court for such other arbitration(s) or, if already formed, that such arbitral tribunal(s) is(are) composed of the same arbitrators”.[3] The latest version also expands to proceedings arising out of the same transaction or series of related transactions.
The 2020 Rules also allow for composite requests for arbitration which authorizes a party to commence a single proceeding where the disputes fall under multiple contracts. This composite request can be made along with a request for consolidation however, such consolidation will not be automatic. It will be determined by the tribunal and/or the LCIA Court.
Article 22.7 (iii) widens the ambit to order concurrent conduct of the proceedings. It states that “two or more arbitrations, subject to the LCIA Rules and commenced under the same arbitration agreement or any compatible arbitration agreement(s) and either between the same disputing parties or arising out of the same transaction or series of related transactions, shall be conducted concurrently where the same arbitral tribunal is constituted in respect of each arbitration.”[4] This change will help to prevent inconsistent arbitral awards and also reduce the duplication of work.
4. Additional Measures
In order to expedite the adjudicatory process, the 2020 Rules state that Arbitral Tribunals shall endeavor to make their final awards no later than three months following the last submission of the parties. This was not the case with the 2014 Rules where the timeline permitted a decision to be taken ‘as soon as reasonably possible’.
Further Article 14A is a provision referring to the role of a tribunal secretary. This signifies accommodation of a shift in the user preferences by the LCIA.
Additionally, the 2020 Rules address certain data protection (Article 30.A) and compliance (Article 24.A) issues that could arise in its practice. Such amendments will boost user confidence during LCIA arbitrations.
The 2020 Rules is a significant step towards revamping the existing model and enhance party autonomy. It indicates the efforts undertaken by LCIA to adapt to the new normal and provides a stable framework for the users.
[1] https://www.lcia.org/lcia-rules-update-2020.aspx
[2] http://arbitrationblog.kluwerarbitration.com/2020/08/13/the-lcia-publishes-its-2020-rules-a-light-touch-update-to-meet-modern-needs/?doing_wp_cron=1598809809.2116539478302001953125
[3] Article 22.7 (ii) LCIA Arbitration Rules, 2020
[4] Article 22.7 (iii) LCIA Arbitration Rules, 2020
