The latest amendments to the Arbitration Rules of the London Court of International Arbitration ("LCIA Rules, 2020") were released on 11 August 2020. The 2020 Rules have sought to further streamline the arbitration process by expressly delineating the powers of tribunals and the LCIA Court under various circumstances. Examples include the possibility of early dismissal, a wider power of consolidation, concurrent proceedings and express powers to expedite proceedings. Notably, the LCIA Schedule of Costs has also been revised.
Applicability of the Rules
The LCIA Rules, 2020 were unveiled on 11 August 2020. They took effect on 1 October 20201 and apply to arbitrations commenced from that date onwards.
The provision relating to Emergency Arbitration, however, will not apply to arbitration agreements concluded before 1 October 2014.
Article 14.4 read with 14.5 of the 2014 Rules accorded the Tribunal "the widest discretion" aimed towards "......avoiding unnecessary delay and expense, so as to provide a fair, efficient and expeditious means for the final resolution of the parties' dispute." Thus, the Tribunal's power of early dismissal of a claim was often regarded as implicit.
Article 22(viii)2 of the 2020 Rules makes the above power explicit. It allows arbitrators to expedite proceedings by making an "Early Determination" order when they decide that a particular application is either manifestly outside the jurisdiction of the Arbitral Tribunal, inadmissible or manifestly without merit.
Wider power of consolidation and concurrent proceedings
Under the 2014 Rules, the Tribunal's power to consolidate arbitrations (with the approval of the LCIA Court) was restricted to situations where - a) all the parties to the arbitrations to be consolidated so agreed in writing; or (b) 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 newly introduced Article 22A5 in the 2020 Rules contemplates a third situation in which consolidation may be ordered. Consolidation is now possible in case of arbitrations commenced under the same arbitration agreement or any compatible arbitration agreement(s) and arising out of the same transaction or series of related transactions - even if the disputing parties are not the same. Tribunals also have the power to order that such arbitrations shall be conducted concurrently where the same arbitral tribunal is constituted in respect of each arbitration.
The newly introduced Article 14A formalises the role of tribunal secretaries in an LCIA arbitration. This change incorporates guidance provided in its 2017 Guidance Note to Arbitrators.6 The provision makes it clear that parties have to agree to the use of tribunal secretaries and that tribunal members must not delegate decision-making powers. There is also clarity about the need for tribunal secretaries to disclose any conflicts of interest and also that the obligation of confidentiality under Article 30 applies to any tribunal secretary.
Increased use of technology
- The 2020 Rules provide for virtual or remote hearings in greater detail. Article 19.2 states that a hearing may take place in person, or virtually by conference call, videoconference or using other communications technology with participants in one or more geographical places (or in a combined form).
- The 2020 Rules mandate that the request for arbitration as well as the response shall be submitted only in electronic form.7 This marks a departure from the 2014 Rules which provided that the request for arbitration and response could be submitted in electronic form, in paper form or in both forms.
- Article 4.2 of the 2020 Rules stipulates that any written communication in relation to the arbitration shall be delivered by email or any other electronic means of communication. Alternate forms of communication can only be opted for upon prior written approval of the Tribunal or Registrar.
- Article 26.28 of the 2020 Rules expressly provides for the option of electronically-signed awards. This could be ordered unless the parties agree to the contrary or the Tribunal or LCIA Court directs otherwise. An example of a departure from the above provision could be where the law of the seat of arbitration requires so or if the law of the state of enforcement does not recognize an electronically-signed award as an authentic and original award.
Other provisions targeting increased efficiency
- Composite requests- Under the 2014 Rules, composite requests were not permitted. A party wishing to commence more than one arbitration was required to file separate requests for each and then have them consolidated. Article 1.29 of the 2020 Rules allows for composite requests of arbitration. However, it is important to note that each arbitration under the composite request shall proceed separately (unless the Tribunal or LCIA Court determines otherwise).
- The time period for formation of a tribunal has been reduced to 28 days10 from the previous period of 35 days mentioned in the 2014 Rules.
- Under the 2020 Rules,11 parties and tribunals are required to make contact within 21 days (as opposed to merely being 'encouraged' to make contact as provided in the 2014 Rules).
- Article 14.6 of the 2020 Rules expressly spells out certain steps the Tribunal can take to expedite the proceedings. These include (but are not limited to) limiting the length or content of, or dispensing with, any written statement, limiting the written and oral testimony of a witness, employing technology to enhance the efficiency of the arbitration or dispensing with a hearing, when appropriate.
- The above addition, though implicit in the "widest discretion" power present in the 2014 Rules, is an express recognition of the Tribunal's increased control over the proceedings.
- Article 15.1012 of the 2020 Rules introduces a strict three-month deadline from the last submission by the parties to issue a final award rather than merely "as soon as possible" as provided for in the 2014 Rules.
Data Protection measures
A new section dealing with Data Protection has been introduced under Article 30A. Any processing of personal data by the LCIA is subject to the applicable data protection legislation. The LCIA and the Arbitral Tribunal may issue directions addressing information security or data protection, which shall be binding on the parties, and in the case of those issued by the LCIA, also on the members of the Arbitral Tribunal. This makes the LCIA the first arbitral institution to explicitly provide for such safeguards in its rules.
Wider scope of confidentiality provisions
Article 30.1 of the 2014 Rules required parties to commit "to keep confidential all awards in the arbitration, together with all materials in the arbitration."
Under Article 30.113 of the 2020 Rules, the parties are now also obliged to seek the same undertaking of confidentiality from all those that are involved in the arbitration, including but not limited to any authorised representative, witness of fact, expert or service provider. This obligation also extends to the Tribunal, Tribunal secretary and any expert to the Tribunal.
Exclusive Jurisdiction of English Courts for LCIA-Related Disputes
The LCIA is the first arbitral institution to provide for a specific governing law clause to apply to its Rules. Article 16.5 of the 2020 Rules provides that notwithstanding the law applicable at the seat, the LCIA Rules shall be interpreted in accordance with the laws of England. Further, the 2020 Rules have also introduced Article 31.3 which gives exclusive jurisdiction to the courts of England and Wales to hear and decide any action, suit or proceedings arising between the parties and the LCIA, the LCIA Court, the LCIA Board, the Registrar, any arbitrator, tribunal secretary or expert for matters arising out of or in connection with an LCIA arbitration.
The LCIA's Schedule of Costs has been updated and reflects a 10-12 % increase when compared to the 2014 Schedule of Costs. Notable changes include an increase in the registration fee and Secretariat costs. More importantly, the maximum hourly rate to be charged by arbitrators has been increased to £500 from the earlier £450 amount. A detailed breakdown of changes in costs is set out at Schedule A, hereunder.
While the 2020 Rules cover a wide range of issues, improving overall efficiency appears to be the main focus of the amendments. This is evidenced by a move towards greater use of technology in arbitration proceedings as seen in the express recognition of virtual hearings and electronically-signed awards. Considering the "new normal" brought about by the Covid-19 pandemic, the above changes are a welcome step.
2 Article 22.1(viii) states "The Arbitral Tribunal shall have the power, upon the application of any party or (save for sub- paragraph (x) below) upon its own initiative, but in either case only after giving the parties a reasonable opportunity to state their views and upon such terms (as to costs and otherwise) as the Arbitral Tribunal may decide 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."
3 Rule 29 of the SIAC Rules, 2016.
4 Article 43 of the HKIAC Administered Arbitration Rules, 2018.
5 Article 22.7(iii) states "The Arbitral Tribunal shall have the power to order with the approval of the LCIA Court, upon the application of any party, after giving all affected parties a reasonable opportunity to state their views and upon such terms (as to costs and otherwise) as the Arbitral Tribunal may decide: 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."
6 Section 8, LCIA Notes for Arbitrators, available at https://www.lcia.org/adr-services/lcia-notes-for-arbitrators.aspx.
7 Article 4.1 states "The Claimant shall submit the Request under Article 1.3 and the Respondent the Response under Article 2.3 in electronic form, either by email or other electronic means including via any electronic filing system operated by the LCIA. Prior written approval should be sought from the Registrar, acting on behalf of the LCIA Court, to submit the Request or the Response by any alternative method."
8 Article 26.2 states ".Unless the parties agree otherwise, or the Arbitral Tribunal or LCIA Court directs otherwise, any award may be signed electronically and/or in counterparts and assembled into a single instrument."
9 Article 1.2 states "A Claimant wishing to commence more than one arbitration under the LCIA Rules (whether against one or more Respondents and under one or more Arbitration Agreements) may serve a composite Request in respect of all such arbitrations, provided that the requirements of Article 1.1 are complied with to the satisfaction of the LCIA Court in respect of each arbitration. In particular, in any composite Request the Claimant must identify separately the estimated monetary amount or value in dispute, the transaction(s) at issue and the claim advanced by the Claimant against any other party in each arbitration. Each arbitration so commenced shall proceed separately and in accordance with the LCIA Rules, subject to the LCIA Court or the Arbitral Tribunal determining otherwise."
10 Article 5.6 states "The LCIA Court shall appoint the Arbitral Tribunal promptly following delivery to the Registrar of the Response or, if no Response is received, promptly after 28 days from the Commencement Date (or such other lesser or greater period to be determined by the LCIA Court pursuant to Article 22.5)."
11 Article 14.3 states "The parties and the Arbitral Tribunal shall make contact (whether by a hearing in person or virtually by conference call, videoconference or using other communications technology or exchange of correspondence) as soon as practicable but no later than 21 days from receipt of the Registrar's written notification of the formation of the Arbitral Tribunal."
12 Article 15.10 states "In any event, the Arbitral Tribunal shall seek to make its final award as soon as reasonably possible and shall endeavour to do so no later than three months following the last submission from the parties (whether made orally or in writing), in accordance with a timetable notified to the parties and the Registrar as soon as practicable (if necessary, as revised and re-notified from time to time). When the Arbitral Tribunal (not being a sole arbitrator) establishes a time for what it contemplates shall be the last submission from the parties (whether written or oral), it shall set aside adequate time for deliberations (whether in person or otherwise) as soon as possible after that last submission and notify the parties of the time it has set aside."
13 Article 30.1 states "The parties undertake as a general principle to keep confidential all awards in the arbitration, together with all materials in the arbitration created for the purpose of the arbitration and all other documents produced by another party in the proceedings not otherwise in the public domain, save and to the extent that disclosure may be required of a party by legal duty, to protect or pursue a legal right, or to enforce or challenge an award in legal proceedings before a state court or other legal authority. The parties shall seek the same undertaking of confidentiality from all those that it involves in the arbitration, including but not limited to any authorised representative, witness of fact, expert or service provider."
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