New LCIA Arbitration Rules due to be finalised shortly
Locations
The current LCIA Arbitration Rules were published in 1998, and have been in force for over 15 years without significant revision. The Drafting Committee of the LCIA Court has recently released a "final draft" of a new version of the rules ("Draft Rules"), for consideration at the LCIA's symposium at Tylney Hall, UK on 9-11 May 2014. The new rules are likely to come into force soon afterwards.
The LCIA is seeking to bring its rules up to date with arbitration practice and procedure, in order to keep them relevant and fresh for parties and practitioners. The Draft Rules focus on several areas including default seat, emergency arbitrator procedure, use of modern technology, efficiency of procedure and award, conduct of parties and multiple party arbitration. We set out below some of the most significant proposed amendments. References to Articles are to articles in the Draft Rules.
Emergency Arbitrator
This has been a much-debated topic in the last couple of years, during which time other arbitration institutions (including ICC and SIAC) have introduced emergency arbitrator procedures. The Draft Rules include an Article 9B that contains a similar emergency procedure, although the article is in parentheses, which suggests that the LCIA is undecided on this issue. This may be because the LCIA rules already include provision for the expedited formation of the tribunal, which is set out at Article 9C. It may be that the LCIA does not consider that it requires both procedures.
Arbitration Agreement and Default Seat
There has been recent case law dispute about the relevant law of an arbitration agreement, and the Draft Rules seek to simplify the position for LCIA arbitrations. The preamble to the Draft Rules expressly sets out that "Arbitration Agreement" includes not just the agreement of the parties to submit a dispute to LCIA arbitration but also the LCIA Rules themselves. Further, Article 16.4 expressly provides that the law of the Arbitration Agreement and the arbitration shall be the law of the seat of the arbitration.
The Draft Rules keep the default position that, in the absence of agreement by the parties, the seat of the arbitration shall be London, England. However Article 16.2 provides that this default position applies up to the formation of the Tribunal; thereafter, the Tribunal may order that a different seat is more appropriate, after seeking the views of the parties.
Timing Issues
Time periods have been altered slightly to coincide with weeks rather than calendar dates, which should assist with the reckoning of such time periods. Key time periods to note are that the time for the appointment of the Tribunal has been adjusted from 30 days to 35 days, whereas the time period for filing the Response has gone from 30 days to 28 days.
Efficiency of process
The Draft Rules are keen to encourage the efficient running of arbitrations and rendering of awards. Arbitral candidates must now include in their declarations a statement that they are "ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious conduct of the arbitration" (Article 5.4).
The Tribunal is required to seek to make its award "as soon as reasonably possible following the last submission from the parties", and notify the parties of (a) the proposed timetable, and (b) the adequate time it has set aside for doing so (Article 15.10).
Modern Approach to Technology
The Draft Rules reflect the now widespread use of e-mail for communications. In particular, the Draft Rules include non-mandatory provisions allowing for the submission of the Request and Response in electronic format (Articles 1.2 and 2.2). In addition, the Draft Rules allow the optional use of a standard electronic on-line form for the Request and Response (Articles 1.3 and 2.3).
Party representatives – status and conduct
There is a significant proposed modification to the status of those who qualify to act as party representatives. Parties currently have the right to be represented by "legal practitioners or any other representatives", which includes non-lawyers. However, this is modified in the Draft Rules (Article 18.1) to "authorised legal practitioners appearing by name".
The Draft Rules propose the inclusion of an Annex which sets out general guidelines on the standard of conduct expected by the parties' legal representatives. Given that representatives are drawn from around the world, the aim seems to be to set out a basic code to which all representatives agree to adhere, although the guidelines will remain subject to any mandatory regulatory rules applicable to each representative. The Tribunal has express power to determine whether the guidelines have been violated and take action as it sees appropriate (Article 18.6).
In an effort to reduce the potential for conflict issues, parties must now notify all other parties, the Tribunal and the registrar if they propose any changes to or additions to the legal representatives. And such changes are subject to the Tribunal's approval, which may be withheld if the changes could compromise the composition of the Tribunal or the finality of the award (Article 18.3 & 18.4).
Arbitrator challenges
A party wishing to challenge an arbitrator must do so within 14 days of their appointment and/or the event giving rise to the ground of challenge, and give reasons for the challenge (Article 10.3). And the Tribunal has express power to consider the conduct of the parties when determining costs, for example parties may face reduced or adverse costs awards if they have contributed to "undue delay and unnecessary expense" (Article 28.4).
Multiple parties
In response to the increasing complexity of arbitrations, provision has been made for multi-party arbitrations (Articles 1.5 and 2.5). The Draft Rules also give the Tribunal the right to join third parties where there is consent from the applicant and third party (Article 22.1(viii)), and to consolidate arbitrations where there is consent from all parties (Article 22.1(ix)).
In due course we shall confirm the final form of the new rules as and when they are adopted, and inform you of the date they will come into force.