The modernization of the LCIA rules

The LCIA have announced a long-awaited update to the LCIA Arbitration Rules.  Updates will also be made to the LCIA Schedule of Costs, LCIA Mediation Rules and Schedule of Mediation Costs. The new rules will take effect on 1 October 2020 and will apply to proceedings commenced after that date. In this article our Head of Arbitration, Jenny Lau, assisted by Mariya Lazarova, considers some of the most notable changes to the Arbitration Rules.

 

  1. Composite Requests and Consolidation – Article 1.2 & Article 22.7

 

Perhaps one of the most welcome changes to be implemented by the new rules is the clarification (and simplification) of the procedural issue arising from the decision in A v B [2017] EWHC 3417 (Comm). The risk and ambiguity of commencing multiple proceedings with a single Request has been the source of jurisdictional challenges, case management complexities, consolidation applications and higher costs.

 

Under the new rules, a claimant will be able to commence more than one arbitration against one or more respondents and under one or more Arbitration Agreements by serving a single “Composite Request”. The Composite Request must, however, comply with the requirements of Article 1.1 to the satisfaction of the LCIA Court in respect of each arbitration. While this is a marked improvement, the caveat is that “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”. The Arbitral Tribunal will continue to have the power to consolidate proceedings, but this power will be expanded so that the Arbitral Tribunal may also order that two or more arbitrations be conducted concurrently (Article 22.7(iii)).

 

A new Article 22.8 will give the LCIA Court the power to order the consolidation of two or more arbitrations provided that certain conditions are satisfied and no Arbitral Tribunal has been formed for any of the arbitrations to be consolidated.

 

  1. Early Determination and other Case Management Powers – Article 14.6 & Article 22.1

 

The Arbitral Tribunal has always had a wide discretion and powers, however, the issue of expedited and summary-judgment-like proceedings were not directly addressed under the 2014 LCIA Rules. The new rules will make it clear that the Tribunal can “determine that any claim, defence, counterclaim […] 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”)”. The new rules also seek to define the Tribunal’s wide discretion with express references to its powers to restrict pleadings and witness testimony, and adopt technology to increase the efficiency of the process.

 

  1. Costs

 

The new rules will increase the Registration Fee from £1,750 to £1,950, and the new maximum hourly rate that can be charged by the LCIA arbitrators will rise to £500 to recognise that the LCIA “accommodates demands of users in complex cases”.

 

  1. Tribunal Secretaries – Article 14A, Article 14.10(i), Article 14.11

 

The new rules will also clarify the role of Tribunal Secretaries, who may assist the Tribunal once they have been approved by all parties. The parties can agree the tasks that may be carried out by the secretary, but the Tribunal cannot delegate its decision-making function to the secretary and tasks are carried out under the Tribunal’s supervision.

 

  1. Compliance and Data Protection – Article 30A & Article 24A

 

The new rules will contain provisions dealing with data processing and protection, cybersecurity, as well as compliance with measures against “prohibited activity” such as money laundering, fraud and tax evasion.

 

  1. Technology

Whilst e-filing and service by email is already fairly commonplace in LCIA arbitration proceedings, the new rules will contain increased emphasis on electronic submissions, e-signing of Awards, and specific provisions around service by email. An amended Article 19.2 will refer to hearings taking place virtually by videoconference or “other communications technology”.

 

Bottom line

 

The updates and clarifications in the new LCIA rules are both welcome and timely, and it is clear that the changes will further the LCIA’s intention to provide a “modern” and “user-friendly” approach of resolving disputes.

 

*This article is not intended to give any legal advice or to give rise to a client-solicitor relationship. It has been prepared for information purposes only. If you require legal assistance on arbitration and/or litigation matters, please contact iLaw’s Head of Arbitration, Jenny Lau at jenny.lau@ilaw.co.uk