New LCIA Arbitration Rules effective 1 October 2014

The London Court of International Arbitration (LCIA) has published its new Arbitration Rules. The new Rules shall apply to arbitrations commenced after 1 October 2014.

The new Rules are intended to ensure a more efficient, expeditious and fair process. As other major global arbitral institutions that have recently changed their rules, the LCIA introduces in its new Rules provisions on emergency arbitrator and consolidation of two or more arbitrations. The new Rules reflect the arbitration community’s increasing focus on self-regulating the ethical conduct of the process. In this regard, the new rules introduce provisions and general guidelines on the conduct of legal representatives and parties. The general guidelines for the parties’ legal representatives reflect similar guidelines issued by the International Bar Association in 2013. Finally, a number of new provisions codify existing arbitral practice.

The notable changes in the new Rules are:

• confirmation that reference in the arbitration agreement to arbitration under the rules of or by the “London Court of Arbitration” or the “London Court” is a valid reference to the LCIA Rules;
• parties may use an on-line standard electronic form for the drafting of the Request for Arbitration and the Response;
• a temporary sole arbitrator may be appointed to conduct emergency proceedings before the formation or expedited formation of the Arbitral Tribunal. The emergency arbitrator shall decide the claim for emergency relief no later than 14 days following his or her appointment. The order or award of the emergency arbitrator may subsequently be confirmed, varied, discharged or revoked, in whole or in part, by the Arbitral Tribunal. The provisions are not an alternative to or substitute for the exercise of a party’s right to apply to a state court or other legal authority for any interim or conservatory measures before the formation of the Arbitral Tribunal. The provisions shall not apply if the parties (i) concluded their arbitration agreement before 1 October 2014 and have not agreed to ‘opt in’ to the emergency relief provisions; or (ii) agree in writing at any time to ‘opt out’ of such new provisions;
• before appointment, the proposed arbitrators are required to state in writing if they are “ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious and efficient conduct of the arbitration”;
• each party shall ensure that its legal representatives agree to comply with the general guidelines appended to the LCIA Rules. If the legal representative has violated the general guidelines the Arbitral Tribunal may issue (i) a written reprimand; (ii) a written caution as to future conduct in the arbitration; and (iii) any other measure necessary to fulfil within the arbitration the general duties of the Arbitral Tribunal set out in the LCIA Rules;
• the formation of the Arbitral Tribunal shall not be impeded by any controversy between the parties relating to the sufficiency of the Request or the Response;
• following the formation of the Arbitral Tribunal a change or addition by a party to its legal representatives shall be the subject to the approval of the Arbitral Tribunal;
• confirmation that the LCIA Court’s decision on the challenge of an arbitrator shall be made in writing, with reasons, in line with its practice adopted following an LCIA Court decision in 2006;
• the parties and the Arbitral Tribunal are “encouraged to make contact” in respect of the conduct of the proceedings no later than 21 days from the receipt of the LCIA’s notification of the formation of the Arbitral Tribunal;
• confirmation that the Arbitral Tribunal shall have the widest discretion to discharge its general duties, subject to such mandatory law(s) or rules of law as the Arbitral Tribunal may apply;
• detailed provisions on consolidation: (1) the Arbitral Tribunal may consolidate two or more arbitrations into a single arbitration (i) subject to the approval of the LCIA Court and the parties’ agreement in writing; or (ii) subject to the approval of the LCIA Court if the arbitration agreement(s) between the same disputing parties is(are) identical or compatible and no arbitral tribunal has yet been formed by the LCIA Court for the other arbitration(s) or, if already formed, such tribunal(s) is(are) composed of the same arbitrators; and (2) if no arbitral tribunal has yet been formed by the LCIA Court for any of the arbitrations to be consolidated, the LCIA Court may consolidate two or more arbitrations subject to the LCIA Rules if such arbitrations are commenced under the same arbitration agreement between the same disputing parties;
• after the formation of the Arbitral Tribunal, a party may apply to a state court or other legal authority for interim or conservatory measures only in exceptional cases and with the Arbitral Tribunal’s authorisation. The parties shall not apply to any state court or other legal authority for any order for security for the legal costs or the arbitration costs;
• following the last submission from the parties, the Arbitral Tribunal shall provide to the parties and the LCIA a timetable for the making of the award. An Arbitral Tribunal made up of more than one arbitrator shall set aside adequate time for deliberations as soon as possible after the last submission and notify the parties of the time it has set aside;
• confirmation that the Arbitral Tribunal may decide to order compliance with any legal obligation, payment of compensation for breach of any legal obligations and specific performance of any agreement (including any arbitration agreement or any contract relating to land);
• the correction of an award shall be an available remedy also if there is any ambiguity in the award;
• confirmation that in apportioning the legal costs and the arbitration costs, the Arbitral Tribunal may also take into account “the parties’ conduct in the arbitration, including any co-operation in facilitating the proceedings as to time and costs and any non-cooperation resulting in undue delay and unnecessary expense”;
• requirement that in all matters not expressly provided in the arbitration agreement, including the LCIA Rules, the LCIA Court, the LCIA, the Registrar, the Arbitral Tribunal and each of the parties act at all times in good faith.

The general guidelines for the parties’ legal representatives, appended to the new Rules, prohibit the legal representative from:

• engaging in activities intended to unfairly to obstruct the arbitration or to jeopardise the finality of any award, including repeated challenges to an arbitrator’s appointment or to the jurisdiction or authority of the Arbitral Tribunal known to be unfounded by the legal representative;
• knowingly making any false statement to the Arbitral Tribunal or the LCIA Court;
• procuring or assisting in the preparation of or relying upon any false evidence presented to the Arbitral Tribunal or the LCIA Court;
• knowingly concealing or assisting in the concealment of any documents (or any part thereof) which is ordered to be produced by the Arbitral Tribunal;
• deliberately initiating or attempting to initiate with any member of the Arbitral Tribunal or the LCIA Court (excluding the Registrar) any unilateral contract relating to the arbitration or the parties’ dispute, which has not been disclosed in writing prior to or shortly after the time of such contact.

The new Rules maintain the default position of the LCIA to nominate and appoint all three arbitrators in the event the parties do not agree in their arbitration agreement or following the commencement of the arbitration that each has a right to nominate an arbitrator.

The new Rules bring LCIA arbitrations up-to-date with the latest developments in the practice and reflect a growing drive by the international legal community to streamline the arbitral process to better respond to the demands of its users.

The new Rules are available on the LCIA website at www.lcia.org. The IBA Guidelines on Party Representation in International Arbitration are available here.