The New Arbitration Rules of the London Court of International Arbitration (LCIA)

On 1 October 2014, the new London Court of International Arbitration Rules (“LCIA Rules”) came into effect.

The new LCIA Rules follow the trend set by other institutions, such as the HKIAC and ICC, to make the arbitral process more efficient. This article provides an overview of the key changes.

Consolidation of arbitrations (Articles 22.1(ix) and (x))

New provisions on consolidation have been introduced as part of the arbitrators’ additional powers. Arbitrators now have the power, upon the application of any party and after giving the parties a reasonable opportunity to state their views and upon such terms as the Arbitral Tribunal may decide, to order the consolidation of the arbitration:  

• with one or more other arbitrations into a single arbitration subject to the LCIA Rules, where all the parties to the arbitrations to be consolidated so agree in writing; or  
• with one or more other arbitrations subject to the LCIA Rules commenced under the same arbitration agreement or any compatible arbitration agreement(s) between the same parties, provided that no arbitral tribunal has yet been formed by the LCIA Court for such other arbitration(s) or, if already formed, that such tribunal(s) is(are) composed of the same arbitrators.

In either case, consolidation requires approval of the LCIA Court.

Notably, the powers to consolidate under the LCIA Rules are more restrictive than those under the HKIAC Rules, which also allow consolidation where the parties are not identical.

Emergency Arbitrator (Articles 9.4 to 9.14)

Following HKIAC, ICC and SIAC, the LCIA Rules now provide for the possibility of appointing an emergency arbitrator.

The new provisions allow a party to apply to the LCIA Court for the immediate appointment of a temporary sole, arbitrator to conduct emergency proceedings, pending the formation or expedited formation of the arbitral tribunal.

The Emergency Arbitrator must decide the claim for emergency relief as soon as possible, but no later than 14 days following the Emergency Arbitrator’s appointment. This deadline may only be extended by the LCIA Court in exceptional circumstances.

The Emergency Arbitrator is not required to hold any hearing with the parties and may decide the claim for emergency relief on available documentation only.

Any order or award of the Emergency Arbitrator (apart from any order adjourning to the arbitral tribunal, when formed, any part of the claim for emergency relief) may be confirmed, varied, discharged or revoked, in whole or in part, by order or award made by the arbitral tribunal upon application by any party or upon its own initiative.

The Emergency Arbitrator provisions do not apply where the parties have:  

• concluded their arbitration agreement before 1 October 2014 and have not agreed in writing to “opt in”; or  
• the parties have agreed in writing at any time to ‘opt out’ of the provisions.

General Guidelines for the Parties’ Legal Representatives (Annex to the LCIA Rules)
The LCIA Rules have introduced, in an annex, guidelines for the parties’ legal representatives appearing by name within the arbitration, which are intended to promote the good and equal conduct of the legal representatives.

Compliance with these guidelines is compulsory by virtue of Article 18.5, which places an obligation on the parties to ensure that their legal representatives have agreed to comply with the general guidelines, as a condition of such representation, and, in permitting any legal representative so to appear, a party thereby represents that the legal representative has agreed to such compliance.

The guidelines prohibit, activities intended to unfairly obstruct the arbitration, jeopardise the finality of any award, knowingly make any false statement or rely on any false evidence.

Article 18 of the LCIA Rules sets out additional provisions on any intended change or addition by a party of its legal representatives and the arbitral tribunal’s powers regarding complaints against a party’s legal representative, as follows:-

• Any intended change or addition of legal representative after formation of the tribunal must be promptly notified in writing and will only become effective in the arbitration if approved by the arbitral tribunal;
• The tribunal may withhold approval where the change or addition could compromise the composition of the arbitral tribunal or the finality of any award (on the grounds of possible conflict or other like impediment).
• In the event of a complaint by a party or the tribunal against a legal representative, the tribunal may decide whether or not the legal representative has violated the general guidelines and, if so, order a written reprimand and/or written caution as to future conduct in the arbitration and/or any other measure necessary to fulfil within the arbitration the general duties required of the tribunal.

Of considerable practical relevance in this context will be Article 28, which expressly allows the tribunal, when making its decision on costs, to take into account the parties’ conduct in the arbitration, including any non-co-operation resulting in undue delay and unnecessary expense.

Other revisions
Other revisions of note, include:

Arbitration agreement: The LICA Rules expressly provide that the law governing the arbitration agreement shall be the law applicable at the seat of the arbitration, unless and to the extent the parties have agreed in writing on the application of other laws or rules of law and such agreement is not prohibited by the law applicable at the arbitral seat (Article 16.4). Only recently, the HKIAC, has included in its model clause specific wording to prompt parties to consider designating an appropriate law governing the arbitration agreement. Express agreement on the law governing the arbitration agreement is desirable due to uncertainties that have arisen in recent cases as to the applicable governing law.

Seat: Article 16.2 provides for London as a default arbitral seat, absent any agreement on the seat between the parties. Upon its appointment, the arbitral tribunal may, however, order that another seat is more appropriate.

Electronic submissions: The LICA Rules now allow the parties to submit to the LCIA in electronic form (as e-mail attachments) the Request for Arbitration, the Response, applications for expedited formation of the arbitral tribunal, applications for expedited appointment of a replacement arbitrator, and applications for the appointment of an Emergency Arbitrator.

Arbitrator availability: arbitrator candidates are now required to confirm in writing, in addition to their statement of impartiality and independence, that they are ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious and efficient conduct of the arbitration (Article 5.4).

Conduct of proceedings: the LCIA Rules encourage parties and the arbitral tribunal to make contact (whether by a hearing in person, telephone conference-call, video conference or exchange of correspondence) as soon as practicable, but no later than 21 days from receipt of the LCIA Registrar’s written notification of the formation of the arbitral tribunal (Article 14.1).

Timing of award: although the LCIA Rules do not set out a specific time limit for the making of the award (as is, for instance, the case under the ICC Rules), the arbitral tribunal is now under an express obligation to seek to make its final award “as soon as reasonably possible”, following the last written or oral submission from the parties, in accordance with a timetable notified to the parties and the LCIA Registrar as soon as practicable (Article 15.10).

主要負責人

Richard Hudson (夏偉卓)

合夥人 | 訴訟與爭議解決

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