The LCIA has recently announced the adoption of new rules. The new LCIA Arbitration Rules will come into effect on 1 October 2014 and may be applied to any arbitration commenced after that date. They will replace the rules that have been in force since 1998.
As a preliminary note, it shall be remarked that the adoption of the new UNCITRAL and ICC rules in 2010 and 2012 respectively, has influenced this update in the LCIA Arbitration Rules.
Notable changes in the rules are intended to make the arbitration procedure more efficient and effective. For instance, the rules include provisions on the conduct of legal representatives and parties, the joinder of proceedings, cross claims and an emergency arbitrator provision.
Taking an innovative approach, as previously remarked, the rules include provisions establishing ethical guidelines for counsels. They are included in Art 18 and under an Annex to the main body of the rules titled “General Guidelines for the Parties’ Legal Representatives”. Interestingly, these ethical guidelines will have to be followed by all counsels that act in arbitrations under the new LCIA rules. Likewise, party representation will be required to “not engage in activities intended unfairly to obstruct the arbitration or to jeopardise the finality of the award”. In particular the rules underline that counsels must disregard repeated jurisdictional challenges that they know to be unfounded. Furthermore, counsels will be forbidden from making false statements, relying upon false evidence and engaging in ex parte contact with arbitrators relating to the arbitration. The rules empower the arbitral tribunal to sanction such behaviors. By this, the LCIA is the first arbitral institution that manifestly punishes certain counsel behaviors during the arbitral proceeding.
On another note, the LCIA Court may revoke arbitrators’ appointments if they fail to undertake their duties in a timely, efficient and expeditious way. Pursuant to Art 10, arbitrators must conduct or participate in the arbitration not only with reasonable diligence, but also with reasonable efficiency and industry.
Under the efficiency sought in terms of saving time, parties and the tribunal shall make contact as soon as possible and no later than 21 days from the notification of the formation of the tribunal. Additionally, another key procedural change intended to improve the speed is that communications shall take place between the tribunal and the parties (copying the Registrar), rather than through the Registrar as under the current rules.
Noteworthy, the rules introduce the cross claim concept, as a counter claim by a respondent against a claimant and between respondents.
The rules include a default law for the governing law of the arbitration agreement. Pursuant to Art 16(4) for cases in which parties have failed to agree on the law applicable to the arbitration agreement, the default rule establishes that the governing law shall be the law applicable at the seat of arbitration. This has led to much debate but it seems that the dispute is finally settled.
Finally, it shall be noted that the rules remain silent on whether the arbitration shall be administered by the LCIA if parties have agreed to the mentioned rules. By contrast, Art 6(2) of the ICC Rules provides that if the disputing parties agree on the ICC Rules the proceeding shall be administered by the ICC.
Overall, the rules seem an interesting move to save costs and increase expediency in the LCIA arbitration proceedings. However, we will have to wait and see how the international arbitration community welcomes them. In the meantime, the rules are now available at the LCIA website at www.lcia.org.