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LCIA (2014)—arbitration under the LCIA Rules

CORONAVIRUS (COVID-19): Many arbitral organisations have responded to the coronavirus pandemic with
practical guidance and/or changes to their usual procedures and ways of working. For information on how
this content and relevant arbitration proceedings may be impacted, see Practice Note: Arbitral organisations
and coronavirus (COVID-19)—practical impact. For additional information, see: Coronavirus (COVID-19) and
arbitration—overview.
This Practice Note concerns London Court of International Arbitration (LCIA) arbitration proceedings pursu-
ant to the LCIA Arbitration Rules 2014 effective 1 October 2014 (the LCIA Rules). For practical guidance on
arbitration pursuant to the LCIA Rules 1998, the previous version, see the relevant Practice Notes here:
LCIA arbitration—overview.

References:
LCIA Rules 2014
The LCIA is a well-established, international arbitral institution and the second most prominent arbitration
institution in Europe (after the International Chamber of Commerce (ICC)). It is equipped to handle the full
range of disputes up to the largest, most complex international commercial arbitration proceedings. Most of
the arbitrations which the LCIA administers are commenced under the LCIA Rules but it also administers,
and provides other services, such as fundholding and acting as an appointing authority, in arbitrations under
ad hoc arbitration rules, notably the United Nations Commission on International Trade Law (UNCITRAL)
Arbitration Rules.

References:
LCIA guidance on fundholding and administering ad hoc arbitrations (also on security for costs and sums in
dispute, ie security for claims)
For information on the LCIA’s casework, see Practice Note: Arbitration statistics and surveys.
The LCIA—a three-tier organisation
The LCIA comprises:

• a not-for-profit company which:

◦ is limited by guarantee
◦ comprises a board made up of experienced, largely London-based arbitration practition-
ers
◦ is principally concerned with the operation and development of the LCIA’s business, and
◦ does not have an active role in case administration

• the LCIA Court which:

◦ is made up of up to 35 members appointed by the LCIA’s board (selected to provide and
maintain a balance of leading practitioners in commercial arbitration, from the major
trading areas of the world and of whom no more than six may be of UK nationality)
◦ is the final authority for the proper application of the LCIA Rules
◦ deals with the appointment of tribunals, the determination of challenges to arbitrators
and the control of costs
◦ may delegate its powers to the president of the LCIA Court, any vice president, honorary
vice president or former vice president or a division of three or more members appointed
by the president or any vice president (LCIA, art 3.1). As a general rule, administrative
decisions will be taken by the president or vice president save for the hearing of chal-
lenges under LCIA, art 10 which may be heard instead by a division or honorary or for-
mer vice president
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• the Secretariat which is:

◦ headed by the Registrar
◦ based at the International Dispute Resolution Centre in London, and
◦ responsible for the day-to-day administration of all disputes referred to the LCIA. The
Registrar and the Secretariat are involved in the administration of every arbitration sub-
mitted to the LCIA, correspondence with the Tribunal and the LCIA Court. All communi-
cations with the LCIA Court should be made through the Registrar (LCIA, art 3.3)

The director-general (the chief executive officer of the LCIA) deals with the day-to-day responsibility of the
conduct of the business of the LCIA, and is the principal point of contact between the institution and its board
and the LCIA Court.
In 2017, the LCIA appointed its first head of marketing to assist the institution with its development.

The LCIA Rules govern the arbitral proceedings

The LCIA Rules are effective as of 1 October 2014 and, replaced the 1998 version of the LCIA Rules which
were introduced in light of the Arbitration Act 1996. The LCIA Rules are modern, clear and flexible.

References:
LCIA Rules 2014

Commencing an LCIA arbitration

The party requesting the arbitration (the claimant) commences an LCIA arbitration by delivering a written
Request for Arbitration (the Request) to the Registrar of the LCIA Court (LCIA, art 1). The Request must con-
tain, or be accompanied by:

• the full names, postal addresses, email addresses, telephone and fax numbers of the claim-
ant(s) and, if known, the respondent(s)
• the names, postal and email addresses, telephone and facsimile, numbers of the parties' legal
representatives
• the full terms of the arbitration agreement (excepting the LCIA Rules) invoked by the claimant
to support its claim with a copy of the contract or other document containing the arbitration
clause and to which the claimant's claim relates
• a brief statement describing the nature and circumstances of the dispute, its estimated value,
the transaction(s) at issue and each claim advanced by the claimant against any party to the
arbitration
• a statement of any procedural matters agreed in writing between the parties or on which the
claimant wishes to make proposals (such as seat (LCIA, art 16), language (LCIA, art 17), num-
ber of arbitrators or their qualifications or nominations for arbitrators (LCIA, art 5–LCIA, art 7))
• if the arbitration agreement calls for a party nomination of arbitrators, the name, postal and
email address, telephone and fax numbers (if known) of the claimant's nominee
• confirmation that the registration fee (see below) has been or is being paid to the LCIA
• confirmation that copies of the Request (including all accompanying documents) have been or
are being simultaneously delivered to all other parties to the arbitration by one or more means
of delivery as identified in the confirmation, to be supported then or as soon as possible there-
after by documentary proof of actual delivery or, if impossible, of other effective form of notifica-
tion
The Request may be filed in electronic form (by email or online) or in paper form or both. If submitted in pa-
per form, additional copies must be supplied to the Registrar for each arbitrator to be appointed. The claim-
ant must also pay a non-refundable registration fee of £1,750 (plus VAT if applicable).
See Practice Note: LCIA (2014)—starting an arbitration.
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Respondent steps
Within 28 days of receipt of the Request by the Registrar, the respondent should file a written response (the
Response) and accompanying documents with the Registrar (LCIA, art 2). The Response should be in writ-
ing and contain, or be accompanied by:

• the respondent's and its legal representatives' full names and all contact details (including
postal and email addresses, telephone and fax numbers)
• confirmation or denial of all or part of the claims advanced by the claimant in the Request, in-
cluding the claimant's invocation of the arbitration agreement in support of its claim
• if not full confirmation of the claim, a brief statement summarising the nature and circumstances
of the dispute, its estimated monetary amount or value, the transaction at issue and the de-
fence advanced by the respondent
• indication of any cross-claim that will be advanced by the respondent against any party to the
arbitration
• a response to any statements contained in the Request (as required by LCIA, art 1.1(iv)) on
matters relating to the conduct of the arbitration, such as:
◦ seat
◦ language
◦ number of arbitrators
◦ qualification or identity of arbitrators
◦ any other procedural matter the parties have agreed in advance in writing or in respect
of which the respondent makes a proposal under the arbitration agreement

• if the arbitration agreement calls for party nomination of arbitrators, the name, postal and email
address, telephone and fax numbers (if known) of the respondent's nominee. Failure to do this
within time or at all will constitute an irrevocable waiver of the respondent's opportunity to nom-
inate an arbitrator (LCIA, art 2.4)
A respondent is not precluded from defending a claim or advancing a cross-claim merely by failing to deliver
a Response (LCIA, art 2.4).
It is possible for a respondent to apply for an extension of time for the filing of a Response (LCIA, arts 2.1
and 22.5). The LCIA Court may exercise its discretion in favour of an extension if, for example, there has
been a long delay between commencement of the arbitration and delivery of the Request to the respondent.
See Practice Note: LCIA (2014)—responding to a Request for Arbitration.

Forming the arbitral tribunal

The primary procedure under the LCIA Rules is that the LCIA Court will select and appoint the arbitral tribu-
nal. Subject to any agreement of the parties to the contrary (eg as to the nomination of arbitrators), the LCIA
Court will appoint the arbitral tribunal (the Tribunal) promptly after receipt of the Response by the Registrar
or, if no Response is filed, after the expiry of 35 days following receipt of the Request by the Registrar (LCIA,
art 5.6). The LCIA Court may proceed with the formation of the Tribunal even if the Request is incomplete or
the Response is missing, late or incomplete (LCIA, art 5.1).
A sole arbitrator will be appointed unless the parties have otherwise agreed in writing, or unless the LCIA
Court determines that in view of all the circumstances of the case, a three-member Tribunal is appropriate
(LCIA, art 5.8).
The LCIA draws on a database of arbitrators from a number of disciplines and backgrounds. When required
to select an arbitrator, the LCIA takes into account the nature of the transaction and dispute, as well as the
number, nationality, location and languages of the parties (LCIA, art 6).
The parties may agree to each nominate an arbitrator of their choice in their Request/Response (as appro-
priate). The parties should check any timetable for nominations in their arbitration agreement: it may not cor-
respond to the timetable in the LCIA Rules but it will prevail. The LCIA Court will appoint the parties’ nomi-
nees (unless it deems the nominated arbitrator(s) unsuitable) and appoint a chairman (LCIA, art 5.7 and
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LCIA, art 7) who may have been selected by the parties’ nominees if the arbitration agreement provides for
this. The whole tribunal will be appointed by the LCIA Court (in practice by the president or a vice president)
at the same time.
LCIA, art 5.4 stipulates that every arbitrator must declare and retain their impartiality and independence of
the parties involved in the arbitration. Any breach of LCIA, art 5.4 may result in a challenge to the arbitrator
concerned, or an intervention by the LCIA Court to sanction or remove such an arbitrator.
Arbitrators assume a continuing duty to the LCIA Court to disclose any circumstances which might call into
question their impartiality or independence.
See Practice Note: LCIA (2014)—appointing the tribunal.

Conducting the LCIA arbitration proceedings

In practice, the Tribunal is effectively in charge of and manages the proceedings, subject to any agreements
between the parties (LCIA, art 14.5).

‘The tribunal shall have the widest discretion to discharge these general duties, subject to such mandatory law(s) or
rules of law as the Arbitral Tribunal may decide to be applicable.'

Its powers are extensive and include an ability to:

• instruct one or more experts to report to the Tribunal on specific issues (LCIA, art 21.1)
• allow a party to supplement, modify or amend a claim, defence, cross-claim, defence to cross-
claim, reply or any other written statement (LCIA, art 22.1(i))
• extend or abbreviate any time limit (LCIA, art 22.1(ii))
• conduct such enquiries as it considers necessary or expedient, including taking the initiative in
identifying the issues and ascertaining the relevant facts and the law(s) or rules of law applica-
ble to the arbitration and the merits of the parties' dispute (LCIA, art 22.1(iii))
• order any party to make any documents, goods, samples, property, site or thing under its con-
trol available for inspection by the Tribunal, any expert or party (LCIA, art 22.1(iv))
• order any party to produce for inspection, documents or copies of documents in their posses-
sion, custody or power which the Tribunal decides to be relevant (LCIA, art 22.1(v))
• decide whether or not to apply any strict rules of evidence (or any other rules) as to the admis-
sibility, relevance or weight of any material tendered by a party on any issue of fact or expert
opinion, and to determine the time, manner and form in which such material should be ex-
changed between the parties and presented to the Tribunal (LCIA, art 22.1(vi))
• to order compliance with any legal obligation, payment of compensation for breach of any legal
obligation and specific performance of any agreement (including any arbitration agreement or
any contract relating to land) (LCIA, art 22.1(vii))
• allow one or more third persons to be joined in the arbitration as a party, provided any such
third person and the applicant party have consented thereto in writing and thereafter make a
single final award or separate awards in respect of all parties implicated in the arbitration (LCIA,
art 22.1(viii))
• with the approval of the LCIA Court, to order the consolidation of the arbitration with one or
more other arbitrations into a single arbitration subject to the LCIA Rules 2014 where all the
parties to the arbitrations to be consolidated so agree in writing (LCIA, art 22.1(ix))
• order, with the approval of the LCIA Court, consolidation of the arbitration with one or more
other arbitrations subject to the LCIA Rules 2014 commenced under the same arbitration
agreement or any compatible arbitration agreement(s) between the same disputing parties,
provided that no arbitral tribunal has yet been formed by the LCIA Court for such other arbitra-
tion(s) or, if already formed, that such Tribunal(s) is(are) composed of the same arbitrators
(LCIA, art 22.1(x)) (Note that the parties' consent is not required)
• discontinue the arbitration if it appears to the Tribunal that the arbitration has been abandoned
(LCIA, art 22.1(xi))
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See Practice Note: LCIA (2014)—tribunal's duties and powers.

In terms of the shape of the proceedings, although the parties and the Tribunal may decide to do things dif-
ferently, the LCIA Rules provide a broad framework for the exchange of detailed submissions and witness
evidence. In particular:

• LCIA, art 15 provides that:

◦ within 28 days of receipt of the Registrar's written notification of the Tribunal's formation,
the claimant will deliver to the Tribunal and all other parties either its election to have the
request treated as its Statement of Case or its written Statement of Case, setting out in
sufficient detail all the relevant facts and legal submissions on which it relies together
with the relief claimed
◦ within 28 days of receipt of the claimant's Statement of Case or written notice from the
claimant that it elects to treat the Request as its Statement of Case, the respondent shall
send to the Tribunal and all other parties either its written election to have its Response
treated as its Statement of Defence and (if applicable) its Statement of Cross-claim, or
its written Statement of Defence and (if applicable) Statement of Cross-claim, setting out
in sufficient detail the relevant facts and legal submissions on which it relies together
with the relief claimed against all other parties
◦ within 28 days of receipt of the Statement of Defence and (if applicable) Statement of
Cross-claim or election to treat its Response as its Statement of Defence, the claimant
will deliver to the Tribunal and all other parties a written Statement of Reply which,
where there are any cross-claims, shall also include a Statement of Defence to Cross-
claim in the same manner required for the Statement of Defence
◦ if the Response contains a Statement of Defence to Cross-claim, within 28 days of its
receipt, the respondent will deliver to the Tribunal and all other parties its written State-
ment of Reply to the Statement of Defence to Cross-claim

• where there are multiple parties, the Tribunal may apply additional directions (LCIA, art 15.6)—
see Practice Note: LCIA (2014)—multi-party arbitration
• LCIA, art 19 contains a number of provisions relating to hearings, which will be held should any
party express a desire to be heard orally before the Tribunal on the merits of the dispute. The
Tribunal will fix the date, time and physical place of any meetings and hearings and has the
fullest authority to establish time limits for those meetings and hearings. Note: unless the par-
ties have agreed to a documents-only arbitration, the English High Court has held that any par-
ty to an arbitration in which LCIA, art 19 applies has a right to a hearing before the tribunal at
any appropriate stage of the arbitration, and a failure to hold a hearing may amount to serious
irregularity under AA 1996, s 68. That ‘right’, however, is qualified by AA 1996, s 41(7)(c),
which permits a tribunal to proceed to an award on the papers in the event that a party fails to
comply with a peremptory order of the tribunal made under AA 1996, s 41(5) (T v V & W)—see
News Analysis: No serious irregularity in award on papers following non-compliance with per-
emptory order (T v V & W)

References:
T v V & W [2018] EWHC 1492 (Comm)
• LCIA, art 20 deals with the production of witness statements and witness evidence during hear-
ings—see Practice Note: LCIA (2014)—evidence—Witness and expert evidence

Confidentiality of arbitral proceedings

Unlike some institutional rules, the LCIA Rules expressly provide for confidentiality, stating that the ‘parties
undertake as a general principle to keep confidential all awards in their arbitration, together with all materials
in the arbitration created for the purpose of the arbitration and all other documents produced by another party
in the proceedings not otherwise in the public domain' (LCIA, art 30).
The LCIA Rules also make provision for the confidentiality of tribunal deliberations (LCIA, art 30.2).
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For more information, see Practice Note: Confidentiality under the arbitration rules of major arbitral institu-
tions and those of UNCITRAL.

Concluding the proceedings with an LCIA award

The Tribunal makes its award in writing and (unless the parties agree otherwise) must state the reasons up-
on which it is based. The award must also state the date when it is made and the seat of the arbitration and
must be signed by the Tribunal or those of its members assenting to it (LCIA, art 26).
A decision may be made by a majority or, if necessary, the presiding arbitrator (LCIA, art 26.5).
The LCIA Rules contain a provision designed to preclude any appeal of the award in domestic courts (sub-
ject to the relevant arbitration law in force in the seat of arbitration) (LCIA, art 26.8):

‘Every award shall be final and binding on the parties. The parties undertake to carry out any award immediately and
without any delay (subject only to Article 27); and the parties also waive irrevocably their right to any form of appeal,
review or recourse to any state court or other legal authority, insofar as such waiver shall not be prohibited under any
applicable law.’

LCIA, art 27 deals with the correction of awards and the production of additional awards on issues not de-
termined in any other award.
See Practice Note: LCIA (2014)—the award.

Paying the costs of arbitration proceedings

The LCIA Court may direct the parties, in such proportions as it thinks appropriate, to make one or more
payments to the LCIA on account of the costs of the arbitration (being the costs of the Tribunal and the costs
of the LCIA itself, and not including the parties’ own legal and other costs and expenses) (LCIA, art 24.1).
If a party fails to pay its share of any deposit, the LCIA Court may direct the other party or parties to effect a
substitute payment to allow the arbitration to proceed (LCIA, art 24.4).
The final costs of the arbitration are determined by the LCIA Court in accordance with the Schedule of Costs
published by the LCIA from time to time. As of 1 January 2014, there is a separate LCIA Schedule of Costs
for arbitrations conducted pursuant to the LCIA Rules (the LCIA Schedule of Costs—see News Analysis:
LCIA issues new Schedules of Costs). The current LCIA Schedule of Costs applies to all current and future
LCIA arbitration proceedings as from 1 October 2014. The parties are jointly and severally liable to the Tri-
bunal and the LCIA for those arbitration costs. In the event that one party fails to pay its share, the other(s)
will be liable.

References:
LCIA Schedule of Costs
The Tribunal’s final award typically records the costs of the arbitration, as approved by the LCIA Court and
sets out details of the parties’ own legal and other costs and expenses. The Tribunal is empowered to de-
termine the proportions in which the parties bear all or part of the costs of arbitration and the legal and other
costs and expenses (LCIA, art 28.2).
Unless otherwise agreed, the Tribunal must make its orders on both the arbitration and the legal costs ‘on
the general principle that costs should reflect the parties' relative success and failure in the award or arbitra-
tion or under different issues, except where it appears to the Arbitral Tribunal that in the circumstances the
application of such a general principle would be inappropriate under the Arbitration Agreement or otherwise
(LCIA, art 28.4).'
See Practice Note: LCIA (2014)—costs.

Duration and cost of an LCIA arbitration

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The LCIA's costs and duration data published in November 2015, and updated in October 2017, shows that
the median duration of an LCIA arbitration (the LCIA indicates that the median is a more useful metric than
the mean) is 16 months from the date of the Request to the date of the final award.

References:
LCIA Releases Costs and Duration Data
LCIA Releases Updated Costs and Duration Analysis
Helpfully, the released data has also analysed the cost of LCIA arbitration showing that the median cost
(which the LCIA suggests is more reliable than the mean cost) is $US 97,000. This is for arbitration costs
only—it does not include the parties' legal costs. See News Analyses: Counting the costs—LCIA releases
costs and duration data and The LCIA fights back: new costs and duration data 2013–2016.
Comparing the LCIA's costs to those of other institutions, the LCIA data shows that its costs are lower than
the estimated costs of the Singapore International Arbitration Centre (SIAC), the Hong Kong International
Arbitration Centre (HKIAC), the Stockholm Chamber of Commerce (SCC) and the International Chamber of
Commerce (ICC).
Cases with amounts in dispute under $US 1m are relatively swiftly resolved, with a median duration of 9
months, and over 70% decided within 12 months. For cases in that range, the median costs of arbitration are
$US 32,000, comprising $US 22,000 for the tribunal’s fees and $US 10,000 for the LCIA’s administrative
charges. They are on average 14% more expensive at the compared institutions. Cases with over $US 100m
in dispute are on average 225% more expensive at the compared institutions.
See the reports for the basis on which the data was calculated.

Additional key features of the LCIA Rules

Parties arbitrating pursuant to the LCIA Rules should also be aware of the following additional key features:

• the Tribunal's ability to join and consolidate multiple arbitrations—see Practice Note: LCIA
(2014)—tribunal's duties and powers—Joinder and consolidation
• the availability of emergency arbitrator services—see Practice Note: LCIA (2014)—emergency
arbitrator and expedited tribunal
• the applicability of the general guidelines for party legal representatives, which govern the con-
duct of counsel appearing before the Tribunal in LCIA arbitrations—see Practice Note: LCIA
(2014)—general guidelines for legal representatives
• the LCIA Court’s decisions on challenges to arbitrators are in writing and reasoned, which has
allowed the LCIA to build up and publish a database of such decisions—see News Analysis:
Analysing the LCIA arbitration challenge database