Informações Gerais
LCIA Introduces New Arbitration Rules in Force As of 1 October 2020
LCIA Introduz Novo Regulamento de Arbitragem em Vigor a Partir de 1º de
Outubro de 2020
Ana Paula Montans
Senior Associate, Omnia Strategy LLP (London). LLM, University of Paris II, Pantheon-Assas.
SUMMARY: I – Introduction; II – Brief overview of the recent amendments to the Rules; III – Conclusion.
I – INTRODUCTION
The London Court of International Arbitration (“LCIA”), one of the
world’s leading international institutions for commercial dispute resolution, has
recently released a revised version of its arbitration rules (the “Rules” or “2020
LCIA Rules”), which will apply to proceedings commencing from 1 October
2020 (unless the parties agreed otherwise). They replace the 2014 LCIA Rules.
The 2020 LCIA Rules incorporate recent developments and best practices
in arbitration in user-friendly language, with a view to enhancing the efficiency
of the proceedings. Although the previous rules already granted tribunals
wide discretion with respect to the conduct of proceedings, the 2020 LCIA
Rules specifically list some of the techniques arbitrators may apply to conduct
arbitrations efficiently and expeditiously. These include, inter alia, the tribunal’s
power to decide on whether to conduct virtual hearings, and to make early
determination of claims and counterclaims. The Rules expand the tribunal’s
powers to consolidate related arbitration proceedings. The modernisation of
the Rules also extends to the way the LCIA operates by adopting the use of
electronic communication as the default option.
The 2020 LCIA Rules will certainly be welcomed by the arbitration
community as modern and innovative, and may stimulate similar changes at
other arbitration institutions around the world.
II – BRIEF OVERVIEW OF THE RECENT AMENDMENTS TO THE RULES
A summary of the nine principal amendments to the Rules are set out
below:
1. Early determination: the revised Rules expressly grant tribunals the
power to make an “Early Determination” and dismiss any claim,
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counterclaim or defences thereto by ruling that they are outside of
the tribunal’s jurisdiction, are inadmissible, or are manifestly without
merit (Article 22.1 (viii) of the 2020 LCIA Rules). This is a helpful
addition that assists parties and tribunals in saving time and costs
in the proceedings. It is also in line with rules already adopted by
other international institutions, such as the SCC (Art. 39(1) of the SCC
Rules), SIAC (Art. 29 of the SIAC Rules) and HKIAC (Art. 43 of the
HKIAC Rules)1.
2. Time efficiency: the 2020 LCIA Rules expressly encourage tribunals
to issue their final awards no later than three months after the last
submission of the parties (Article 15.10 of the 2020 LCIA Rules). This
is in line with the timeframe set out by the ICC2. The 2020 LCIA
Rules also provide some clarification as to the powers of tribunals in
the conduct of the arbitration by specifying a number of techniques
which arbitrators may apply to expedite and increase the efficiency of
the proceedings, reflecting current best practices. These include, inter
alia, the tribunal’s power to limit the length or content of the parties’
written statements, oral or written testimonies, and the duration of
hearings, as well as provisions on the use of technology to expedite
the proceedings (Article 14.6 of the 2020 LCIA Rules).
3. Virtual hearing: reflecting current trends triggered by Covid-19,
the 2020 LCIA Rules explicitly state that hearings may take place
in person or virtually, by conference call, videoconference or other
communications technology, with participants in one or more
geographical places (Article 19.2 of the 2020 LCIA Rules). This is
a helpful clarification which will bring certainty to parties and
arbitrators.
4. “Composite Requests” for multi-party or multi-contract arbitrations:
the 2020 LCIA Rules now provide a clear mechanism for the
commencement of more than one arbitration proceeding, against the
same or different respondents, through a single arbitration request
(Article 1.2 of the 2020 LCIA Rules). The respondent will also be
allowed to file a “Composite Response” in these cases (Article
2.2 of the 2020 LCIA Rules). While the issuance of a Composite
Request may be accompanied by a request for consolidation of the
disputes, consolidation is not automatic. Whether or not the multiple
1 In ICC arbitrations, the power of arbitral tribunals to make early determinations are covered by Rule 22 of the 2017
Rules, as expressly set out at paras. 74 to 79 of the ICC Note to the Parties and Tribunals on the Conduct of the
Arbitration of 1 January 2019.
2 See ICC Note to the Parties and Tribunals on the Conduct of the Arbitration of 1 January 2019, para. 119.
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arbitrations are consolidated and resolved together will be determined
by the tribunal and/or the LCIA.
5. Consolidated proceedings and concurrent conduct of arbitrations:
under the 2014 LCIA Rules, tribunals had the power to order, with the
approval of the LCIA Court, the consolidation of several arbitrations
into a single arbitration. This was possible: (1) where all the parties
to the arbitrations to be consolidated agreed in writing; or (2) where
arbitrations were commenced under the same arbitration agreement
or any compatible arbitration agreement(s) between the same
disputing parties, provided that no tribunal had yet been formed for
those other arbitration(s) or, if already formed, that the tribunal(s) was
composed of the same arbitrators. The LCIA Court had similar powers
to consolidate arbitrations where no tribunal had yet been appointed.
The revised Rules, in addition to the situations envisaged in the 2014
Rules, now provide the possibility of consolidating disputes arising
out of the “same transaction or series of related transactions”, even
when there is no identity of the parties3 (Article 22.7(i) and (ii) and
Article 22.8(i) and (ii) of the 2020 LCIA Rules). The new Rules also
extend the tribunal’s power to order the concurrent conduct of
arbitrations as an alternative to consolidation. (Article 22.7(iii) of the
2020 LCIA Rules).
6. Primacy of electronic communication: electronic filing and
communication will be the default means of transmission under the
revised Rules (Article 4 of the 2020 LCIA Rules; Article 3 of the 2020
LCIA Mediation Rules), whether by email or other electronic means,
including any LCIA-operated electronic filing system. References to
the previously identified methods of personal delivery, registered post
or courier service have been deleted. In particular, the Rules provide
expressly that all written communication in relation to the arbitration
shall be delivered by email or other electronic means (including
3 Some commentators have pointed out possible concerns with this provision, i.e. that it might result in a situation
where certain parties to the consolidated arbitration have not been able to participate in the arbitrator selection. For
instance, see S. Dutson and B. Woodd-Walker, “The new LCIA rules’ consolidation rule – a trap for the unwary”,
2 October 2020, available at [Link]
consolidation-rule-trap-the-unwary (subscription required), stating that “in trying to solve one problem, the new
LCIA rules create another – a risk that awards in consolidated arbitrations could be challenged on the grounds
that one or more parties have been able to exercise their right to choose an arbitrator”. For instance, in the Dutco
case, the French Cour de Cassation decided that “the principle of equality of the parties in the designation of
arbitrators is a matter of public policy”. See S. Ferreira Lemes, “Note – BKMI et Siemens v. Dutco Construction,
Cour de Cassation (1er Chambre Civile), Pourvoi Nº 89-18708 89-18726, 7 January 1992”, Revista Brasileira de
Arbitragem, issue 29, pp. 210-213, jan./mar. 2011. In Brazil, see São Paulo Court of Appel, Appeal nº 0002163-
90.2013.8.26.0100, Justice Gilberto dos Santos, Paranapanema S/A and Banco Santander S/A, 3 July 2014; L.
de Campos Melo, “Note – Banco Santander Brasil S/A v. Paranapanema S/A, Tribunal de Justiça do Estado de São
Paulo”, Revista Brasileira de Arbitragem, issue 40, pp. 129-133, out./dez. 2013.
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any electronic filing system operated by the LCIA). This includes
the Request for Arbitration (Article 1.3 of the 2020 LCIA Rules) and
Response (Article 2.3 of the 2020 LCIA Rules). In fact, if a party wants
to submit a Request or Response by an alternative method, it has
to seek prior written approval from the Registrar. This raises one
practical concern: it is now very important that attention is given to
any email address provided in notice clauses, as service to that email
address will be deemed valid service under the LCIA Rules and will
start the clock for the service of the Response. LCIA users should
also be mindful of enforcement considerations in jurisdictions where
courts take a formalistic view of the evidence that due notice of the
arbitration proceedings was given under Article V(1)(b) of the New
York Convention, particularly when dealing with non-participating
respondents.
5. In addition, Article 26.2 of the 2020 LCIA Rules introduces an express
provision that allows for the electronic signature of awards, unless
the parties agree otherwise or the arbitral tribunal or the LCIA Court
directs otherwise. An award may also be signed electronically and/or
in counterparts and assembled into a single instrument. These changes
reflect the growing interest in the use of technology in international
arbitration, accelerated by COVID-19, to make proceedings more
efficient and environmentally friendly.
7. Appointment and use of tribunal secretaries: the 2020 LCIA Rules
provide a clear framework on the appointment and role of tribunal
secretaries in Article 14A. The Rules codify the LCIA approach
previously contained within a Guidance Note to arbitrators from
2017. Notably, they stipulate that the parties need to agree on the
use and role of the tribunal secretary, and make it clear that a tribunal
secretary cannot carry out any decision-making functions (Articles
14.10 and 14.8 of the 2020 LCIA Rules). In addition, it expressly
provides that the tribunal’s obligations of independence, impartiality
and confidentiality also extend to tribunal secretaries (Articles 14.9,
14.4 and 30.2 of the 2020 LCIA Rules). The updated Schedule of
Arbitration Costs, which forms part of the Rules, provides the range
of fees that, according to the LCIA, would generally be considered
reasonable for a tribunal secretary, varying between £75 to £175 per
hour (Article 14.10(ii) of the 2020 LCIA Rules and Article 6 of the
updated Schedule of Arbitration Costs).
8. Data protection: the new Article 30A requires tribunals to liaise with
the parties (and, where appropriate, the LCIA) at an early stage in
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order to consider whether it is appropriate to adopt any security
measures to protect the physical and electronic information shared in
the arbitration, as well as personal data in light of any applicable data
protection laws.
9. Fees and Costs: The 2020 Rules provide for increased fees for filing an
arbitration from £1,750 under the 2014 LCIA Rules to £1,950 (Article
1 of the updated Schedule of Arbitration Costs). Additionally, the
maximum hourly rate for a tribunal member has been re-evaluated
from £450 per hour under the 2014 LCIA Rules to £500 per hour
(Article 2 of the updated Schedule of Arbitration Costs).
This revision brings arbitrators’ rates closer in line with the hourly rates
charged by counsel in complex international cases and the hourly
rates of arbitrators in similarly complex ad hoc cases. According to
Jacomijn van Haersolte-van Hof, Director-General of the LCIA, “the
supervision of the LCIA Court ensures that in each individual case,
the rate will be set commensurate with the particular circumstances
of the case and not lead to an automatic increase in all cases”4.
III – CONCLUSION
Overall, the amendments are expected to be welcomed by the arbitration
community, as they further streamline the arbitral process by codifying best
practices with a view to further increase the efficiency of the proceedings.
The amendments reflect the LCIA’s effort to modernise its rules and
to encourage the use of technology in arbitration. The timing of the Rules
is apt, providing arbitrators and parties with the necessary tools to address
the challenges raised by the COVID-19 pandemic. Embracing electronic
communication and virtual hearings is not only a more environmentally
sustainable approach, but it is also likely to increase cost efficiency. The 2020
Rules should thus contribute to the LCIA maintaining its position as a leading
international arbitration institution.
4 “Updates to the LCIA Arbitration Rules and the LCIA Mediation Rules (2020)”, dated 11 August 2020, available
at [Link] (October 2020).
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