We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
25 September 2014
Multiparty and multi-contract
Default seat and arbitration agreement
Identity of legal representatives
Conduct of legal representatives
Modernisation – not revolution
The London Court of International Arbitration (LCIA) is the latest arbitral institution to overhaul its arbitration rules. Unless parties agree otherwise, the new rules will apply to all LCIA arbitrations commenced on or after October 1 2014. They replace the 1998 version of the rules.
The amendments bring the LCIA Rules up to date with current arbitration practice and procedure. Like other institutions, the LCIA has addressed key issues facing the arbitral process. The amendments seek to:
In addition, the LCIA Rules now contain enforceable guidelines relating to the conduct of parties' legal representatives.
The new rules seek to promote efficiency throughout the proceedings with the following new provisions:
The new rules retain the parties' ability to apply for expedited formation of the tribunal in cases of "exceptional urgency" (Article 9A).
The LCIA Rules 1998 already empowered the tribunal to effect joinder of third parties (Article 22.2(viii)).
Under the new rules, an LCIA tribunal may also order consolidation between one or more arbitrations at a party's request and with the LCIA Court's approval where:
The LCIA Court also has powers to consolidate arbitrations before a tribunal has been appointed if the arbitration proceedings are between the same parties and are all subject to the same arbitration agreement (Article 22.6).
The emergency arbitrator mechanism provides parties to arbitral proceedings with recourse to relief on an urgent and interim basis before the tribunal has been appointed. Without it, between commencement of the arbitration and the appointment of the tribunal, parties would have to seek assistance from the courts to provide such relief – which may not always be available.
The emergency arbitrator mechanism is now provided for in the arbitral rules of the International Chamber of Commerce (ICC), the Japan Commercial Arbitration Association, the Hong Kong International Arbitration Centre (HKIAC), the Singapore International Arbitration Centre (SIAC), the Stockholm Chamber of Commerce and the World Intellectual Property Organisation Arbitration and Mediation Centre, as well as in the new Paris Arbitration Rules.
The emergency arbitrator mechanism in the new rules has the following features:
These provisions will apply to all arbitrations commenced on or after October 1 2014, unless parties expressly opt out. If the arbitration agreement was concluded before that date, the parties must expressly opt in to these provisions for them to apply.
Although the concept of an 'emergency arbitrator' is relatively untested, its use is likely to increase. The introduction of this tool puts the services offered by the LCIA on a par with those of other leading arbitral institutions.
As was the case under the LCIA Rules 1998 (Article 16), the parties may agree the seat of arbitration; in the absence of agreement by the parties, the seat will be London, England. Article 16.2 has been amended to clarify that in the absence of choice, the default seat will apply up to and until the formation of the tribunal. Thereafter, the tribunal (and no longer the LCIA Court) may find that a different seat of arbitration is more appropriate, after seeking input from the parties.
The new Article 16.4 now expressly states that unless the parties provide otherwise, the law of the arbitration agreement as well as the law of the arbitration shall be that of the "seat" of the arbitration. This is significant because the law of the arbitration agreement (in the absence of the parties' express choice) continues to be a matter of debate, as demonstrated by recent English cases such as Sulamerica CIA Nacional de Seguros SA v Enesa Engenharia SA  EWCA Civ 6; Arsanovia Ltd v Cruz City 1 Mauritius Holdings  EWHC 3702 (Comm); and Habas Sinai VE Tibbi Gazlar Isthisal Endustri AS v Sometal SAL  EWHC 29 (Comm).
Under the new rules, parties must now notify all other parties, the tribunal and the LCIA registrar if there are any changes or additions to their legal representatives (Article 18.3).
Such changes are conditional upon the tribunal's approval, which may be withheld if the change of counsel compromises the composition of the tribunal or the finality of the award (Article18.4). These changes grant the tribunal some control over who appears before it and seek to minimise the potential for certain conflict issues arising during the course of the arbitration (as occurred in Hrvatska Elektroprivreda DD v The Republic of Slovenia (ICSID Case ARB/05/24)).
The most discussed feature of the new rules is the enforceable guidelines for the conduct of parties' legal representatives, which have generated mixed views among LCIA users. All legal representatives appearing before the tribunal must comply with these guidelines, which create a baseline for the conduct of legal representatives:
The guidelines do not derogate from any mandatory laws and conduct rules applicable to the legal representatives. The new rules expressly give the tribunal the power to police the violation of the guidelines through any or all of a series of specified sanctions: a written reprimand or a written caution as to future conduct of the legal representatives and any "other measures necessary" (Article18.6).
The LCIA Rules 2014 follow the release of new arbitration rules by various institutional bodies including the ICC (2012), SIAC (2013) and HKIAC (2013). The aim of the changes is to bring the LCIA Rules up to date with current practice and procedure by catering for the major issues currently facing the arbitral process today. The new rules are innovative in some respects, but do not depart significantly from the approach taken by most institutions. Importantly, they retain the characteristics distinctive to LCIA arbitration, such as time-based fees.
The LCIA continues to be a 'go-to' institution for users – their arbitrations will be well supported by these modernised and comprehensive rules.
For further information on this topic please contact Marie Berard or Anna Kirkpatrick at Clifford Chance LLP by telephone (+44 20 7006 1000), fax (+44 20 7006 5555) or email (firstname.lastname@example.org or email@example.com). The Clifford Chance website can be accessed at www.cliffordchance.com.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.