On 11 August 2020, the London Court of International Arbitration (LCIA) released an updated set of Arbitration Rules. These replace the 2014 LCIA Rules and will take effect on 1 October 2020, applying to all arbitrations commenced on or after that date.
The LCIA has referred to the outbreak of the COVID-19 pandemic, which took place as the updated Rules were being finalised, as having allowed it to address “some changes in recent good practice”. These include the increased use of virtual hearings and the prevalence of electronic communications.
A change welcomed by the arbitration community, the long awaited 2020 Rules aim to make the arbitration process more efficient and transparent for arbitrators, mediators, and parties alike.
While the authors claim to have adopted a “light touch” approach when making the revisions, the updated Rules nevertheless include a number of significant changes which we highlight below.
New technology for the ‘new normal’
The 2020 Rules accommodate (and encourage) the use of technology in arbitrations now taking place in these new times, following the outbreak of the COVID-19 pandemic.
The Rules provide that electronic communication shall be the primary form of communication between the parties, institution and the arbitrators (Article 4) and have removed any option to submit communications by courier or registered post. Requests for arbitration must now be filed electronically and the arbitration is commenced when the electronic request is received by the Registrar (Articles 1.3 and 1.4). By default, the Rules provide that written communication sent electronically is treated as having been received by a party on the day it is transmitted, with reference to the recipient’s time zone.
The Rules now also make more detailed provisions for virtual hearings, whether by conference call, videoconference or using other communications technology, with participants in one or more geographical locations (Articles 14.3 and 19.2). Awards in the arbitration may now be signed electronically, unless the parties agree otherwise and subject to any contrary directions by the Arbitral Tribunal or LCIA Court (Article 26.2).
Expedition of the proceedings
The 2020 Rules have increased the power of the Tribunal to make orders directed to expedite the conduct of the arbitration.
The Tribunal is given an express power to determine that a claim, defence, counterclaim, cross-claim, defence to counterclaim or cross-claim is manifestly made without any merit and where appropriate issue an order or award to that effect (Article 22.1 (viii)).
Article 15.10 also provides that Tribunals should endeavour to make a final award no later than three months following the last submission of the parties. This contrasts with the requirement under the 2014 LCIA Rules to do so “as soon as reasonably possible”.
Article 14.6 sets out examples of what procedural orders a Tribunal could adopt to expedite the arbitration procedure, including:
- limiting the length or content of the written statement or witness statements;
- adopting technology to enhance efficiency and expeditious conduct of the arbitration; and
- setting an appropriate time limit for any stage or any step to be taken in the arbitration.
Composite requests and consolidation
The 2020 Rules provide that a Claimant may serve a composite request for multiple arbitrations at once (Article 2.1), taking into account claims which arise from more than one contract. The Respondent is then equally entitled to file a composite Response (Article 2.2). Each arbitration issued under the composite request will need to be accompanied by its own separate filing fee (Article 1.2).
The Tribunal’s powers have also been increased regarding consolidation of arbitrations subject to the LCIA Rules. Article 22.7(ii) now allows the Tribunal to consolidate arbitrations under compatible arbitration agreements between the same disputing parties “or arising out of the same transaction or series of related transactions”. This wider power also applies to the LCIA Court, in circumstances where the tribunal has not yet been formed (Article 22.8(ii)).
The 2020 Rules also recognise the importance of data protection and security. Article 30A provides that processing of any personal data is subject to “applicable data protection legislation” and refers to the LCIA’s own data protection notice on its website.
The Rules provide that the Tribunal, in consultation with the Parties, should consider whether it is appropriate to adopt:
“(i) any specific information security measures to protect the physical and electronic information shared in the arbitration; and
(ii) any means to address the processing of personal data produced or exchanged in the arbitration in light of applicable data protection or equivalent legislation.”
2020 Mediation Rules
The LCIA has also updated its Mediation Rules, with the 2020 version taking effect from 1 October 2020 and replacing the 2012 Mediation Rules. Similar updates as above are reflected in the new Mediation Rules, again with a view to making the process more efficient and streamlined.
As with arbitrations, all communications in mediations should, by default, be made electronically and the new Rules now provide for virtual mediations. The new Mediation Rules also include revised provisions on costs, compliance and data protection.