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LMAA Terms 2017: a short guide

The LMAA have published a revision to the main LMAA terms, the Intermediate Claims Procedure (“ICP”) and the Small Claims Procedure (“SCP”), which will be effective from 1 May 2017 for appointments on or after that date. The key revisions are as follows.

Key revisions to the LMAA Terms

  1. Constitution of the Tribunal – paragraph 10, clarifies the position that in arbitrations where both parties are required to appoint their own arbitrator and one party fails to do so, Section 17 of the Arbitration Act 1996 (“the AA”) shall apply.  Section 17 of the AA provides that when one party fails to appoint their own arbitrator, the non-defaulting party can give 7 days’ prior written notice to the defaulting party to appoint an arbitrator, following which the non-defaulting party’s arbitrator will become the sole arbitrator.
  1. Concurrent arbitrations – paragraph 16(b)(i), provides that the time limits for service of submissions may be abbreviated or modified in the interest of saving costs/minimising delay/enhancing efficiency.  This provision is intended to increase the speed at which concurrent arbitrations can proceed.  At present it can take months for submissions to make their way up and down the line even though the submissions are largely being adopted by the intermediate parties.  The Tribunal can now order that the time for service of submissions is reduced.
  1. Costs – paragraph 13 of the second schedule obliges both parties and tribunals to actively consider ways in which to make the arbitral process as cost-effective and efficient as possible. They are now required to take into consideration the Checklist set out in the Forth Schedule.
  1. Settlement – paragraph 19(b), makes it clear that ‘Part 36’ of the Civil Procedure Rules does not apply to LMAA arbitration.  It is not unusual to see offers analogous to a Part 36 offer made in LMAA arbitrations with a threat of similar sanctions (such as indemnity costs).  This amendment suggests that a Tribunal are unlikely to apply the Part 36 regime and the cost consequences of the same to without prejudice offers analogous with Part 36 offers.

Key revisions to the ICP

  1. Powers of the Tribunal – paragraph 12 provides that a Tribunal can now dismiss a claim in the event that claim submissions are not served in a timely manner.
  1. Concurrent arbitrations – paragraph 18(a) brings the provisions regarding concurrent arbitrations in line with the provisions in the main terms (at paragraph 2 above).

 Key revisions to the SCP

  1. Monetary limit – paragraph 1(a) increases the monetary limit for claims brought under the SCP from USD 50,000 to USD 100,000 where no limit has been agreed by the parties.
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