New LMAA Terms and Procedures – Coming into effect on 1 May 2021

The LMAA has very recently issued revised Terms and procedures, which take effect from 1 May 2021 and apply to arbitrations started after this date.

The new set of rules comprise the LMAA Terms 2021, the LMAA Intermediate Claims Procedure 2021 and the LMAA Small Claims Procedure 2021. Each text is also accompanied by guidelines in relation to how arbitrators will deal with matters of procedure in an effort to try to avoid “spiralling delays and costs that can occur during the course of arbitration references…” In particular, the guidelines in relation to the LMAA Terms 2021 provide instructions on the time for service and manner in which LMAA Questionnaires should be completed.

We summarise key changes to the 2021 Terms below:

1. 1. Virtual hearings. One major change, directly born out of the Covid-19 pandemic, relates to virtual (and semi-virtual) hearings. In the new Sixth Schedule, the Terms incorporate specific guidelines for the conduct of such hearings. These guidelines provide parties with useful directions when dealing with such hearings, on points such as the production of electronic hearing bundles, technical support and the manner in which oral evidence should be dealt with.
   2. Electronic signatures. In another pandemic related change, the new Terms now allow for awards to be signed electronically, allowing for greater flexibility and speed in the issuance of awards and catering for circumstances where arbitrators have difficulty in physically signing the award.
   3. Witness evidence. The LMAA now emphasises that a witness statement should be in the witness’s own words and relate only to matters of fact on which they have specific knowledge and should not be used as another means of arguing a particular case, or serving as an additional pleading. These changes reflect the new English Court procedures regarding witness evidence and are set out in new paragraph 2(a) of the Fourth Schedule to the LMAA Terms 2021.
   4. Appointment of sole arbitrator. Where there is to be more than one arbitrator appointed, and the respondent fails to appoint their own arbitrator, the new Terms have now shortened the procedure for the appointment of a sole arbitrator. Following such a default by the Respondent, the Claimant is no longer required to give any further notice to the Respondent, before a sole arbitrator is appointed. Therefore, it is more important than ever for Respondents to appoint their own arbitrator within the 14-day period following appointment of the Claimant’s arbitrator.

There have also been some noteworthy changes to the LMAA Intermediate Claims Procedure (“the ICP”) and the LMAA Small Claims Procedure (“the SCP”) as follows:

1. 1. Paragraph 5 of the ICP 2021 mirrors the above change in the main Terms regarding the shorter procedure to appoint the Claimant’s arbitrator as the sole arbitrator.
   2. Paragraph 7 of the SCP 2021 now allows for reasoned awards to be provided to the parties and the sole arbitrator may, on application of a party, provide an explanation on a specific point or part of the award.
   3. The SCP 2021 now provides that the payment of the SCP fees are a condition precedent to the continuance of the SCP proceedings.
   4. Accompanying guidelines on procedure under the SCP serve as a reminder of the requirements for the length and word limits of submissions. Arbitrators may require parties to amend their submissions if these limits are exceeded. The guidelines also clarify that claim submissions must include details of the dispute and not merely assert a bare claim. The guidelines caution parties that there may be adverse costs consequences for failing to adequately set out the basis of the underlying dispute in the claim submissions.

The new LMAA Terms and procedures and other rules can found here.