The LCIA Arbitration Rules are changing with effect from October 1, 2020 (the "LCIA 2020 Rules"). The over-arching intention of the amendments is to ensure that international arbitrations remain flexible, procedurally efficient and current. 

In announcing the update to the LCIA 2020 Rules, the LCIA was clear that the changes "were being finalised as the Covid-19 pandemic took hold", but that Covid-19 "allowed the LCIA to address explicitly some changes in recent good practice, notably the increased use of virtual hearings and the primacy of electronic communications across the board."1

From a practitioner's perspective, the key changes to the LCIA 2020 Rules are as follows:

  • The provision of powers to arbitrators to expedite proceedings through the introduction of early dismissal determination;
  • The expansion of the use of virtual hearings and focus on electronic communucations; and
  • Further powers allowing for proceedings to be consolidated.

Each of these changes is considered in further detail below.

Expedition of Arbitral Proceedings

Pursuant to Article 22.1 (viii) of the LCIA 2020 Rules, the Tribunal is able to make an early determination regarding any claim, defence, counterclaim or cross claim that is without merit, inadmissible or outside the jurisdiction of the Tribunal. This change is significant. In particular, parties may now bring an application for unmeritorious claims and defences to be dealt with at an early stage without being compelled to proceed through a full arbitration.

While it remains to be seen what types of cases will meet the threshold for early determination under the LCIA 2020 Rules, early dismissal has also been embraced by other arbitral institutions, such as Singapore's International Arbitration Centre ("SIAC"). SIAC's 2016 rules similarly allow for the early dismissal of a claim or defence which is without legal merit or outside the jurisdiction of the Tribunal. 

Ultimately, early determination may not be appropriate in every case. However, going forward, parties subject to the LCIA 2020 Rules should consider whether there is merit in seeking early determination regarding the entirety of a claim or defence or an aspect of it.

For further information on this issue, please also see our previous blog post regarding early determination in arbitration proceedings here. 

The Use of Virtual Hearings

Central to the changes in the LCIA 2020 Rules is the expanded use of virtual hearings. Article 19.2 of the LCIA 2020 Rules is clear that the Tribunal is to organize the conduct of the hearing in consultation with the parties and that the hearing may take place virtually by telephone, conference call, video conference or other forms of communications technology. Article 19.2 also recognizes that parties may be conferencing in together and/or from different geographic locations. 

Covid-19 has significantly increased the appetite for virtual hearings. Parties are developing good practices for their virtual proceedings, which are likely to be more refined over time. 

We have written extensively on virtual hearings and the use of technology when examining witnesses remotely in previous blog posts that can be accessed here and here. 

Consolidation of Proceedings

Article 22A of the LCIA 2020 Rules expands the scope of the powers of the Tribunal to order the consolidation of arbitration proceedings with approval from the LCIA Court. The LCIA 2020 Rules provide that arbitrations may be consolidated where they:

(a) are commenced pursuant to the same or compatible arbitration agreements; and

(b) involve the same disputing parties or arise out of the same transaction or series of related transactions.

In the event that the Tribunal has not yet been constituted, the LCIA Court is also able to consolidate proceedings. 

The expanded scope of the circumstances in which arbitrations can be consolidated is a welcome change. This amendment will allow for greater efficiency and will help avoid, for example, voluminous document collections and reviews to be undertaken multiple times, as well as witnesses and experts having to prepare witness statements and expert reports and testify on more than one occasion. 

Other changes introduced by the LCIA 2020 Rules

In addition to the above significant amendments, there are other changes to the LCIA 2020 Rules that parties should be aware of, including:

(a) Electronic communications:

(i) the Request for Arbitration and the Response are to be submitted to the Registrar in electronic form (Article 4.1);

(ii) Arbitral awards can be signed electronically (Article 26.2);

(b) Expediting proceedings: the Tribunal has been vested with certain powers to expedite proceedings, including, limiting the length of witness statements or dispensing with witness statements all together and limiting the written and oral testimony of any witness (see Article 14.6); and

(c) Final award: the Tribunal must endeavor to issue its final award within three months following the date of the last submission (either oral or in writing) (Article 15.10).

The changes made to the LCIA 2020 Rules are likely to have a significant impact on the course of international arbitrations going forward. Covid-19 enabled parties to "test the waters" in relation to a number of practices that are now prescribed in the LCIA 2020 Rules. There is little doubt that these practices will become more established going forward. It is also clear that the LCIA 2020 Rules are focused on making international arbitrations more efficient for parties in a way that may have not been possible under previous iterations of the rules.

Footnote

1. https://www.lcia.org/lcia-rules-update-2020.aspx

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