The LCIA Rules 2020 – what's new?

Changes in relation to complex multi-party cases and the use of technology form the backbone of the latest version of the London Court of International Arbitration (LCIA)'s arbitration rules (the LCIA Rules 2020).

Greater scope for consolidation of different arbitrations, an early determination procedure and permission for parties to start multiple arbitrations under a single request are some of the key changes. 

The new rules came into force on 1 October 2020 and are likely to apply to most requests for arbitration that are filed with the LCIA on or after that date. They replace the LCIA Arbitration Rules 2014 (the LCIA Rules 2014).  

We consider these changes in further detail below.

Consolidation 

Disputes under joint venture, finance and construction documents are often complex and multi-contractual. As such, they can be the subject of multiple concurrent arbitration proceedings, resulting in sometimes contradictory awards. In a change that brings the LCIA closer into line with other major arbitral institutions such as the ICC and SIAC, the tribunal may now order consolidation of arbitrations started under the same or compatible arbitration agreement and between the same disputing parties or "arising out of the same transaction or series of related transactions" (Article 22.7(ii)).

However, the wording of Article 22.7(ii) appears to contemplate parties being denied the opportunity to nominate arbitrators if the arbitration to which they are party is consolidated into an existing arbitration to which they are not party.  This raises the obvious concern that any subsequent awards may be unenforceable in jurisdictions where equality of treatment in the appointment of arbitrators is seen as a fundamental right.  For this reason, tribunals and the LCIA Court are likely to apply Article 22.7(ii) cautiously in some cases.

In addition, Article 22.7(iii) expressly permits arbitrations to be heard concurrently where:
• the same arbitral tribunal is constituted in respect of each arbitration;
  and 
• where that arbitration is also:
   o subject to the LCIA Rules 2020; 
   o commenced under the same arbitration agreement or any compatible
      arbitration agreement(s); and 
   o either between the same disputing parties or arising out of the same
      transaction or series

 
Early determination

A new power to make an "Early Determination" will be welcomed in appropriate cases:

"The Arbitral Tribunal shall have the power… after giving the parties a reasonable opportunity to state their views…to determine that any claim, defence, counterclaim, cross-claim, defence to counterclaim or defence to cross-claim is  manifestly outside the jurisdiction of the Arbitral Tribunal, or is inadmissible or manifestly without merit; and where appropriate to issue an order or award to that effect"(Article 22.1(viii)).

Some caution may be necessary when exploring this as a means of dispatching unmeritorious claims; the New York Convention provides that a contracting state need not recognise or enforce an award if a party was "unable to present his case" (Article V 1 (b)). 

Some tribunals may therefore prioritise producing robust awards that can withstand challenges either at the arbitral seat or in any enforcement jurisdiction over any perceived advantages of getting a weak claim thrown out early on in the proceedings. For this reason, early determination in LCIA arbitrations is unlikely to become as frequent as analogous procedures in national courts (such as summary judgment or strike out in England).  

Starting multiple arbitrations under a single request

The English High Court does not permit parties to start multiple arbitrations under a single request under the LCIA Rules 2014(i). Instead, parties had to file individual requests for each arbitration agreement under which there was a claim.

The LCIA Rules 2020 expressly permits a claimant to serve a composite request in respect of multiple arbitrations, providing that the usual requirements for a valid request are met (Article 1.2).  However, each arbitration will proceed separately unless the LCIA Court or tribunal determines otherwise.

This is a welcome change that will save parties time and cost in multi-contractual disputes.

Other key changes 

• Applications to state courts 

The LCIA Rules 2020 contain clearer wording to the effect that the right of appointment of an emergency arbitrator under Article 9B, and the power of a tribunal to order interim or conservatory measures under Article 25.1, is not intended to restrict a party’s right to apply to a state court for such measures in the circumstances set out in the rules (Articles 9.13 and 25.3).

• Data Protection

There is an express requirement that the tribunal consult with the parties on appropriate measures in relation to the processing of personal data produced or exchanged in the arbitration, and the adoption of information security measures to protect shared information (Article 30.5). The tribunal and the LCIA are granted the express power to issue directions on data protection and information security binding on the parties, and on the parties and tribunal, respectively (Article 30.6).

• Electronic communications and use of technology. 

Requests for arbitration and responses are to be submitted by electronic means (Articles 1.3, 2.3 and 4.1), and there is express reference to the use of communications technology for hearings (Articles 14.3 and 19.2). Awards may be signed electronically (Article 26.2).  

(i) A v B [2017] EWHC 3417 (Comm)