Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
Find up-to-date guidance on points of law and then easily pull up sources to support your advice with Lexis PSL
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
International commercial arbitration was growing again before the COVID-19 pandemic hit, an analysis of 2019 statistics from six major international arbitral bodies shows. James Clanchy of the Lexis®PSL Arbitration team finds that this growth was largely in arbitrations before a sole arbitrator and in lower value cases.
The 2019 statistics show that London continues to dominate, not only as a seat but also as a hub for arbitration and as a source for arbitrators. Singapore has fallen behind in terms of the numbers of arbitrators appointed there. Ad hoc arbitration remains as strong as ever, and first choice in London, according to the data that is available for it. Overall, international arbitration, in its diverse forms, appears to be well-placed to absorb a surge of new disputes in the wake of the pandemic.
The 2019 statistics have implications for the conduct of arbitrations in the post-crisis economic landscape, for London in the post-Brexit environment, for institutions looking to grow their caseloads, and for arbitration practitioners and arbitrators hunting for new cases. These include the following:
When we published the first of our annual analyses of statistics in 2018, we noted that, contrary to assumptions at the time, there had been a year-on-year decline between 2016 and 2017 in the total number of arbitrations commenced with six major arbitral bodies whose reported caseloads we studied. See our July 2018 post: Arbitration statistics: a reality check
In 2019, we found that the 2018 caseloads stabilised, the total being just one below 2017’s total. See our June 2019 post: Arbitration statistics 2018: London bucks downward trends
The 2019 statistics present a more encouraging picture: the total number of cases has increased by 443 (12.5%) since 2018 or 189 (5%) since 2016.
The increase in the appointments of arbitrators is almost the same in absolute numbers (i.e. very nearly one arbitrator per case) but smaller in percentage terms: 474 (9%) since 2018, 203 (4%) since 2016.
The figures for the four years 2016 to 2019 are illustrated in the graphs below.
Only one of the six organisations saw a decline in the number of appointments of arbitrators between 2018 and 2019 and between 2016 and 2019: the Singapore International Arbitration Centre (SIAC). At SIAC, the number of appointments of arbitrators is consistently below the number of new cases filed. In 2019, 182 fewer appointments were made than arbitrations registered. Early settlements and consolidation of cases will provide partial explanations but SIAC’s annual report also shows that sole arbitrators are overwhelmingly more popular in its arbitrations than three-member tribunals.
In 2019, SIAC made 159 individual appointments of arbitrators, 145 of which were to sole arbitrator tribunals. It also confirmed 138 arbitrators chosen by parties and co-arbitrators. Even if three-member tribunals absorbed all of those appointments (SIAC’s report does not contain a breakdown), sole arbitrators would still outnumber them by three to one.
The six organisations chosen for our annual analyses correspond to the five institutions which were the most popular among respondents to the 2018 Queen Mary University of London White & Case international arbitration survey with the addition of the London Maritime Arbitrators Association (LMAA), whose Terms are probably the most widely used rules for ad hoc international commercial arbitrations. In 2019, the LMAA had 44% of the cases across the six organisations and 51% of the appointments of arbitrators.
With its 2019 report, the LCIA published, for the first time, breakdowns of appointments of arbitrators in ad hoc arbitrations in which it provided various services. While the LCIA was called upon to make only six appointments in UNCITRAL Rules arbitrations in 2019 (included in the figures above), in ad hoc arbitrations in which it provided fundholding services, the parties themselves had made 78 appointments of arbitrators (not included above).
Meanwhile the Hong Kong International Arbitration Centre (HKIAC) reported that, of its 308 new arbitrations in 2019, 173 were administered under its own rules or under other rules, including the UNCITRAL Arbitration Rules. Of the 122 appointments which the HKIAC made itself, 69.7% were sole arbitrators, 19 (15.6%) were in UNCITRAL Rules cases which it administered and a further 36 (29.5%) were in other ad hoc arbitrations.
Noting then that the five institutions’ figures include ad hoc arbitrations, in which they provide various services, but that most ad hoc arbitrations don’t pass through institutions, it is evident that the strength and popularity of ad hoc arbitration, particularly in London, have not been eroded.
This year has seen the publication of the Singapore International Dispute Resolution Academy (SIDRA) international dispute resolution survey. That survey did not look at ad hoc commercial arbitrations, even though SIAC noted on the front page of its statistical report that it had made 25 appointments in ad hoc arbitrations in 2019. SIDRA asked about choices of arbitration institution and found that the five most popular were identical to the five chosen in the Queen Mary survey with the China International Economic Trade Arbitration Commission (CIETAC) being substituted for the Stockholm Chamber of Commerce (SCC).
Historically, CIETAC has not been regarded as a truly international institution but in 2019 it had 617 foreign-related cases, of which 66 were cases where both parties were non-Chinese, representing an 18.2% year-on-year increase. In this regard, it is interesting to note that the SCC had only one third more international cases in 2019 (88) and that 25% of the International Chamber of Commerce’s (ICC) 2019 cases were between parties of the same nationality.
SIAC was the most popular choice for respondents to the SIDRA survey. As the data shows that the majority of SIAC tribunals comprise a sole arbitrator appointed by the institution, the question arises as to whether these are, in fact, the features that attract its commercial users. The SIDRA survey does not ask this question and concentrates instead on parties’ choices of arbitrators for appointment to three-member tribunals.
Other surveys and organisations likewise assume that most arbitrations are put into the hands of three-member tribunals appointed by the parties. During the COVID-19 crisis, many webinars and blogs have also assumed that most arbitrations go to in-person hearings on the merits. Not only do the institutions’ statistics, together with those that they don’t always supply (eg numbers of awards), indicate that full-blown proceedings before three-member tribunals are the exception, they also confirm that there has been an increase in the take-up of documents-only and expedited procedures before sole arbitrators for lower value cases.
For example, the International Chamber of Commerce’s (ICC) Expedited Procedure Provisions, for claims up to $US 2m, applied by direct operation of the ICC Rules in 65 cases and parties opted out of them in just five. In 2019, 36% of the ICC’s arbitrations concerned claims which did not exceed US$ 2m. When called upon to choose the number of arbitrators for a tribunal, the ICC Court chose sole arbitrators in 82% of cases. Overall, 41% of ICC tribunals in 2019 comprised a sole arbitrator.
Meanwhile at the LCIA, which does not have a separate expedited procedure but where 72% of quantified claims were US$ 5m or less and 43% were US$1 m or less, 46% of tribunals comprised a sole arbitrator.
In 2019, the LMAA saw a record number of appointments of sole arbitrators under its Small Claims Procedure, which is largely used for claims below US$100k: 218.
In 2016, in the wake of the Brexit referendum, it was suggested that London would lose its popularity as a seat for international commercial arbitration. Attention was drawn to the ICC’s statistics at the time, which indicated that London was already being chosen less often as a seat in ICC arbitrations.
Not only have the LCIA’s and LMAA’s caseloads proved those pessimists wrong (for the time being at least), so has the ICC itself: in 2019, London was the most popular seat for ICC arbitrations, being designated 115 times. Adding that number to the LCIA’s and LMAA’s caseloads, London-based arbitrations account for 57% of the total number of cases across the six arbitral bodies studied.
Meanwhile HKIAC reported that British arbitrators had the highest percentage of its arbitral appointments by nationality (24.1%).
It is, of course, necessary to keep an eye on the institutions and other organisations which do not feature in the above analyses or so heavily in surveys. Well-established institutions, such as the Deutsche Institution für Schiedsgerichtsbarkeit e.V.(DIS) in Germany and the Vienna International Arbitral Centre (VIAC) in Austria, continue to prosper but their international caseloads remain relatively low. One institution which has experienced quite substantial growth in the last few years is the DIFC-LCIA Arbitration Centre in Dubai, which saw 80 new cases in 2019, up from 64 in 2018. Its link with London may be part of the secret of its success.
In our conclusion last year, we noted that the rise of new centres may require that a new set of arbitral bodies be analysed in future years. The continuing dominance of London and the appearance of four of our five institutions in the SIDRA report's ranking suggest that that time has not yet come. The turmoil of 2020 could, though, change the landscape.
Free trials are only available to individuals based in the UK
* denotes a required field
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial. See our full terms here.
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
James is an arbitration specialist. He has more than 25 years’ experience of ad hoc, trade association, institutional and investment arbitrations as a solicitor in London and Paris, as a former Registrar of the London Court of International Arbitration (LCIA), and as a case assessor for legal costs insurers and third party funders. His background as a lawyer is in international trade, commodities, shipping and insurance.
He trained at Withers in London and then spent four years in the firm’s Paris office. He was admitted as an avocat at the Paris bar (1994 – 2008). Returning to London, he spent more than 13 years at Holman Fenwick Willan in its Trade & Energy group. As Registrar and Deputy Director General of the LCIA in 2008 – 2012, he oversaw the administration of more than a thousand commercial arbitrations and assisted with a review of its Arbitration Rules. He subsequently spent two years at Thomas Miller Legal, assessing and managing a wide range of commercial and investment claims on behalf of insurers and funders. Returning to private practice in 2015, he spent a year in Stephenson Harwood’s International Arbitration group where he assisted on ICC and LCIA arbitrations, principally oil and gas disputes.
James is a Fellow of the Chartered Institute of Arbitrators. At LexisNexis, James works on the Lexis®PSL Arbitration module.
0330 161 1234