The LCIA Rules 2014 - one year on

The LCIA Rules 2014 - one year on

londonskyline

A year on from the introduction of the LCIA’s 2014 Rules, James Freeman, counsel in the international arbitration group at Allen & Overy, considers the rules and the reception they have received from the arbitration community.

 

What were the main changes brought in by the 2014 rules?

The basic structure of the previous LCIA Rules, dating from 1998, remains. The amendments broadly fell into two categories. The first category involved changes designed to bring the rules up to date with contemporary arbitration practice, in common with the amendments made by other arbitration institutions to their rules over the past five years. The best example of this is the introduction of an emergency arbitrator procedure in the LCIA Rules, art 9B. The second category consisted of more innovative changes. The guidelines for counsel conduct are one example. Another good example is the requirement in art 15.10 for a tribunal to set a timetable for it to its render award-a powerful tool for addressing one common complaint--the time that tribunals take to produce awards.

What did the arbitration community make of the new rules?

The biggest talking point has been the introduction of a rule requiring parties to ensure that their counsel comply with a set of guidelines set out in a new annex to the rules. While the guidelines were preceded by the similar International Bar Association (IBA) guidelines on Party Representation in International Arbitration, the LCIA is the first arbitration institution to have introduced such guidelines in its rules.

Some in the arbitration community have been critical. The previous president of the Swiss Arbitration Association described the IBA's guidelines as 'yet another opportunity to waste time and money on procedural skirmishes'. However, his successor has suggested that the LCIA and IBA did not go far enough, and has floated the idea of a global council regulating a global set of ethical rules for counsel conduct in international arbitration. In Switzerland, at least, the reception can be said, therefore, to have been mixed. But anecdotal evidence suggests broad support overall for the LCIA's initiative.

How have the rules 'bedded down' across the year?

The LCIA already had a good reputation as an efficient institution for administering arbitrations. Happily, it feels like 'business as usual' when conducting an arbitration under the new rules. One notable impact of the new rules has been on the drafting of arbitration clauses. To the dismay of corporate and arbitration lawyers alike, it was previously necessary to draft lengthy bespoke provisions catering for the possibility of consolidating parallel arbitrations and joining new parties to existing arbitrations, because arbitration rules did not cater for this.

Improved consolidation and joinder provisions in art 22 of the rules have enabled substantially more streamlined provisions to be adopted in arbitration agreements, leading to considerable cost savings for transacting parties.

Will the 2014 rules will be 'tweaked' and if so in what areas?

Relatively few difficulties with the new rules have been encountered. One talking point has been art 25.3 which, some have suggested, prevents a party from seeking interim relief from a court, after the arbitral tribunal has been constituted, without the tribunal's consent. That would imply that the other party would be informed, which would make ex parte interim relief from a court impossible to obtain in practice in those circumstances. It seems unlikely, however, that this effect was intended, and views differ as to how this provision should be interpreted.

What will the future bring?

Uniquely, the rules provide for a choice, in urgent cases, of an emergency arbitrator procedure or expedited formation of the tribunal. It will be interesting to see which proves more popular. My money is on the latter. A fully constituted tribunal, capable of rendering enforceable awards from the start and empowered to resolve any aspect of the dispute finally, is a more powerful body than an emergency arbitrator.

Find our previous post on the 2014 Rules here and you can download our guide to the rules here.

Subscription Form

Related Articles:
Latest Articles:

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author: