2020 LCIA Arbitration Rules: What has changed and what arbitral users need to know

We discuss seven key changes and one notable omission incorporated into the 2020 LCIA Rules (the “Rules”) from the 2014 LCIA Rules.

1. Summary assessment of claims: The Rules now provide an express provision which grants tribunals power to make an early determination and dismiss any claim or defence which is manifestly without merit, inadmissible or outside the tribunal’s jurisdiction.  This follows changes made by other Arbitral centres (most notably in Singapore and Hong Kong). Whilst Article 14 of the 2014 LCIA Rules provided an implicit power for early determination of claims, the express provision now contained in Article 22.1(viii) of the Rules will represent a welcome relief to arbitral users that are concerned to ensure there is an effective mechanism to summarily dismiss meritless claims and defences (especially in respect of debt claims).  
2. Data protection: The Rules now require tribunals to consider with the parties (and where appropriate the LCIA) at an early stage whether it is appropriate for parties to adopt any: (a) information security measures to protect the information shared in the arbitration; and (b) means to address the processing of personal data produced or exchanged in the arbitration in light of any applicable data protection regimes.  The Rules also grant tribunals and the LCIA power to issue any appropriate directions regarding information security or data protection which shall be mandatory on the parties. These changes follow a long debate over many years with the ICCA and IBA recently joining forces to create a roadmap for data protection; its public consultation closing on 30 June this year.
3. Electronic communications/technology: The Rules provide clear instructions to parties that filings and communications should be made electronically.  It also grants tribunals the power to convene hearings as it sees fit including by way of video technologies if it considers that appropriate. This is a welcomed development not only in the context of the Covid-19 pandemic where convening parties to an arbitral hearing may not be possible due to social distancing measures and travel restrictions, but also given the arbitration community’s push for more climate friendly arbitrations. A committee organised by the Campaign for Greener Arbitrations recently estimated that if all paper/bundles, courier and travel services were eliminated from an average arbitration that could result in over 51,000 kg CO2e per arbitration being conserved (being around ten times the average carbon footprint of every individual in the UK).
4. Awards to be rendered within three months: The 2014 LCIA Rules provided that tribunals should issue their final awards as soon as reasonably practicable following the last submission form the parties. The 2020 LCIA Rules now provide that tribunals should endeavour to do so no later than three months following the last written or oral submission made during the proceedings.
5. Composite requests: There is now provision for a clear mechanism for the filing of one arbitration in respect of connected proceedings (eg in respect of connected disputes under multiple contracts).  Following the decision in A v B [2017] EWHC 3417 (Comm), the English courts determined that a single arbitration could not be commenced in respect of disputes under multiple contracts (i.e. an arbitration needed to be filed in respect of each contract and then the claimant needed to apply to arrange for each arbitration to be consolidation/joined into one arbitral reference). The decision whether the multiple disputes will then be resolved in one reference will be determined by the tribunal and/or LCIA. This amendment will be welcomed by parties especially those that operate in chains of contracts such as supply agreements and/or construction and IT projects where there may be multiple connected disputes between two or more parties under more than one agreement.
6. Use of Tribunal Secretaries: The use of tribunal secretaries has been a debated topic in arbitration for years.  It can provide parties with an effective mechanism to reduce the costs incurred by tribunals by allowing a secretary to undertake administrative tasks. But there has been reported cases where tribunals have inappropriately over-delegated matters to tribunal secretaries. The LCIA issued guidance in 2017 regarding the role of tribunals and its inclusion in the Rules of a clear framework which tribunals should work to where tribunal secretaries are appointed (including that as to conflicts and duties of confidentiality) will be welcomed by arbitral users.  
7. Fees: The Rules have increased the fees for filing an arbitration from £1,750 under the 2014 LCIA Rules to £1,950. Whilst in many cases this will represent a greater saving than parties incur when filing fees before the English High Court (which charge a filing fee of £10,000 for cases worth >£200,000), parties will still need to bear the LCIA’s and tribunals’ costs of the proceeding. In addition, the maximum hourly rate which a tribunal member can charge has been increased from £450 per hour under the 2014 LCIA Rules to £500 per hour.
8. Opportunity missed on emergency arbitrators: One opportunity that has not been addressed in the Rules was to clarify matters concerning emergency arbitrators and whether parties are still permitted to seek court relief if urgency permits. Whilst the adoption of emergency arbitrator regimes by various arbitration centres have been welcomed by arbitral users, there is still a debate as to the effectiveness of this process in certain jurisdictions and the speed to obtain such emergency relief. Some parties therefore still prefer the bite of a Court injunction in aid of arbitration (such as under s44 English Arbitration Act 1996). However, uncertainty has arisen following the decision in Gerald Metals v Timis [2016] EWHC 2327 (Ch).  The Court in that case rejected an application for injunctive relief on the grounds that the applicant had the ability to obtain such relief under the emergency arbitrator provisions provided under the 2014 LCIA Rules and that the matter was not sufficiently urgent that the Court should step in to exercise its powers under s44 Arbitration Act 1996.  Parties who wish to have the option of seeking court injunctive relief should continue to provide for this in their arbitration agreements.  For more information about this, see the section on freezing injunctions here.

For more information about: 
•    what arbitration is, please see here.  
•    what benefits arbitration may provide parties in a post coronavirus and Brexit world, please see here.

Please do not hesitate to contact the authors of this article for more information about arbitration and the changes made in the 2020 LCIA Rules.