A Guide To LCIA Arbitration

The London Court of International Arbitration (LCIA) is one of the world’s leading centres for resolving commercial disputes. Over 80 per cent of arbitrating parties who use the LCIA are not of English nationality.

This reflects London’s overall position as the preferred forum for international dispute resolution and the fact that English law remains the top choice for the resolution of international disputes.

LCIA arbitration is governed by the LCIA Rules 2020. The LCIA Secretariat, based at the International Dispute Resolution Centre (IDRC) in London is responsible for the day-to-day administration of all disputes referred to the LCIA. They ensure that arbitrations move forward at pace and costs are kept within reasonable boundaries. This set-up has proved effective.

The latest report shows that the median length of proceedings is 16 months, the time for Arbitrators to produce an award is three months, and median costs are $97,000 (the lowest median arbitration costs out of all leading arbitration institutions). Smaller matters are resolved particularly quickly, with over 70 per cent of cases with an amount in dispute under $1 million being completed within 12 months.

Unless the parties agree or the Tribunal determines otherwise, the default seat of arbitration will be in London and English law, including the Arbitration Act 1996 will apply. Although the parties may have agreed to a different law regarding the governing of their obligations under the Arbitration Agreement, the LCIA Rules determine that the law that applies to an Agreement will be the law applicable at the seat, unless the parties agree otherwise in writing.

This has also been the recommendation of the Law Commission which has recently reviewed the Arbitration Act 1996.

What are the key features of LCIA Arbitration?

If you plan to commence arbitration in the LCIA, you must be aware of the following:

The appointment of Arbitrators is by the LCIA Court; however, parties can agree to make a nomination.
There is a presumption in favour of a sole Arbitrator.
A Tribunal can be quickly put together or an emergency Arbitrator appointed if required.
Arbitrations can be consolidated in certain circumstances.
Early determination of claims/counterclaims/issues are available.
Security for claims and costs is available.
Appeal rights are waived unless otherwise agreed.
Costs are calculated without regard to disputed amounts.
There are staged advance payments for costs.
Proceedings and awards are confidential.

What do Claimants and Defendants need to do before an LCIA Arbitration?

The following is a step-by-step guide to bringing an arbitration in the LCIA:

Claimants

Check the arbitration provisions in the contract to see if there is a clause covering LCIA arbitration. Also check any clause amendments which may cover the selection of an Arbitrator, the type of dispute that can be referred to arbitration, and rights of appeal.
Check that the claim is not statutory or contractually time-barred.
Consider whether interim provisions are required to protect your position, for example a freezing injunction.
Begin case preparation, including locating documents and identifying those that are privileged, collecting witness statements, and retaining an expert witness.
If the clause allows parties to nominate an Arbitrator, identify someone you prefer and have funds available for advance payments of their costs.

Respondent

Check the Arbitration Agreement to ensure the dispute that has led to the claim falls within the Agreement’s scope. If there is a potential jurisdictional issue, you will need to prepare your challenge.
Identify potential counter claims or cross claims.
Examine the claim to see if it is time-barred.
Apply for interim measures such as security for costs.
Prepare your defence case.

Who do I contact in the LCIA?

Prior to the Tribunal being formed, all communications should be sent to the Registrar and the other party must be copied in unless the matter is purely administrative.

An Arbitrator who is participating in the selection of the Presiding Arbitrator can consult with any party to gain insights into the candidate’s suitability.

Unless the Tribunal decides otherwise, once the Tribunal is formed, all communications must take place between the parties and the Tribunal, with the Registrar copied in.

How is arbitration in the LCIA commenced?

To commence an Arbitration, the Claimant must serve a Request for Arbitration along with the prescribed fee. The Respondent serves their Response and the Tribunal is then appointed.

The Request and Response set out:

The dispute/s to be arbitrated, and
The parties’ respective cases.

How is the award made?

Article 15.10 of the LCIA Rules 2020 provides that the Tribunal:

“shall seek to make its final award as soon as reasonably possible and shall endeavour to do so no later than three months following the last submission from the parties (whether made orally or in writing), in accordance with a timetable notified to the parties and the Registrar as soon as practicable (if necessary, as revised and re-notified from time to time). When the arbitral tribunal (not being a sole arbitrator) establishes a time for what it contemplates should be the last submission from the parties (whether written or oral), it shall set aside adequate time for deliberations (whether in person or otherwise) as soon as possible after that last submission and notify the parties of the time it has set aside.”

The award will be made in writing and set out the reasons for the Arbitrator/s decision. Separate awards can be made at different times concerning dissimilar matters.

In summary

Commencing arbitration in the LCIA requires a thorough knowledge of the rules and guidance, especially when the issues are related to cross-border matters. Instructing an experienced Arbitration Solicitor will ensure the process runs smoothly and your best interests are protected.

To discuss any points raised in this article, please call us on +44 (0) 203972 8469 or email us at mail@eldwicklaw.com.

Note: The points in this article reflect sanctions in place at the time of writing, 2^nd May 2024. This article does not constitute legal advice. For further information, please contact our London office.