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LCIA proposes guidelines for arbitration parties' legal representatives as part of revised rules

Out-Law News | 25 Feb 2014 | 5:35 pm | 2 min. read

New rules proposed for arbitrations heard by the London Court of International Arbitration (LCIA) would incorporate guidelines for parties' legal representatives for the first time.

The guidelines are set out in an annex to a new draft of the LCIA Arbitration Rules (28-page / 351KB PDF), to be discussed by the LCIA Court at its next meeting in May. If approved the revised rules, which will replace a version that came into force in 1998, are expected to come into force later this year.

International arbitration expert John Gilbert of Pinsent Masons, the law firm behind Out-Law.com, said that the idea of imposing written guidelines on party representatives had prompted considerable debate in the international arbitration community since it was first proposed by the International Bar Association (IBA) in May 2013.

"The idea of imposing written guidelines on party representatives in international arbitration is a new one and is not universally welcomed in the arbitration community," he said. "The strong views on the subject, both for and against, expressed by leading practitioners at the recent IBA Arbitration Day in Paris suggests that this will be an issue on which there is a great deal of debate as the draft is reviewed and discussed over the coming months."

The IBA states that its guidelines are "inspired by the principle that party representatives should act with integrity and honesty", and should not take part in any activities designed to "produce unnecessary delay or expense" or obstruct the arbitration proceedings. The LCIA's draft includes a requirement on each party to ensure that its representatives comply with the guidelines and a mechanism through which complaints in relation to alleged breaches of the guidelines may be resolved.

Other changes to the rules proposed by the LCIA include additional provisions to deal with multi-party arbitrations and, in particular, the consolidation of two or more arbitrations. The drafting committee has also proposed the incorporation of an emergency arbitrator procedure into the LCIA's rules for the first time; although Gilbert noted that brackets in the draft suggested that this change was "still up for discussion in principle".

The draft rules also place more emphasis on the arbitral tribunal's duty to conduct the arbitration "expeditiously", and require candidates for appointment to a tribunal to confirm that they are "ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious conduct of the arbitration".

"Although at first glance the proposed amendments to the rules seem relatively modest, there are some significant developments and it is clear that a thorough review of the rules has been undertaken with international competition in mind," Gilbert said.

Arbitration is a system of formal dispute resolution for a final and binding decision from a neutral arbitral tribunal. It is often used as the primary means of dispute resolution by global businesses, particularly in disputes with sovereign states, as it is seen as more likely to be free from political interference and it allows for greater confidentiality than open courts.

According to the latest available figures, some 265 cases were referred to the LCIA in 2012 with sums in dispute worth several billions. Over 10% of the claims the LCIA dealt with in 2012 were for sums in excess of $20 million. Arbitration cases are global in nature and can be brought in any number of arbitration courts, and claims from over 30 countries were processed in London during 2012 alone.

The LCIA has proposed changes to its rules shortly after the revision of rules used in other international courts, such as UNCITRAL and the International Chamber of Commerce (ICC) rules. London, Paris, New York and Geneva have traditionally been seen as the main 'seats' for international arbitration, but Singapore and Hong Kong are fast emerging as alternatives.