The London Court of International Arbitration (LCIA) has updated the arbitration rules by adapting progressive new rules which mostly reflect the growing usage of technology in arbitration proceedings.
The London Court of International Arbitration announced the changes this month. However, the new rules will not be taking effect until 1 October and will only apply to arbitration proceedings that have been commenced after 1 October. The London Court of International Arbitration stated that these rules include "recent good practice" that has been established in the pandemic. The last change in arbitration rules was made in 2014.
Prior to these changes, the broad discretion arbitral tribunals had to conduct arbitrations expeditiously. Also, the evolving nature of arbitration, especially in terms of technology usage in hearings and in other proceedings were not reflected in the arbitration rules in the changes made in 2014. These procedural issues are addressed in the new arbitration rules. The 2020 rules aim to improve the efficiency of proceedings. They also compromise provisions which deal with data protection, the increasing technology usage in arbitral hearings, and information security.
The updates made by the London Court of International Arbitration provides a more clear approach to international arbitration. The complications arising from procedural issues which include the electronic communication methods are aimed to be clarified. These new regulations can also be interpreted as a sign of desire by the major institutions to place technology to a greater extent in order to move forward.
The rules suggest that the virtual hearings due to the Covid-19 outbreak have proven themselves to the arbitration community. However, the benefits of in person hearings are still in place and these rules do not prevent in person hearings from taking place.
Amidst the memorable amendments, LCIA introduced new tools that will permit arbitrators to facilitate proceedings, including explicit references to the possibility of early dismissal determination. The amended Article 14.6 lays out express tribunal powers that are aiming to make the arbitration proceedings fairer, and more efficient including those are through the usage of technology. The new provisions are expanded in a way to accommodate the use of virtual hearings and electronic communications. They also confirm the facilitation of awards that have been signed electronically.
With these changes, all of the responses to the requests are only to be submitted with an electronic form to the registrar. In order to file or deliver a request or a response this way, the registrar's prior permission will be required. These provisions reflect the attempts of the London Court of International Arbitration to deliver a more innovative process in international arbitration. They also enforce electronic communication methods as the preferred mode for communicating.
These new rules are expected to be interpreted in accordance with the English laws. The provision dealing with places of hearings, applicable law and the seat of arbitration are contained in Article 16.
Despite there being a tightening in arbitration procedures towards arbitrators, there is no change in the expected standards of arbitrators relating to the disclosure of third-party funding.
Another aspect where there have been changes is in the award process. With the new provisions, an award can be signed via electronically and/or in equal forms and be assembled into a single document, unless the parties or the tribunal agree otherwise in contrast to the previous rules where an award process had to be signed in a paper form. The tribunals have to decide on their final awards as soon as reasonably practicable and attempt to do so no later than three months of the last submission date.
Data protection and regulatory issues have also been introduced within the revised rules. They include the EU's General Data Protection Regulation (GDPR) which was enforced back in 2018. This reference to data protection makes the London Court of International Arbitration the first major arbitration institution to have provisions on data protection. Parties to arbitration proceedings now will be subject to a duty to look for a general confidentiality commitment from all parties that are involved in the arbitration proceeding. In consultation with the London Court of International Arbitration and with the parties, the tribunal will also be obliged to consider whether adopting information security measures would be appropriate.
Among all the new provisions introduced by the LCIA, a new "schedule of arbitration costs" is also published. The fees are generally increased. The previous hourly tribunal rate will increase from £450 to £500 and the administrative costs of the LCIA's secretariat will also increase. These changes will also have effect from 1 October.