Thirdly Edition 2

MARKET COMMENTARY 21

POWERS OF THE TRIBUNAL Whereas previously parties were permitted to agree on the conduct of their arbitral proceedings, wider powers have now been granted to the tribunal, and the parties can now only agree on ‘joint proposals’ for consideration by the tribunal. In other areas, the tribunal’s power has been reinforced. The new rules provide that the parties can agree the seat of the arbitration in writing at any point prior to the formation of the tribunal, however after this point, the prior written consent of the tribunal is needed. COSTS The tribunal has the power to decide that all or part of the legal or other expenses incurred by a party be paid by another party. The parties can no longer agree otherwise, unless they agree before the dispute arises that one or more parties shall pay the whole or any part of the costs, in which case the agreement must be confirmed in writing by the parties after the commencement date (i.e. the date when the tribunal received the Request for Arbitration). The tribunal will base its costs decision on the parties’ relative success and failure in the arbitration – the parties can no longer agree otherwise – and may also take into account the parties’ conduct. The latter provision was implicit in the old rules; however, by making the conduct consideration explicit, the LCIA may improve the efficient conduct of its arbitrations as parties will seek to avoid being penalised on costs. PROCEDURAL RULES Several procedural changes have been made to modernise the rules, for example, allowing the Request and Response to be submitted to the Registrar in electronic form, and to ensure that arbitrations are dealt with in a more time and cost efficient manner. The LCIA Court can now proceed with the arbitration notwithstanding that the Request is incomplete or the Response is missing, and the parties and the tribunal are encouraged to make contact as soon as practicable but no later than 21 days from receipt of the Registrar’s written notification of the formation of the tribunal. Many time periods have been shortened, for instance from 30 to 28 days, however the parties retain the flexibility of agreeing in writing alternative deadlines for the written stage of the arbitration and its procedural timetable. Further improving efficiency, arbitrations can be consolidated into a single arbitration under the new rules, and inactive arbitrations can be discontinued if they have been abandoned by the parties or where all claims have been withdrawn, provided that no party objects within a given period of time. CONCLUSION The new rules seek to improve efficiency in the conduct of the arbitration, to be achieved both through new provisions such as the appointment of an emergency arbitrator, and through other changes to the rules such as the tightening of time limits or allowing documents to be served electronically. While a number of arbitral institutions have revised their rules in recent years, the LCIA is the first to include mandatory provisions on party representation and conduct – perhaps setting a trend which others will follow in years to come.

A version of this article was first published in Kluwer Arbitration Blog, August 2014.

Made with FlippingBook - Online catalogs