London’s [video] calling: What the new LCIA Arbitration Rules mean for you and virtual hearings

Nov 2020


In a well-timed update, the new LCIA Arbitration Rules effective 1 October 2020 cater to the brave new world of virtual hearings, increased electronic communications and cyber-security in which we find ourselves, in part as a result of the COVID-19 pandemic.  Here we explore the key changes and what they mean for you…

Electronic communications are the new norm

In 2017 the ICC published a report Information Technology in International Arbitration highlighting the importance of effectively using technology in arbitrations and there is no doubt that the use of technology will only increase as a result of COVID-19.

There has been an increased willingness to embrace technology as a key part of arbitral proceedings.

The LCIA rule changes:

  • endorse email or other electronic communication as the default form of communication;
  • provide that the commencement date of arbitration will be when the written request for arbitration is received electronically by the Registrar; and
  • allow an arbitral award to be signed electronically unless agreed or directed otherwise.

These are significant because there is now an express requirement that electronic communications be used in arbitrations.  Previously, electronic communications were considered a means of communication under the LCIA rules, but not the primary or only form of communication.

Other arbitral rules, including the SIAC Rules and the ICC Rules still simply provide that electronic communications may be used, rather than providing for the primacy of electronic communication in arbitral proceedings.  It will be interesting to see whether other arbitral institutions follow suit with similar amendments to enhance the primacy of electronic communications under their rules in the future.  We anticipate that non-electronic communications will become defunct (if not already) in most arbitrations. The primacy of electronic communications is becoming widely accepted as convention.  Given this acceptance, it’s therefore unlikely we’ll see a rush to amend other arbitral rules, but it’s possible such amendments may eventually be made over time for completeness.


Virtual hearings 

The changes also provide that the arbitral tribunal has the fullest authority to establish the conduct of any hearing, including specifically that it may take place virtually by conference call, videoconference, using other communications technology or a combination of these methods.

We expect the express introduction of these forms of virtual hearings will place additional expectations on practitioners to suggest ways of conducting hearings harnessing technology appropriately. For example, parties will likely need to provide the tribunal with draft timetables which account for parties’ in different locations and time zones, and using different platforms.  Practitioners will need to be well versed in the use of different or multiple platforms, conduct testing, and be adequately prepared for virtual hearings.


Early determination

In line with the early dismissal and early determination procedures that have been available under the SIAC and HKIAC rules for some time, the updated LCIA Rules provide the tribunal with a new power intended to help expedite proceedings.

Tribunals may now determine that any claim, counterclaim, cross-claim or defence is:

  • manifestly outside the jurisdiction of the tribunal; or
  • inadmissible or manifestly without merit,

and issue an “Early Determination” order or award to that effect.

While the tribunal may exercise the power either on the application by a party or by its own initiative, in either case the tribunal must first give parties a reasonable opportunity to state their views.  While this change provides the tribunal with the express power to summarily dismiss unmeritorious claims, it will be interesting to see whether arbitrators are willing to exercise this power in practice.  Across the various arbitral institutions, tribunals have historically appeared reluctant to exercise such powers, particularly when they were considered to exist impliedly in inherent case management provisions.  This was perhaps in light of the perceived risk that such awards were more likely to be challenged.  In 2019, under the SIAC Rules there were eight reported early dismissal applications, of which five were allowed to proceed, and only one application was granted.  We expect to see an increase in the number of early determination applications made and granted as express powers of this nature become more common across institutions, and tribunals become more comfortable in exercising these powers.


Concurrent arbitrations

The amendments to the LCIA rules facilitate the commencement of multiple arbitrations in wider circumstances than previously contemplated. Joinder and consolidation of proceedings is not a new concept and is available under many other rules such as the SIAC Rules and the ICC Rules.

However, the LCIA rules previously provided that unless multiple arbitrations were taking place under the same arbitration agreement or compatible agreements, provision for joinder or consolidation had to be expressly provided for in the arbitration clause itself.  The new language in the LCIA Rules provides that consolidation may be ordered by the tribunal in respect of ‘the same disputing parties or arising out of the same transaction or series of related transactions.’  This language should provide parties with the opportunity to argue the meaning of this phrase, including as to its potential breadth.  The LCIA has followed HKIAC’s lead, with similar changes made under the HKIAC rules in 2018.  Consolidation allows for one arbitration to be pursued for some typical disputes such as major financial transactions and construction projects involving multiple parties and contracts.  However, it may be optimistic that all parties would agree to a single arbitration in the context of multi-party, multi-contract disputes.


Legislative compliance: Data protection and ABC-type requirements

The updated rules expressly provide that any processing of personal data by the LCIA is subject to applicable data protection legislation.  The rules also contemplate the LCIA and the tribunal considering if it is appropriate to adopt any specific information security measures in the context of individual arbitrations, and issuing directions addressing information security or data protection, which would be binding on the parties.  While on the one hand, this update can be viewed as bringing the LCIA Rules in line with the times, on the other hand, it may offer parties additional comfort in the context of particularly confidential or sensitive subject matter.

The new rules also specify that any dealings between a party and the LCIA will be subject to any applicable requirements relating to bribery, corruption, terrorist financing, fraud, tax evasion, money laundering and/or economic or trade sanctions.  The LCIA may refuse to act on any instruction or accept / make any payment (without needing to provide reasons) if it determines that doing so may involve such activities, or breach any law, regulation or other legal duty which applies to it.  Again, these changes may provide some parties with added comfort or confidence in using the LCIA Rules.


What do the changes mean for you?

The changes reflect an increased expectation of efficiency in arbitral proceedings as a result of, amongst other things, technological advancement and COVID-19.  The key take-aways for practitioners and parties are:

  • electronic communications are the new norm – upskill yourself in the use of virtual hearing platforms;
  • consider whether the tribunal’s early determination powers or the use of joinder or consolidation may expedite or be relevant to your arbitration; and
  • have comfort in knowing that confidential and sensitive information will be appropriately dealt with, and anti-bribery and anti-money laundering standards will be upheld by the LCIA.



Acacia is a Senior Associate in KWM’s Perth office and has previously worked in KWM’s Hong Kong office too. Acacia’s practice includes various forms of dispute resolution, and she will soon be undertaking a litigation deep-dive, on a fixed-term appointment as a Registrar of the Supreme Court of Western Australia. Acacia will return to KWM and the world of international arbitration in May 2021.

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