The 2021 Rules bring with them a number of key changes that are intended to further promote the fair, efficient, and expeditious conduct of arbitrations and seek to provide clarity to arbitrators and parties.
The key features of the updated 2021 Rules are outlined below.
Additional tools allowing arbitrators to expedite proceedings
The 2021 Rules provide Arbitral Tribunals with additional powers to:
Make an “Early Determination” on any claims, defences, or counterclaims and similar which are manifestly outside the Tribunal’s jurisdiction, manifestly without merit, or inadmissible (Article 22(viii)).
- Limit the length or content of any pleadings, or dismiss the need for written pleadings entirely (Article 14.6(i)).
- Limit the written and oral testimony of any witness (Article 14.6(ii)).
- Dispense with the need for a hearing entirely (Article 14.6(v)).
Although Arbitral Tribunals had wide powers under the 2016 Rules, these express powers are likely to provide comfort to arbitrators and embolden them to take a more active role in efficiently resolving disputes with less fear of a challenge by a recalcitrant party.
Refinement and expansion of the provisions accommodating virtual hearings
Whilst the 2016 Rules always provided the Arbitral Tribunal with the power to conduct hearings by video or telephone conference, or in person, the 2021 Rules now go further and expressly provide that hearings may take place virtually by video conference or conference call, “or using other communications technology” with participants in one or more geographical locations (Article 19.2). This is an especially useful amendment in light of the current global pandemic and the uncertainties associated with it.
Confirmation of primacy of electronic communications and the facilitation of electronically signed awards
Whilst previously a Request for Arbitration (Request) could be submitted either electronically or in paper form, the 2021 Rules now provide that claimants must submit a Request electronically (Article 1.4). Article 4 also provides for electronic communications between parties. In the 2016 Rules, correspondence by registered post was the preferred method of communication.
The 2021 Rules now expressly provide that any award may be signed electronically and/or in counterparts and assembled into a single instrument (Article 26.2). The 2021 Rules also provide that awards will be transmitted to parties primarily in electronic form (but may be in paper form if requested by the parties). In a marked change to the 2016 Rules, the 2021 Rules provide that the electronic copy of an award will prevail where there exists any discrepancy.
Inclusion of provisions addressing the role of a Tribunal Secretary
Article 14a is a new addition to the 2021 Rules and provides express provisions dealing with the role of a Tribunal Secretary.
Broadening the powers of the LCIA Court and the Arbitral Tribunal to order consolidation and the concurrent conduct of arbitrations
Whilst the 2016 Rules did contain provisions permitting the consolidation of proceedings in certain circumstances, the 2021 Rules go further and provide:
- The Arbitral Tribunal the power to order, with the approval of the LCIA Court, the consolidation of one or more arbitrations into a single arbitration where the arbitrations “arise out of the same transaction or series of related transactions” (Article 22.7(iii)). This is a marked contrast to the 2016 Rules which only provided such power to the Arbitral Tribunal in arbitrations arising from the same, or a compatible, arbitration agreement. This same power is also afforded to the LCIA Court (Article 22.8(ii)).
- The LCIA Court with the same power afforded to an Arbitral Tribunal to order the consolidation of multiple arbitrations. This now allows parties to agree or make an application for the LCIA Court to order consolidation prior to the formation of the Arbitral Tribunal.
- The Arbitral Tribunal with the power to order that two or more arbitrations be conducted concurrently, where the proceedings comprise the same Arbitral Tribunal.
Other notable amendments in the 2021 Rules include:
- The fact that parties may have unilateral communications with the DIFC-LCIA Registrar in respect of “administrative matters.” This is a tightening of the previous Article 13.4 of the 2016 Rules.
- The 2021 Rules providing that an Arbitral Tribunal should strive to deliver its award within three months of the last submission from the parties (Article 15.10), a notable change to the 2016 Rules which encouraged a Tribunal to deliver its final award “as soon as reasonably possible.”
- A change to the timescale for the LCIA Court to appoint a Tribunal where the Respondent fails to deliver a Response (Article 5.6). This has decreased from 35 days to 28 days.
About Reed Smith’s international arbitration practice
Reed Smith is strongly positioned to provide the highest level of service in dispute resolution to our clients. With offices in the world’s leading arbitration centers, including London, Paris, New York, Singapore, Hong Kong, Dubai, Miami, and Houston, we have one of the largest and most diverse international arbitration practices in the world, with the ability to represent clients in every significant arbitral center and seat around the globe.
We are a recognized leader in international arbitration, and are ranked in the elite GAR 30, Global Arbitration Review’s ranking of the world’s leading international arbitration practices. We have substantial experience representing both claimants and respondents, and a strong track record of obtaining successful results. Our deep knowledge of industry sectors including energy, natural resources, life sciences, transportation, telecoms, insurance, and banking enables us to understand the industry-specific factors and environments affecting our clients’ disputes. This combination of deep arbitration experience, our lawyers’ advocacy skills, and industry knowledge gives us a competitive advantage when representing our clients.
Updates on the go
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Client Alert 2021-030
