On 26 May 2020, the London Chamber of Commerce and Industry (the “LCCI”) expanded its arbitration and mediation services and launched the London Chamber of Arbitration and Mediation (the “LCAM”).
In the past, arbitration clauses containing a reference to the “London Chamber of Commerce” were referred to the London Court of International Arbitration (the “LCIA”) based on the fact that the LCIA used to be part of the LCCI.[1] Moreover, the former Article 6.02 of the By-Laws of the LCCI provided that if an arbitration agreement referred to the LCCI for the appointment of an arbitrator, the appointment would be made either by the President of the LCCI or the LCIA.[2]
As of 28 November 2016, the By-Laws of the LCCI were amended. As a result, references to the “London Chamber of Commerce”, for appointment of arbitrators or for arbitration, shall be referred to the “London Chamber of Arbitration”, which was rebranded as the LCAM, irrespective of the date of the contract (Articles 6.01 and 6.02):[3]
ARBITRATION
6.01 In the case of a dispute referred to the Chamber for arbitration under the rules for the time being of the Chamber, the arbitration shall be conducted by the London Chamber of Arbitration (LCA) under its rules for the time being, and reference to the rules of the Chamber shall be taken to be reference to the rules of the LCA.
6.02 In the case of a dispute referred to the Chamber for the appointment of an arbitrator by the Chamber or by the President of the Chamber, the appointment shall, at the discretion of the President, be made either by the President or by the London Chamber of Arbitration (LCA) in accordance with its rules.
Thus, the LCIA no longer accepts Requests for Arbitration based on arbitration agreements referring to the “London Chamber of Commerce”. These disputes are therefore referred to the LCAM.
The LCAM’s sets of arbitration rules – the standard LCAM Arbitration Rules and the Expedited Arbitration Rules – came into force in June 2020, aiming to provide innovative, speedy and cost-effective services to resolve commercial disputes.
The LCAM Arbitration Rules were updated for the first time in June 2021. While the changes were modest overall, the possibility for a party to file claims arising out of more than one contract in one Request for Arbitration was a significant innovation.[4]
On 1 September 2022, the LCAM released its revised Arbitration Rules. At the heart of its new Rules, the LCAM seeks to put in place “the four E’s” of arbitration that stand for Economy, Efficiency, Expediency and Enforceability, by providing a faster, cheaper and reliable process for its users.
The 2022 LCAM Arbitration Rules
The new 2022 LCAM Arbitration Rules reflect the current trends of arbitration and subtly depart from its previous version of 2021.
The new rules essentially maintained the provisions regarding:
- consolidation of multiple proceedings;[5]
- joinder of third parties;[6]
- request for further details;[7] and
- early dismissal of unmeritorious claims.[8]
They also maintained the provision on virtual hearings allowing hearings “by telephone conference or by video conference, or by a combination thereof” (Article 28.2).
Some new features of the 2022 edition are worth highlighting, however.
Article 4: Fixed Time Limit to Answer a Request for Arbitration in LCAM Proceedings
Article 4.1 of the 2022 LCAM Arbitration Rules now expressly provides that the Answer to the Request for Arbitration must be filed within 28 days from the commencement date of the arbitration and shall include:
- any objections concerning the existence, validity or applicability of the arbitration agreement(s);
- an admission or denial of the relief sought in the Request for Arbitration;
- a preliminary statement of any counterclaim(s) or set-off(s);
- comments on the number of arbitrators and the seat of arbitration; and
- if applicable, the name, address, telephone number, facsimile number and email address of the arbitrator appointed by the Respondent.
Under the previous version, the time limit for the Answer was determined by the LCAM Secretariat after receipt of the Request for Arbitration.
Article 6: Encouraging Mediation in LCAM Proceedings
Article 6.1 of the 2022 LCAM Arbitration Rules includes a new provision with the objective of encouraging parties to attempt mediation to resolve the dispute before or during an ongoing arbitration:
Article 6: Mediation
6.1 At any stage either before or following the filing of a Request for Arbitration, the Parties may attempt in good faith to resolve the dispute through mediation, including in accordance with the LCAM Model Mediation Procedure. Any settlement reached may be referred to the Arbitral Tribunal to be made a consent award on agreed terms.
The mediation proceedings may be administered under the LCAM Model Mediation Procedure that came into force on 1 September 2022.
A survey conducted by the LCAM and Herbert Smith Freehills in 2021 revealed that mediation during arbitration is particularly effective. Half of the mediators with experience of mediation in arbitration reported that they successfully settled at least 70% of their cases via mediation. Out of the surveyed mediators, the majority had rates of over 80% in 2019 and 2020.[9] An additional 17% of mediators reported a success rate between 50% and 70% of their cases. Thus, two-thirds of the surveyed mediators responded that they were more likely to settle the cases with mediation in arbitration.[10]
Article 42: Correction and Interpretation of LCAM Arbitration Awards
Under the 2022 LCAM Arbitration Rules, parties no longer have the possibility to request the interpretation of “a specific point” of the final award. The Parties’ right to request corrections of clerical, typographical or computational errors remains unchanged, however (Article 42):
Article 42: Correction and Interpretation of an Award
Within 28 working days of receiving an award, a party may, upon notice to the other party, request that the Arbitral Tribunal correct any clerical, typographical or computational errors in the award. If the Arbitral Tribunal considers the request justified, it shall make the correction within 30 days of receiving the request.
Appendix II: Schedule of Costs in LCAM Arbitrations
The administrative and arbitrator fees remain the same under the 2022 LCAM Arbitration Rules (the last change was in 2021).
The fees vary according to the claim value and have slightly increased since 2020 (Article 4.1 of Appendix II):
Arbitrators are paid on an hourly basis depending on the amount in dispute (Article 2.1 of Appendix II):
Obligation to Disclose Potential Conflicts of Interest in LCAM Arbitrations
A notable feature of the LCAM Arbitration Rules is the imposition of pre- and post-appointment disclosure on selected arbitrators.[11] Prior to appointment and during the arbitration, arbitrators must disclose any circumstances which may give rise to justifiable doubts as to his/her impartiality or independence in the eyes of the parties.
Like the 2021 Rules, the 2022 LCAM Arbitration Rules impose on any person appointed as arbitrator an obligation to sign and submit a statement of impartiality, independence and availability (Article 14.2):
Article 14: Impartiality and Independence
14.2 Before being appointed as an arbitrator, a person shall sign a declaration of impartiality and independence and shall disclose any circumstances which may give rise to justifiable doubts as to their impartiality or independence in the eyes of the parties. If the person is appointed as an arbitrator, they shall submit to the Secretariat a signed statement of impartiality, independence and availability disclosing any circumstances which may give rise to justifiable doubts as to that person’s impartiality or independence in the eyes of the parties, and confirming that they are ready, willing and able to devote sufficient time, diligence and industry to ensure the expeditious conduct of the arbitration and the production of the award. The Secretariat shall send a copy of the statement of impartiality, independence and availability to the parties and the other arbitrators.
Such a provision is aligned with the seminal decision of the Supreme Court of the United Kingdom (the “Supreme Court”) in Halliburton Company v. Chubb Bermuda Insurance Ltd [2020] UKSC 48 (“Halliburton v. Chubb”), which called into question (i) whether the arbitrator’s acceptance of multiple appointments concerning the same or overlapping subject matters with only one common party can give rise to justifiable doubts; and (ii) whether the arbitrator can accept multiple subsequent appointments without disclosure.[12]
In Halliburton v. Chubb, the appointed chairman, Mr. Kenneth Rokison KC, was later appointed in another arbitration involving Chubb whose underlying facts were the same. The chairman did not inform Halliburton about the new appointment.[13] When Halliburton discovered the multiple appointments, it tried to disqualify Mr. Rokison.[14]
On the first issue, the Supreme Court clarified that multiple appointments related to the same facts may be sufficient to give rise to an apparent bias. The apparent bias, however, was subject to the relevant custom and practice of the specific field of arbitration (for example, maritime, sports, or commodities arbitrations, where multiple appointments are part of the process that is known to and accepted by the participants).[15]
On the second issue, the Supreme Court concluded that arbitrators have a legal duty, under English law, to disclose facts and circumstances that might reasonably give rise to apparent bias, including multiple appointments.[16]
Based on the above, the Supreme Court found that Mr. Rokison breached his duty by failing to disclose his second appointment to Halliburton by the time of his acceptance.[17] The Supreme Court was, however, mindful about the nuances of different fields of arbitration which could provide an exception to the duty of disclosure.[18]
Ultimately, however, the Supreme Court decided that the breach was not sufficient to remove Mr. Rokison from the arbitration between Chubb and Halliburton.[19]
Therefore, the ongoing duty of disclosure gives certain clarity on the extent to which an arbitrator is required to disclose his/her appointments during an arbitration.
LCAM Advisory Board and Panel of Arbitrators and Mediators (Appendix I: Organisation)
The LCAM’s Advisory Board is composed by one chairperson, a maximum of three vice chairpersons, and a maximum of 12 additional members (Article 3 of Appendix I).
The LCAM’s Advisory Board is appointed by the Board of Directors of the LCCI for a three-year term, which may be extended for one further three-year period. Members of the Advisory Board are not prevented from being appointed as arbitrators in arbitrations administered by the LCAM (Article 4 of Appendix I).
At least three members must be present in the deliberations which are taken by majority. The chairperson, or a vice chairperson, may take decisions on behalf of the Advisory Board in urgent matters (Article 7 of Appendix I).
Under the 2022 LCAM Arbitration Rules, the Advisory Board has the following powers:
- to decide whether the LCAM manifestly lacks jurisdiction over a dispute (Article 10.1(i));
- to decide whether the case shall be dismissed if the Advance on Costs is not paid pursuant to Article 46 (Article 10.1(ii));
- to decide whether two or more arbitrations should be consolidated (Article 11.1);
- to decide on the number of arbitrators (Article 12.1);
- to appoint and confirm arbitrators pursuant to Article 13.1; and
- to determine the amount of the Advance on Costs pursuant to Article 46.1.
The LCAM’s Panel currently has 28 professionals, comprising 15 professionals fully focused on arbitration, five professionals with a focus on mediation, and eight professionals with experience in both arbitration and mediation.
LCAM’s Cost-Effective Arbitration Procedure
The LCAM’s Expedited Arbitration Rules, in force as from 1 September 2022, offer an expedited and more cost-effective procedure to parties, irrespective of the amount in dispute.
The Expedited Arbitration Rules provide for an overall six-month arbitration from the commencement date (Article 8.3). The parties to expedited proceedings must serve their submissions in relatively short time periods (Articles 8.4, 8.5 and 8.6).
Parties’ written statements and experts’ reports are also limited by the numbers of words (Articles 9.1 and 11), with experts’ reports not exceeding 3,000 words.
These proceedings dispense of oral hearings as well as document production (Articles 8 and 10). In order to preserve efficiency, arbitrators must endeavour to issue the final award within six weeks from the closing submissions and within six months from the commencement date (Article 12.1).
The administrative and arbitrator fees are all-inclusive, ranging from GBP 2,500 to GBP 4,000 for claimants, and from GBP 1,500 to GBP 3,000 for respondents (Schedule of Costs):
[1] 2020 LCIA Notes to Parties, para. 17.
[2] 2020 LCIA Notes to Parties, para. 17.
[3] Bye-laws of the London Chamber of Commerce and Industry, Articles 6.01 and 6.02.
[4] 2021 LCAM Arbitration Rules, Article 10.
[5] See Article 10.1 of the 2021 LCAM Arbitration Rules and Article 11.1 of the 2022 LCAM Arbitration Rules.
[6] See Article 10.2 of the 2021 LCAM Arbitration Rules and Article 11.2 of the 2022 LCAM Arbitration Rules.
[7] See Article 5.1 of the 2021 LCAM Arbitration Rules and Article 5.1 of the 2022 LCAM Arbitration Rules.
[8] See Article 22.1 of the 2021 LCAM Arbitration Rules and Article 23.1 of the 2022 LCAM Arbitration Rules.
[9] London court of Arbitration and Mediation and Herbert Smith Freehills, Mediation in Arbitration: Insights from the London Chamber of Arbitration and Mediation/Herbert Smith Freehills Survey dated 2 February 2021.
[10] Ibid.
[11] See Articles 13.2 and 13.3 of the 2021 LCAM Arbitration Rules and Articles 14.2 and 14.3 of the 2022 LCAM Arbitration Rules.
[12] Halliburton Company v. Chubb Bermuda Insurance Ltd (formerly known as Ace Bermuda Insurance Ltd) [2020] UKSC 48, Supreme Court of the United Kingdom, 27 November 2020, para. 3.
[13] Id., paras. 12-17.
[14] Id., para. 19.
[15] Id., paras. 125-131.
[16] Id., paras. 132-138.
[17] Id., paras. 132-136.
[18] Ibid.
[19] Id., paras. 143-150.