Arbitration is an increasingly popular method of dispute resolution and London is at the centre of the industry. The increasing popularity of resolving disputes through arbitration, particularly between businesses, is due to the fact that arbitration has advantages in terms of confidentiality; in some cases the easier enforcement overseas of arbitral awards (due to the New York Convention), and the fact that it is sometimes seen as a quicker, cheaper and more practical solution than going to court (although arbitration can be an expensive process, including as it is necessary to pay the arbitrator(s) for their time).
One of the leading institutions for commercial dispute resolution is the London Court of International Arbitration (LCIA). According to the LCIA Registrar’s latest report, 2013 saw the highest number of both domestic and international arbitration cases referred to the LCIA since its inception. This reflects the fact that the UK, and London in particular, has a longstanding international reputation for providing an excellent, cost effective and efficient forum for businesses conducting international arbitration, which reputation continues to grow.
London’s value for money
The LCIA is just one of a number of internationally respected arbitration institutions in the UK, which is also home to the likes of the London Maritime Arbitrators Association. Arbitrations are also regularly carried out in London under the auspices of the International Chamber of Commerce.
According to the most recent survey carried out by the Chartered Institute of Arbitrators, the UK is the cheapest centre for international arbitration. Compared with other European capitals, London’s arbitration process is seen as relatively efficient and low cost.
Underlining this accolade, there is a continual drive for innovation and improvements to efficiency in order to keep arbitration rules in the UK in line with contemporary international arbitration practice and to maintain the UK’s competitiveness with other jurisdictions. The introduction of new arbitration rules by the LCIA, which came into effect on 1st October 2014, provides a good example.
Emergency innovation: the LCIA rule changes
Among the changes the LCIA made was the introduction of an emergency mechanism for arbitration, allowing parties to request a temporary arbitrator in advance of the formation of a tribunal. If the application for the immediate appointment of a temporary sole arbitrator is granted an Emergency Arbitrator shall be appointed by the LCIA Court within three days from the Registrar's receipt of the application (or as soon as possible thereafter). The Emergency Arbitrator shall decide the claim for emergency relief as soon as possible and no later than 14 days from being appointed. The Emergency Arbitrator is also not required to hold a hearing but can instead decide the claim for emergency relief on the documents available.
In addition, other more general changes have been made, for example to the timetable to make the process more efficient. Article 15.10 provides that the tribunal has to render a final award as soon as reasonably possible following the last submission from the parties. Furthermore, under Articles 10.1 and 10.2 the LCIA can withdraw an individual’s appointment if the arbitrator does not conduct the arbitration with ‘reasonable efficiency, diligence and industry’. Also, parties and the tribunal are encouraged to make contact as soon as practical and no later than 21 days from receipt of the Registrar’s written notification of the formation of the tribunal. However, flexibility is still ensured as the timetable can be revised and parties can agree to alternative deadlines in some cases.
Parties are now also able to submit requests and responses using standardised online forms.
London has significant breadth and depth when it comes to offering both a forum and expertise for conducting international arbitration. However competition from other arbitration centres in Europe, Asia and North America is good news for parties to disputes, as innovation and improvements to save time and costs remain high on the agenda for arbitration organisations.