Established in 2008, the DIFC-LCIA Arbitration Rules have evolved to provide a system that enhances efficiency of arbitral proceedings, as well as managing their costs.
For instance, the DIFC-LCIA 2016 Rules annexed a provision that enabled parties to appoint an Emergency Arbitrator on a temporary basis in situations where there was an "urgency".
The most recent version of the Rules came into force on 1 January 2021. The 2021 Rules replace the 2016 Rules and introduce a variety of significant changes intended to promote the fair and expeditious conduct of arbitrations within the DIFC-LCIA forum. We provide an overview of these changes below.
Key features and updates
Introducing electronic communications and virtual hearings
The 2021 rules confirm the precedence of electronic communications, a requirement that has arisen due to the ongoing COVID-19 pandemic. The Request for Arbitration and the Response to the Request – which were previously required to be submitted in hard copy – can now be submitted electronically, either by email or through a designated electronic filing system, pursuant to Article 4.1 of the 2021 Rules. Any alternative method to submit a Request or Response requires prior written approval from the Registrar.
A similar approach has been taken to all written communications between parties. All documents must be submitted by email or through a designated filing system, (see Article 4.2). Prior to the 2021 Rules, correspondence by post was the preferred means of communication and electronic communications required either designation, or an order by the Tribunal.
Article 19.2 of the 2021 Rules expressly authorises virtual arbitration hearings by conference call, video conference, or other communications technology. The Article states that "a hearing may take place in person, or virtually by conference call, videoconference or using other communications technology with participants in one or more geographical places (or in a combined form)."
The 2021 Rules also include a provision for "E-awards". Pursuant to Article 26.2, any award may now be signed electronically and/or in counterparts assembled into a single instrument subject to the parties, the Tribunal or the LCIA court directing otherwise. The Rules also provide that awards will be transmitted to parties primarily in electronic form but may be in hard copy form if requested by the parties. A noteworthy change made to the 2016 Rules is that the electronic copy of an award will prevail where any discrepancy exists.
Expediting proceedings
Pursuant to Article 22 (viii), Arbitral Tribunals can now make an "Early Determination" on any claims, defences or counterclaims, and similar claims that are manifestly outside the Tribunal’s jurisdiction, without merit, or inadmissible. This tool will enable the Tribunal and parties to focus on defects in a case before significant time and costs are incurred.
Other useful tools which have been introduced via the 2021 DIFC-LCIA Rules include:
- limiting the length or content of any pleadings, or dismissing the need for written pleadings entirely, as per Article 14.6(i)
- limiting the written and oral evidence of any witnesses, pursuant to Article 14.6(ii)
- dispensing with the need for a hearing entirely.
Although Arbitral Tribunals already had these powers to a limited extent under the 2016 Rules, these express powers are likely to embolden Tribunals to take a more active role in ensuring the effective and efficient resolution of disputes with fewer costs being incurred.
Broader powers of consolidation for the Tribunal and express recognition to order concurrent conduct of Arbitrations
While the 2016 Rules provided the Arbitral Tribunal with the power to order consolidation of arbitrations arising from the same arbitration agreement, or a compatible arbitration agreement, the 2021 Rules broadens these powers.
Article 22.7(iii) of the 2021 Rules, gives 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". Pursuant to Article 22.8(ii), the same power is granted to the LCIA Court. This means that parties can now agree or apply to consolidate prior to the formation of the Tribunal, which would generally be at the stage of filing the Request for Arbitration and Response.
On a related note, Article 22A of the 2021 Rules has set in motion an enhanced consolidation regime which allows the consolidation of arbitrations dealing with interconnected transactional disputes without a strict requirement for the identity of the parties and/or the underlying arbitration agreements.
The role of Tribunal Secretaries
Provisions relating to the role of Tribunal Secretaries have been included in Article 14A of the 2021 Rules and provide necessary clarity on the role and expectations. The 2021 Schedule of Costs determines that an hourly rate of between AED 370 and AED 860 is considered reasonable for such persons and issues further guidance for Tribunal Secretaries. What's more, the applicability of Article 30 of the 2021 Rules (which deals with confidentiality obligations) to Tribunal Secretaries is now explicit.
Other notable amendments
Permission to amend the Request or Response
The LCIA Court may now allow a party to amend, modify or supplement its Request or Response to correct minor errors or ambiguities, prior to the appointment of the Tribunal.
Prioritisation of quick Tribunal Appointments
The timescale for the LCIA Court to appoint the Tribunal has reduced from 35 days to 28 days, calculated from the date of receipt of the Request and the registration fee.
New timeframe for delivery of awards
The new Rules provide that the Tribunal must strive to deliver its award within three months of the last submission from the parties, (see Article 15.10). This is a material departure from the 2016 Rules which required the Tribunal to deliver its award “as soon as reasonably possible.”
Permissible communication with the DIFC-LCIA Registrar
Under Article 13.4 of the 2021 Rules, parties can have unilateral contact with the DIFC-LCIA Registrar regarding administrative matters. To ensure procedural fairness, parties must continue to copy the other side in all other communications with the DIFC-LCIA and the Arbitral Tribunal, in accordance with current established practice.
Requirement of transparency in relation to nationality
The new Rules helpfully define nationality, and state that the nationalities of the parties to the arbitration must be specified in the Request for Arbitration and Response.
Clarifications on the power of an Emergency Arbitrator
While the 2016 DIFC-LCIA rules introduced the concept of an Emergency Arbitrator, the 2021 Rules provide much needed clarity concerning the variety of powers available to such an individual. Under the new Rules, they have been granted the authority to:
- award costs, including legal costs, in emergency arbitration proceedings
- revoke, discharge or vary any clerical mistakes in any award made by the Emergency Arbitrator
- grant additional awards in relation to emergency relief previously overlooked (see Article 9, 2021 Rules).
Find out more
The introduction of these Rules will help ensure a fair and efficient means of resolving disputes within the DIFC-LCIA. The incorporation of electronic means of communication and virtual hearings is a welcome development in the region. Please reach out to a member of our Disputes & Investigations team in Dubai for further information on any of the changes raised in this article.
