Daniel Albuquerque deals with the London Court of International Arbitration (LCIA). He concludes by recommending a related book and ends it with the mention of India’s Panchayat as a mechanism for dispute resolution
The Rule: Where any agreement, submission or reference howsoever made or evidenced in writing… provides in whatsoever manner for arbitration under the rules of or by the LCIA, the London Court of International Arbitration, …the parties thereto shall be taken to have agreed in writing that any arbitration between them shall be conducted in accordance with the LCIA Rules (LCIA Rules, Preamble)
Context: To arrive at a status of unparalleled, unrivalled and unequalled institution it must possess a long enough
record of uncompromised service, impeccable impartiality, and more. Founded in 1883, and handed over by the City of London Corporation to the London Chamber of Commerce & Industry in the following year, it has crossed several names and milestones for a century and finally in 1981 named itself as the London Court International Arbitration (LCIA) (See: https://www.lcia.org). Its reliability and reputation has grown to an extent that its decisions and awards are trusted and accepted as final. If we could compare it to the traditional form of the game of cricket which also originated in Great Britain, its acceptability is ‘umpire’s decision is final.’ In short, rules are applied with the famed English common-sense (ad hoc), in a very practical manner, taking into account the commercial, contingencies rather than rigidity which helps to overcome procedural routine difficulties.
Case: Article 10. Revocation of Arbitrator’s Appointment
The Dispute: The dispute arose out of a joint venture framework agreement and a shareholders’ agreement, both governed by the English law. The agreements included LCIA with London as its seat and English as the language of conducting arbitration. The decision making bench consisted of three-member Division of the LCIA.
What went wrong with the Arbitration Tribunal?
The decision of the tribunal was challenged on the grounds of LCIA Rule 10 whereby the claimant had charged the tribunal of leaking an email (10.2), accused the arbitrators of not being on the job, thus delaying decision (10.3) and
finally the confidentiality was breached (10.4). A three-member Division of LCIA deliberated the challenge. The following were its findings: a) the tribunal sought certain information from its secretary per email. This, although may not tantamount to influence the decision of the tribunal, yet the arbitration parties may justifiably express their reservations; b) the charge that one of the arbitrators was delaying the proceedings does not hold since it is parties to the arbitration, in spite of the repeated notices went unheeded, hence the charge of delay does not apply; c) the breach of confidentiality.
The Decision: First, the challenge was justified with regard to the sharing of the email with the secretary, although impartially taken into account the secretary is an integral part of working or operation of the arbitration panel, the fact that it evoked an impression of breach by the arbitration party, was partially accepted. Second, concerning the undue delay, it was found out by checking the facts that even after several notices and adjustments, the challenger was in the wrong for all the effort made went unheeded. Third, it followed, as per records that there wasn’t a breach of confidentiality at any time of the proceedings. It was declared that the challenge had failed, cumulatively. The costs were to be determined as part of the arbitral award.
Analysis
Generally, at LCIA the challenge to the decision springs less from the ruling per se. It is often about a certain misgiving about either the appointment of the arbitrator, or some suspected impartiality etc. In other words, it is Article 10 and its clauses of the LCIA rules that are evoked.
The LCIA Rules are not exceptional; these are the same as United Nations Commission on International Trade Law
(UNCITRAL); however, the difference lies in their straightforward and honest implementation. Unlike the judges of a court there are mutually agreed arbitrators who after careful inquiry make the decision and determine the award. The LCIA does not publish the decisions. Thus it maintains the complete secrecy and confidentiality. The only exceptions are the listed companies who make it public in their Annual General Body Meeting (AGM), but not the LCIA. Further, if the decisions are challenged, the LCIA board appoints a single or more of its members as are necessary to review, as is with the case above. The database of these decisions is to be found on the LCIA’s website; however, neither the personal names nor the names of the companies are mentioned. The aggrieved party who challenges is the claimant and the opposite party is called the respondent. This is the reason why LCIA scores above every other commercial arbitration centre in the world.
Irrespective of the Covid-19 pandemic, LCIA has been the busiest arbitration centre. Its online services in no way hinder the normal functioning. The annual report of 2020 corroborates
this fact. (See: https://www.lcia.org/ LCIA/reports.aspx)
LCIA India: It established its centre in 2009 in Delhi (See: http://www.lciaindia.org). At that time it was decided to establish into two wings: LCIA along with India specific rules and LCIA London rules. Eventually LCIA-India wing had to be closed due to lack of response to it. Since 2016, only the LCIA wing is in operation.
Spirit of Arbitration: LCIA’s independent, impeccable and impartial status is a boon to the increasingly expanding universe of commerce and trade. ‘Trust is gained when actions meet words,’ is a saying that is truly applicable to LCIA. Over the couple of the centuries it has established its trust network and companies find a reliable source to solve most complex commercial problems amidst political, cultural and social barriers.
Conclusion: To comprehend these complexities, I would recommend to all the companies, irrespective of the size of their businesses the work by Jerome T. Barrett and his son Joseph P. Barrett, A History of Alternative Dispute Resolution: The Story of a Political, Cultural and Social Movement, published by Jossey-Bass, 2004, as an invaluable resource for every company to understand comprehensively the power of arbitration.
Gram Panchayat: Interestingly the book chooses India’s ancient institution, the Panchayat, and recognizes it as the arbitration and negotiation body since 500 BCE. Eschewing contemporary overload of political mass around this
ancient, basic people’s assembly which consisted of five (pancha=five) village elders, it still serves as the only one
Dispute Resolution mechanism. Even today, for most of India’s rural villages, panchayat plays the role of a mediator,
arbitrator and the peace maker all rolled into one.
The columnist is a writer with Oxford University Press and a published author. Email: albuquerque.daniel@gmail.com
