The new rules are designed to expedite proceedings and arbitral tribunal formations.
The DIFC-LCIA Arbitration Centre (DIFC-LCIA) recently released new arbitration rules (2016 Rules) deigned to mirror the London Court of International Arbitration’s (LCIA’s) 2014 Rules (LCIA Rules). The 2016 Rules will replace the former 2008 DIFC-LCIA Arbitration Rules (2008 Rules) for arbitrations commencing on or after 1 October 2016. This recent development follows a series of initiatives aimed at helping cement Dubai’s position as a regional hub for international commercial arbitration and mediation.
In 2008, the Dubai International Finance Centre (DIFC) established a joint venture arbitration institution with the LCIA to offer dispute-resolution services to parties in the DIFC. On 18 November 2015, following renegotiated arrangements between the LCIA and the DIFC Dispute Resolution Authority, the DIFC-LCIA was restructured and relaunched as an independent operation to the DIFC courts. The aim of the restructuring was to address the apparent concerns over the constitutionality and jurisdictional reach of DIFC-LCIA (including award enforcement) and its ability to service companies incorporated outside the DIFC’s territorial jurisdiction.
The DIFC-LCIA’s restructuring and the recent implementation of the 2016 Rules demonstrates the government of Dubai’s commitment to ensuring the DIFC-LCIA’s success as an international arbitration centre. The 2016 Rules are designed to address the shortcomings of the 2008 Rules by providing expedited procedures for proceedings and arbitral tribunal formations, as well as more prescriptive rules governing parties’ conduct and documentation filing.
Increased Efficiency and Decreased Delays
The 2016 Rules contain a number of measures to increase efficiency and avoid delays in proceedings. A key feature of the 2016 Rules is access to an “emergency arbitrator” prior to forming an arbitral tribunal. A newly drafted Article 9B provides that, in the case of an emergency, any party may apply to the LCIA Court for the immediate appointment of a temporary sole arbitrator to conduct proceedings pending an arbitral tribunal’s formation. A party must send an application to the registrar that sets out, among other things, the specific grounds for requiring an emergency arbitrator and the specific claim for emergency relief. Notably, Article 9B does not apply to parties that have concluded their arbitration agreement before 1 October 2016 and have not agreed to “opt in” to Article 9B, nor does it apply to parties that have agreed in writing at any time to “opt out” of the provision.
Although the 2008 Rules allowed a party to replace an arbitrator who was not considered suitable, independent or impartial for the purposes of the arbitration (see Articles 10 and 11), the newly implemented Article 9C now enables the expedient appointment of a replacement arbitrator and allows the LCIA Court to abridge any period of time in the arbitration agreement to account for the time taken to appoint the replacement. This initiative should allow parties to challenge an arbitrator’s diligence and efficiency without being concerned about potentially long delays that could hinder their access to an enforceable award.
Online Filing and Commencement of Proceedings
Article 1.2 permits the request for arbitration (and all accompanying documents) to be submitted in electronic form instead of, or in addition to, paper form. The DIFC-LCIA’s website offers a standard electronic form that a claimant may use to submit its request. The response may also be submitted electronically using the standard electronic form available on the DIFC-LCIA’s website (Article 2.3).
When filing the request and response, the 2016 Rules (under Rules 1.1(vii) and 2.1(vi), respectively) require the parties to deliver copies to all other parties in the proceedings and to provide documentary proof of such delivery satisfactory to the LCIA Court (if actual delivery is demonstrated to be impossible to the LCIA Court’s satisfaction, sufficient information should be provided regarding any other effective form of notification) . Articles 1.1(i) and 2.1(i) request that the claimant(s) and respondent(s) provide full contact details (including address, telephone, email address, and facsimile numbers) on which they may be reached, as well as the same particulars for their legal representatives (if applicable).
Provision for Multiparty Disputes
Articles 1.5 and 2.5 respectively provide that the terms “claimant” and “respondent” be interpreted in the plural under an arbitration agreement in which there may be more than one claimant or respondent to the proceedings. This addresses previous ambiguities in the 2008 Rules concerning the ability for one or more claimants to bring proceedings jointly against another party or multiple parties.
Updated Schedule of Costs
The 2016 Rules are accompanied with an updated schedule of arbitration costs, effective 1 October 2016. The registration fee (payable in advance with the request for arbitration) has increased to AED10,000. The tribunal’s fees will depend on a case’s circumstances, including its complexity and the requirement for arbitrators to have special qualifications, but shall be at an hourly rated not exceeding AED2,500. Read further information regarding costs.
In addition to the abovementioned features, the 2016 Rules are a marked improvement from the 2008 Rules in terms of clarity and consistency and should provide both arbitrators and parties to arbitration proceedings with a better understanding of their rights and obligations throughout the arbitration process. The speed and efficiency at which arbitrations may potentially be conducted under the 2016 Rules should also encourage parties to more readily adopt arbitration under the DIFC-LCIA Rules as their chosen form of dispute resolution.