Seven Guidelines on Party Representation
The New LCIA Rules
Effective as of 1 October 2014, the London Court of International Arbitration (LCIA) has introduced its revised and updated Arbitration Rules (LCIA Rules). Included in the new LCIA Rules is a one-page Annex with seven “General Guidelines for the Parties’ Legal Representatives” (LCIA Annex). Thus, the LCIA Rules are the first institutional arbitration rules with guidelines regulating the conduct of the parties’ legal representatives. This puts the LCIA at the forefront of the current debate about counsel conduct and ethics in international arbitration.
Dr. Anke Meier and Lucie Gerhardt take a closer look at the new LCIA Annex in their publication “Seven Guidelines on Party Representation – The New LCIA Rules” (SchiedsVZ 2015, 10). The authors deal with the scope of application of the general guidelines, their content and practical implications and draw a comparison to the IBA Guidelines on Party Representation in International Arbitration of 25 May 2013.
This post briefly highlights a selection of questions discussed in detail in the publication:
- The LCIA is the first arbitration institution to include mandatory provisions for counsel conduct in their institutional arbitration rules. In contrast to soft law like the IBA Guidelines on Party Representation in International Arbitration, the LCIA Annex applies without any special reference or incorporation to all arbitrations conducted under the new LCIA Rules (paragraph 1).
- The purpose of the general guidelines contained in the LCIA Annex is to “promote the good and equal conduct of the parties’ legal representatives appearing by name within the arbitration” (paragraph 1). The LCIA Annex sanctions unfair obstruction of the arbitration (paragraph 2), deals with false statements, false evidence and concealment of documents (paragraphs 3, 4 and 5), prohibits ex parte communication (paragraph 6) and empowers the arbitral tribunal to sanction misconduct (paragraph 7).
- In addition to stipulating a basic prohibition to lie, one focus of the LCIA Annex is to address and prevent that legal representatives use “guerilla tactics” to obstruct or delay the arbitration proceedings (paragraph 2). One example for such obstructive conduct expressly mentioned in paragraph 2 are repeated unfounded challenges of an arbitrator or the jurisdiction of the arbitral tribunal. Such repeated unfounded challenges can constitute a serious problem in practice. However, there are various other procedural possibilities that counsel can utilize as “guerilla tactics” and addressing the issue conveys to practitioners from different backgrounds what is expected from counsel.
- The LCIA Annex also deals with the legal representatives’ duties with respect to document production (paragraph 5). Legal representatives should not conceal or assist in the concealment of any document which is ordered to be produced by the arbitral tribunal. Paragraph 5 thereby complements the disclosure mechanism provided for in Article 22.1 of the LCIA rules.
- The prohibition of ex parte communication in paragraph 6 of the LCIA Annex may come across as a very basic ground rule. Nevertheless it is a useful clarification since it is disturbing to observe in practice how many arbitrators and parties think that ex parte communications can be tolerated.
- The LCIA Annex bestows the authority to sanction the misconduct of legal representatives upon the arbitral tribunal – not an external separate institution. The arbitral tribunal can issue (i) a written reprimand, (ii) a written caution as to future conduct in the arbitration or (iii) any other measure necessary to fulfill within the arbitration the general duties required of the arbitral tribunal under the LCIA Rules. The first two sanctions do not come across as overly severe. It remains to be seen how much teeth the blanket clause will have in practice.
The new LCIA Rules are available here.
Any questions? Please contact: Dr. Anke Meier or Lucie Gerhardt
Practice Group: Litigation, Arbitration & ADR