LCIA REPORTS A RECORD NUMBER OF NEW CASES FOR 2019

The LCIA has published its Casework Report for 2019, showing a record number of new cases referred to the institution in 2019. The statistics reveal that the LCIA remains a leading centre for disputes in the banking and finance sector. The LCIA also demonstrated continued progress in the gender and nationality diversity of its arbitrator appointments.

As the LCIA notes, the report comes in an unprecedented time amid the COVID-19 pandemic. The LCIA says it has seen a spike in new cases for the first quarter of 2020, which it expects will continue in the medium term as pandemic-related disputes begin to crystallise.

The rise in new cases follows a similar trend at the ICC, which also reported a record high in new referrals in 2019. The same appears to be true in ad hoc arbitrations, with the London Maritime Arbitrators Association (LMAA) reporting a 15% rise in cases in 2019 (see our blog post here).

Caseload in 2019

• The LCIA received 395 arbitration referrals, 346 (or 85%) of which were filed under the LCIA Rules. This represents an increase of nearly 24% on 2018's figures, and marks the second consecutive year of growth since a slight dip in case numbers in 2017.
• The LCIA's caseload continues to be dominated by disputes in the banking and finance sector (32%), followed by energy and resources (22%). The LCIA has seen consistent growth in the number of banking and finance arbitrations, up significantly from 21% in 2016, cementing the institution's status as a leading destination for disputes in that sector.
• Parties to LCIA arbitrations came from 138 different countries in 2019. Over 80% of parties were located outside the United Kingdom. There was a significant growth in parties from Western Europe (up from 15% in 2018 to 24% in 2019), but a decline in parties from Asia (down to 10% from 14% in 2018).
• English law remains the most popular governing law in LCIA arbitrations (81%), and England remained the most frequently chosen arbitral seat (89%).
• 62% of new cases were initiated under agreements entered into between 2015 and 2019, with most cases being initiated 3-4 years after the contract date.
• The LCIA has, for the first time, reported information on other cases in which it provides varying levels of administration. In 2019, the LCIA received 7 arbitrations under the UNCITRAL Rules and acted as appointing authority in 8 UNCITRAL cases. The LCIA provided fundholding services in 34 cases, including arbitrations under the UNCITRAL and LMAA Rules.

Arbitrator diversity

• 2019 saw a continued increase in the number of female arbitrator appointments, accounting for 29% of all arbitrator appointments in 2019, up from 23% in 2018.
• The LCIA continues to be a leader in gender diversity, appointing women 48% of the time (up by 5% from 2018). Female appointments by the parties and co-arbitrators were higher than in 2018, but still lagged considerably behind appointments made by the LCIA itself: parties appointed a woman just 12% of the time (up from 6%); co-arbitrators 30% of the time (up from 23%).
• The LCIA has also seen continued diversification in the nationality of arbitrators. In 2019, arbitrators were appointed from 40 different countries. The proportion of British arbitrators appointed dropped significantly from 65% in 2018 to 51% in 2019, reflecting the diversity of the LCIA's caseload.

Challenges to arbitrators

• The LCIA received 7 challenges to arbitrators in 2019, representing a decline as a proportion of new cases when compared with 2018 (when 6 challenges were filed and only 233 new arbitrations). The proportion of challenges as a percentage of new cases remains low at around 2%.
• Of these 7 challenges, 5 were rejected and 2 remained pending as at the end of 2019.

Interim relief

• In 2019, there were 64 applications for interim and conservatory measures in 39 arbitrations. Tribunals granted relief in 36 instances (56%), and rejected the application in 15 (23%).
• Security for costs remains the most popular form of interim relief sought, accounting for nearly half of all applications. This relief was granted approximately 50% of the time.

Expedited formation of tribunals and emergency arbitrator appointments

• 2019 saw less than half the number of applications for expedited formation of a tribunal when compared with 2018 (10 in 2019, down from 23 in 2018). Two of these applications were granted, 6 were rejected and 2 were superseded, withdrawn or pending as at the end of 2019.
• The LCIA received just one application for the appointment of an emergency arbitrator in 2019, which was granted. The emergency arbitrator issued an award within 14 days of appointment.

For more information, please contact Andrew Cannon, Partner, Marco de Sousa, Senior Associate, or your usual Herbert Smith Freehills contact.