London Maritime Arbitrators Association (LMAA) Terms - significant changes.

Author: Lara McDonnell
In: Article Published: Friday 07 May 2021

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The revised LMAA Terms (“Terms”) will apply to all arbitrations commenced on or after 1 May 2021, pursuant to paragraph 4 of the Terms.

The updated version of Terms was prepared by a committee chaired by David Owen QC and following careful consideration of all suggestions made by users of LMAA arbitration. In accordance with the nature of commercial arbitrations, the approach adopted by the committee has been pragmatic and practical with attention given, amongst other things, to the increased use of virtual hearings and the use of electronic signatures.

Indeed, the LMAA was one of the first arbitral bodies to publish guidelines for the conduct of virtual and semi-virtual hearings and there have been over 40 virtual hearings held involving LMAA arbitration.

The International Dispute Resolution and Arbitration and Mediation Centre (IDRC) on Fleet Street has been extremely active in providing a venue and support facilities for such hearings.

So, what are some of the significant revisions to the Terms (and Schedules)?

Helpfully a Commentary on the Terms published with the same addresses some, relevant revisions.

The revisions include:

  1. The appointment procedure for a sole arbitrator where a party fails to appoint its own arbitrator (paragraph 10 of the Terms). The procedure has been streamlined and follows the LMAA Arbitration Clause, as opposed to section 17(2) of the Arbitration Act 1996 as was the case in the 2017 Terms. This provides a speedier mechanism in that where the respondent fails to appointment its own arbitrator within 14 days of receiving the claimant’s notice of appointment, the claimant can appoint its own arbitrator as sole arbitrator without first having to give a further seven clear days grace period to the respondent to make an appointment.
  2. The inability of an appointed arbitrator to conduct a hearing (paragraph 12 of the Terms) has been addressed so as to improve efficiency and save costs. The revised Terms now give the President of the LMAA the power to appoint a substitute arbitrator, avoiding the need for court applications, vacated hearings and the like.
  3. Virtual hearings are recognized (paragraphs 15(c) and (d) of the Terms and paragraph 15 of the Questionnaire in the Third Schedule) and Guidelines provided for the conduct of both virtual and semi-virtual hearings, at the Sixth Schedule to the Terms. Despite the necessity of having such virtual hearings during the pandemic, they provide an efficient and environmentally friendly arbitration hearing process as participants need not travel, thus reducing the carbon footprint of all those involved, particularly those coming from abroad as is usually the case based on the international nature of maritime arbitrations.
  4. There is express provision for signing of awards electronically and in counterparts and for notification of the awards by electronic means (paragraph 24 of the Terms). This is particularly helpful where it may be difficult to obtain handwritten signatures from the arbitrators. Flexibility is however maintained in that should a party and/or the parties require a handwritten signature this may be provided. Notification should be provided of this requirement, by the party and/or parties requiring the same, prior to production of the award.
  5. Witness evidence, unsurprisingly, has not been left untouched by the revisions. Some elements of the new English Court procedures for witness evidence have been transposed into the Terms, pursuant to paragraph 2 of the Checklist in the Fourth Schedule to the Terms. However, they are not as far reaching as the amendments to the court rules. The revisions make it clear that witness evidence should be in the witnesses’ own words, restricted to evidence on the disputed facts in issue and of which the witness has personal knowledge or recollection. It should not include opinion or legal argument; witness evidence is not an additional pleading / submission. If the requirements are ignored the tribunal will be able to impose costs sanctions.
  6. The LMAA Questionnaire now requires a more detailed breakdown of the parties’ costs, pursuant to paragraph 16. This is an important revision, as it focuses the parties’ minds on costs at an early stage in the reference.

The revisions are far-reaching and will have a positive impact on all arbitrations commenced pursuant to the LMAA Terms, on or after 1 May 2021.

 

LARA MCDONNELL © 2021

BARRISTER

33 BEDFORD ROW

NOTICE: This article is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of Chambers or by Chambers as a whole.