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The release of LCIA India Rules on 17 April 2010 is a Major milestone with the potential to impact the popularity and success of arbitration in India. Shourav Lahiri considers salient aspects of the Rules

The London Court of International Arbitration (LCIA) has recently been making a concerted effort to expand overseas, and along with Dubai and Singapore, India appears to be an area of focus for the LCIA. Last month, it also introduced a set of India-specific rules that will govern arbitrations referred to its India chapter.
In this article, I consider the three most salient features of these new rules which will be of interest to construction industry.

Appointment of Arbitrators
The LCIA-India Rules include provisions to ensure that the arbitrators have the necessary skills to manage and resolve the arbitration, and have the time available to devote to such resolution [Art 5.3(b)].

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This is an interesting and welcome development given the increasing phenomenon of long delays in the release of arbitration awards by arbitrators who are very busy in their legal or arbitral practice. These guidelines mirror those adopted by the ICC.
The LCIA-India Rules removes the parties’ rights to appoint the chairman of the tribunal. This power is vested with the LCIA Court. It is not clear whether this is necessarily a good development as it does undermine the basic tenet of arbitration which is that it is a consensual forum for the resolution of dispute and, where parties can agree on a chairman, it would be odd for the LCIA-Court to not allow it or overrule that choice. The implementation of this provision will need to be carefully watched over the near future to assess its effectiveness.

Fees payable to arbitrators
Institutional rules apply a quantum based fee structure, under which the arbitral fees are calculated based on the amount in dispute. The LCIA-India Rules, however, provide for the arbitrator’s fees to be paid on an hourly rate basis (just like most lawyers’ fees are paid). The LCIA Court will set this hourly rate in advance, but these rates are not to exceed INR20,000 per hour per arbitrator (save in exceptional circumstances, where a higher hourly rate may be proposed by the LCIA but will have to be agreed by the parties).

Seat
Quite uniquely, the LCIA-India rules provide that there will be no default seat of an arbitration. The seat of each arbitration will be decided by the LCIA Court on a case-by-case basis [See Art 16.1] taking into account all the circumstances and the written statements of the parties. The LCIA-India Rules also provide that were the seat is ascertained to be outside India, Part 1 of the Indian Arbitration Act will not apply to the arbitration, thereby removing the jurisdiction of the Indian courts from the granting of interim measures and appointments and challenges to appointment of arbitrators). These functions are to be carried out by the LCIA Court which, similar to the International Court of Arbitration which exercises oversight over an ICC tribunal, will oversee the workings of the LCIA tribunal.
The LCIA India Rules do provide that where the seat is not the same location as that of the dispute, hearings, meetings and deliberations can take place elsewhere.
The promulgation of the LCIA-India rules now begin to make the LCIA-India chapter a real alternative to the use of foreign arbitral institutions such as the SIAC, the ICC and the DIAC. With the backing of LCIA, LCIA-India rules are a positive development for the future of arbitration in India.

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