In its 2020 case report the London College Of Arbitration (LCIA) acknowledged that it had ‘prospered mightily’ during the pandemic. The report confirms that –
compared with 2019 – 2020 saw an 18% increase in the number of LCIA arbitrations. At Nath Solicitors in London there’s no doubt that we have seen a much greater willingness on the part of commercial clients to use arbitration and ADR as a way to resolve disputes than before the Covid19 crisis began. Here we look at the LCIA findings and explore some of the reasons why arbitration has increased against the backdrop of Covid19.
Like all organisations it’s clear that the LCIA has had to adapt quickly to the ‘new normal’ ushered in by Covid19. The report highlights a request made to the LCIA to extend certain deadlines back in February 2020. The request, made by a Shanghai-based party to LCIA proceedings was based on the fact that Covid restrictions in the Chinese city meant the party was unable to comply with the original timeframes set by the LCIA arbitrator (before the onset of the pandemic).
Within a month of this first request the LCIA report indicates that every single LCIA arbitration was affected by Covid restrictions – meaning deadlines were extended, hearings were postponed or proceedings were shelved altogether. In addition to national restrictions, additional reasons for arbitrations being held up included:
Faced with these threats to the effectiveness of its arbitrations the LCIA report highlights how arbitrations held under the auspices of the LCIA have morphed into something much more flexible and, in turn, more efficient. For example:
In addition to the impact on the nature of proceedings, the Covid19 pandemic has itself been the catalyst for many new arbitrations and other ways of resolving disputes without resorting to the courts. New cases include disputes surrounding liability for the cancellation of international sporting and entertainment events and contractual disputes over non-performance due to Covid disruption. Almost all cases involve some reference to the force majeure clauses in agreements.
Increased use of arbitration as a way of settling a wide range of commercial disputes is being driven by a combination of factors – from direct government encouragement to the flexibility of the arbitration bodies themselves. It’s not just the LCIA that has become busier as a result of Covid19. Statistics covering all the major global arbitration bodies show a definite upward trend in cases. If you are a business facing a dispute, contact our director Shubha Nath at Nath Solicitors on 44 (0) 203 983 8278 or get in touch with the firm online. We’ll happily explain how arbitration and other alternative dispute resolution mechanisms work and advise you on the best way for you to proceed.
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