The LCIA has published its Casework Report for 2024, which shows it to be a leading choice for international parties. The report also gives some helpful statistics on the use of the early determination procedure, which suggests that tribunals still find it difficult to dismiss cases at an early stage.
In this article we take a look at those particular aspects of the report and suggests some speculative reasons behind the statistics.
A leading choice for international parties
London was the chosen seat in 89% of LCIA arbitrations and the substantive law was the law of England and Wales in 78% of arbitrations. But parties in LCIA arbitrations originated from 101 different jurisdictions, and 85% of parties were from jurisdictions other than the United Kingdom. This suggests that international parties still view the UK as an eminent place of arbitration, with London’s place as a centre of arbitration solidified.
However, 59% of LCIA Court appointments were of non-British arbitrators. While we don’t have any more detail about that statistic, it may be the case that international parties want to appoint arbitrators from their countries, with whom they are familiar and who have a local reputation for the subject matter expertise.
There was a notable growth in African representation, especially Kenya (7.7%). This was due to several multi-party/grouped cases. The LCIA has always been popular in Europe but this trend suggests that it is becoming increasingly relevant further afield.
The top sector represented in the disputes was the Transport & Commodities (29%) and 36% of disputes were centred around sale of goods agreements. This may suggest trade tensions within global commodities. As supply chains become more complex, these types of disputes are referred to international arbitration as a preferred forum to resolve their disputes.
Early Determination: applications are rarely successful
The LCIA introduced the early determination procedure with the new LCIA Arbitration Rules that took effect on 1 October 2020.
Since then, a handful of applications have been made, but an even smaller handful have been granted. Here’s a breakdown of the figures, based on previous Casework Reports:
| Year | Applications made | Granted | Other comments |
|---|---|---|---|
| 2021 | 15 | 7 |
2 were rejected, 1 was superseded by the parties' settlement of the case, and 5 were yet to be determined at the end of 2021 |
| 2022 | 15 | 1 |
5 were rejected, 3 were superseded, and 6 were yet to be determined by the end of 2022. |
| 2023 | 25 | 3 |
1 was partially granted, 17 were rejected, and 4 were either withdrawn/ superseded/pending |
| 2024 | 16 | 1 |
8 were rejected, 5 were withdrawn, 1 superseded and 1 application remains pending. |
While it appears that tribunals were more willing to use the procedure in the first year, enthusiasm for granting applications seems to have waned.
The procedure gives tribunals the power to:
- determine that any claim, defence, counterclaim, cross-claim, defence to counterclaim or defence to cross-claim is:
- manifestly outside the jurisdiction of the tribunal; or
- inadmissible or "manifestly without merit"; and
- where appropriate, to issue an order or award to that effect (an early determination).
Where applications are made, the most common grounds cited are that the claims or defences were manifestly without merit.
However, it is not necessarily straightforward to determine that a claim or a defence is manifestly without merit. Usually, there will be an evidential hearing to work out the merits of the case. For early determination proceedings to be successful, the arbitrators balance the efficiency of making a decision early, with procedural fairness that allows both parties to be heard. It appears that tribunals often fall on the side of procedural fairness.
That possibly reflects the complexity of cases being referred to the LCIA. The more difficult or complex the relevant issues are, the less likely it is that an application for early determination will succeed.
It will be interesting to see whether there is an increase in the success rate of these applications now that the new introductions to arbitration under the Arbitration Act 2025 are in force. The Act introduces a new Section 39A which provides that a tribunal may make an award on a summary basis if a case meets certain criteria. Tribunals may now feel that they have a stronger footing on which to grant these applications.
