Deminor Wiki – London Court of International Arbitration (LCIA)

History

The origins of the LCIA trace back to 1883, when the Court of Common Council of the City of London established a committee to develop a tribunal for arbitration. The institution was formally inaugurated on 23 November 1892 as the City of London Chamber of Arbitration, jointly administered by the Corporation of the City of London and the London Chamber of Commerce. At its founding, the institution was described as being designed to offer all the virtues which the law lacked, particularly expedition where court proceedings were slow.

In 1903, the tribunal was renamed the London Court of Arbitration and subsequently relocated from the Guildhall to the premises of the London Chamber of Commerce. The Chartered Institute of Arbitrators joined as an administering body in 1975. The institution adopted its current name in 1981 to reflect its increasingly international caseload. A significant modernisation occurred in 1985 with the promulgation of new arbitration rules and the establishment of the LCIA Arbitration Court. In 1986, the LCIA became a fully independent, private not-for-profit company limited by guarantee.

The LCIA operates through a three-tier structure comprising the LCIA Board, the Arbitration Court (responsible for appointments and procedural decisions), and the Secretariat (which handles day-to-day administration). The institution's current Director General is Professor Dr Jacomijn van Haersolte-van Hof. According to the LCIA's 2024 Annual Casework Report, the institution received 362 referrals in 2024, with parties from 101 different jurisdictions, demonstrating its truly international reach.

Litigation Funding Context

The LCIA occupies a significant position in the landscape of third-party funded arbitration. London's established reputation as a seat for international arbitration, combined with the supportive English legal framework for litigation funding, makes LCIA proceedings particularly attractive for funded disputes. Approximately 86-89% of LCIA arbitrations are seated in London, where third-party funding is well-established and regulated through the Association of Litigation Funders' Code of Conduct.

The LCIA's cost structure is particularly relevant to litigation funding economics. Unlike some institutions that calculate fees as a percentage of the amount in dispute, the LCIA charges arbitrators and the Secretariat on an hourly rate basis. This approach can result in lower overall costs for high-value disputes and provides greater cost predictability for funders conducting due diligence. The staged deposit system, whereby parties are not required to pay for the entire arbitration in advance, also assists cash flow management in funded cases.

The LCIA Rules 2020 contain several provisions of relevance to funded parties. Article 25 empowers tribunals to order security for costs, a mechanism frequently invoked in cases involving funded claimants. Security for costs remains the most common form of interim relief sought in LCIA arbitrations. Notably, the LCIA Rules 2020 do not contain express provisions requiring disclosure of third-party funding arrangements, unlike some other arbitral institutions. This approach leaves disclosure to the discretion of the tribunal and the parties, informed by the IBA Guidelines on Conflicts of Interest in International Arbitration, which treat third-party funders as equivalent to parties for conflicts purposes.

The LCIA's procedural features support the efficient conduct of funded arbitrations. The composite request procedure introduced in 2020 allows parties to file multiple related arbitrations within a single request and seek consolidation, reducing administrative burden in complex, multi-contract disputes. The early determination mechanism under Article 22.1(viii) enables tribunals to decide points of law or fact without a full hearing, potentially shortening the time to resolution. Emergency arbitrator provisions permit urgent relief before tribunal constitution. These efficiencies are valued by litigation funders seeking to optimise the deployment of capital across case portfolios.

Conclusion

The London Court of International Arbitration remains one of the world's pre-eminent arbitral institutions, combining over 130 years of institutional experience with modern procedural innovations. Its London seat, hourly fee structure, and procedural efficiency make it a frequently chosen forum for third-party funded international arbitrations. As the litigation funding industry continues to expand in the international arbitration space, the LCIA's position as a trusted and sophisticated institutional administrator ensures its continuing relevance to funded parties and their financial backers.