Updated London Maritime Arbitrators Association’s (LMAA) 2021 Terms

On the 23rd of April 2021 the LMAA announced its revised Terms. Revisions have been made to the three main sets of terms, now known as:

• the LMAA Terms 2021

• the LMAA Intermediate Claims Procedure 2021, and

• the LMAA Small Claims Procedure 2021.

These will come into effect for arbitrations commenced from the 1st of May 2021 and the main amendments are set out below. The full text of the new terms may be found at https://lmaa.london/wp-content/uploads/2021/04/LMAA-Terms-Procedures-2021-FINAL.pdf.

We discuss here the main LMAA Terms 2021:

Failure to Appoint Arbitrator (paragraph 10)

Under the 2017 Terms, in three arbitrators/umpire proceedings, if the responding party failed to appoint their arbitrator, s.17 of the Arbitration Act 1996 (the “Act”) applied. This required a further notice to be served on the party in default stating the intention to appoint a sole arbitrator unless an appointment was made within 7 days. The new Terms disposes with this requirement of a further notice, and the party commencing the proceedings can proceed directly to appoint their arbitrator as the sole arbitrator. Respondents should thus be aware of the consequences of failing to respond within the 14-day time limit.

Substitute Arbitrator (paragraph 12)

The new terms give the President the power to appoint a substitute arbitrator if, after a hearing has been fixed, it becomes clear that an appointed arbitrator is unable to conduct the hearing (or there are “justifiable doubts” as to his ability to do so); but the commentary expresses the hope that the provision will be invoked rarely. It is worth noting that, while it is up to the President whether it is appropriate to make a substitute appointment, this provision does not prevent the parties for applying for removal or substitution of arbitrator under s.18 of the Act.

Virtual or Semi-Virtual Hearings (paragraph 15)

The revised terms now recognise the hearings may be virtual or semi-virtual, and a new Sixth Schedule has been added containing Guidelines for the Conduct of Virtual and Semi-Virtual Hearings. These include issues such as testing of equipment prior to the hearing, back-up arrangements, and states that adequate IT support should be in place.

Electronic Award within 6 weeks (paragraphs 23 and 24)

The award “should normally be available” within 6 weeks of the close of the proceedings and it may now under the new terms be signed electronically and delivered to the parties electronically. The parties should bear in mind that an electronic award may present issues with enforcement and the new terms stipulate that it is the responsibility of the party requiring an original award with a handwritten signature to inform the tribunal of this in advance.  

Questionnaire (3rd Schedule)

A significant change is the provision in the note in paragraph 16 that information as to costs must now be accompanied by a breakdown and also information as to the use of Counsel.

Witness Statements and Expert Evidence (Schedule 4 – Checklist, paragraph 2 and 3)

The revised wording governing witness statements and expert evidence stipulates that such statements shall, ideally, be in the witness’ or the expert’s own words and should only relate to the issues of facts that are to be decided. Witness statements and expert evidence should never be used to argue the case, and sanctions may be imposed for non-compliance. While this is in line with recent amendments to the rules for witness statements used in the Business and Property Courts, the LMAA amendment suggests a somewhat softer touch. Parties should nevertheless be aware that failure to comply may result in adverse cost sanctions.

The abovementioned amendments are the most significant changes and parties seeking to resolve their disputes within the LMAA framework should be aware that these are applicable to arbitrations commenced from 1st May 2021 onwards.