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Fledgling London Court of International Arbitration hears first two cases in India

Exclusive: The London Court of International Arbitration’s (LCIA) first independent subsidiary LCIA India has commenced business with its first two arbitration cases received within six months of the publication of the LCIA arbitration and mediation rules in April this year.

The level of awareness amongst the business legal community about institutional arbitration will determine its future success LCIA India’s registrar Ajay Thomas told Legally India. “We don’t expect a stream of cases initially; you can gauge success not by the number of cases but by the feedback you receive from corporate counsels, transactional lawyers and the enquiries they make regarding procedures, standard arbitration clauses that can be inserted while negotiating a contract.”

The two arbitration matters LCIA India has received so far have been in the nature of ad-hoc referrals that had not been invoked as LCIA arbitration clause contained in the agreement itself but were rather referred after the dispute occurred between the parties post formulation of rules.

Thomas said: “We got our first reference in May just a month after we published our rules on 17 April 2010 and the second one in October. The first dispute is at the stage of final hearing and we’re expecting a closure before the end of this financial year.”

The value of the disputes currently under arbitration was “substantial” he said and could be classed as mid-size disputes.

In the first matter, both the arbitrating parties are Indian entities with two Indian arbitrators representing each side and the chair being non-Indian from a neutral country. The second involves a dispute between an Indian and foreign party.

Thomas commented on the organic way of calling for arbitration proceedings for dispute resolution and observed that it can take place only if the agreement provides for a specific clause whereby an institutional arbitrator is named.

This method he believed is a drawn-out process where there is no possibility of knowing whether inclusion as the preferred institutional arbitrator has been made or not.

LCIA India operates under a three-tier organisational structure - the Board of Directors, the Arbitration Court and the Secretariat. As the parent body LCIA London doesn’t control the everyday working of its Indian subsidiary and extends support and backing as and when required.

AZB and Partner’s co-founder Zia Mody and senior counsel Darius Khambatta are the two Indian delegates of LCIA Arbitration Court that consists of 35 members chosen to represent various nationalities.

The three-fold contribution that the court makes is to appoint the arbitrators, decide upon the challenges made against an arbitrator’s appointment and control the cost of arbitration.

The LCIA set up in Delhi in early 2009 and In November 2009 the London Chartered Institute of Arbitrators also set up an India chapter.

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