So far so good…

21 May 2018

London as a centre for international arbitration emerges unscathed (so far) from the uncertainty of Brexit.

The London Court of International Arbitration (LCIA) recently published their 2017 Casework Report (Report) which provides welcome reassurance to London arbitration practitioners as to the high standing of London as a world centre for international arbitration. Highlights from the Report are available to view here: LCIA Casework Report.

The Report confirms that London is still one of the world’s leading international arbitration venues, highlighted by the fact that over 80% of the LCIA’s caseload arrived from outside the UK last year with an increasing number coming from the US. The number of disputes from Russia/CIS remained stable at around 10%, proving that the tough economic times and UK sanctions against Russia have not dampened Russian parties’ confidence in English arbitrations. In practical terms, according to the Report, English law is the overwhelming choice of governing law for LCIA arbitrations (85%). Furthermore, 94% of LCIA arbitrations were seated in London. Indeed, the Report shows an increase in the amount of higher value claims: 31% of claims were for amounts over USD$20 million, up from 28% in 2016 and 18% in 2015, further demonstrating confidence in London as an arbitral seat.

So, why is London so popular as an arbitration venue and English law the governing law of choice for foreign parties?

There are a number of reasons for this:

    1. the efficiency and impartiality of the English judicial system, particularly when faced with complex and multi-jurisdictional matters;
    2. the highly commercial approach of English contract law, which places great importance on freedom of contract;
    3. the support provided by the Arbitration Act 1996, giving arbitral tribunals a wide discretion on procedural matters and providing for very limited interference by the national courts;
    4. the availability of high quality and specialist professionals in many spheres of industry who can act as arbitrators, counsel and experts in arbitral proceedings; and
    5. the UK is a signatory to the New York convention which means that the UK’s withdrawal from the European Union will have little effect on the appetite to arbitrate in London.

The Report will provide reassurance to both London’s arbitration community and potential litigants, not just about the high regard in which London is held by the international arbitration community but more generally about the post-Brexit arbitral landscape. Indeed, the International Arbitration survey by the Queen Mary School of International Arbitration, released in May 2018, confirms that London is still considered the most popular seat.

Co-authored by Jasmine Cattigan, Paralegal Administrator at Fladgate LLP.