June 12, 2017
The New KLRCA Arbitration Rules 2017 – Keeping Abreast With The Times
The new KLRCA Rules have been streamlined, taking into account the need for clarity, ease of users and the exigencies in the resolution of disputes involving modern & complex commercial relationships.
The Rules incorporate certain standard definitions that were previously implicit or expressed in different parts of the structure of the old rules, thus becoming a clearer set. For instance, international arbitration has now been defined in the preliminary part. It is thus clearer in being applicable to the entirety of the rules, as opposed to its earlier location within the provisions for appointment of arbitrators in international arbitration.
Avoiding Frivolous Challenges
While arbitration is becoming increasingly attractive and indispensable to dispute resolution, one growing concern has been the increasingly frequent challenges to arbitrators by Parties with a view to delay the arbitral process, thereby undermining one of the greatest advantages of the process. The Rules seek to avoid and reduce the scope for frivolous challenges to arbitrators, by requiring any notice of challenge to be accompanied by a fixed, non-refundable fee. (R 5(4))
Powers Of The Tribunal
Subject to agreement of parties, the new rules provide the tribunal with powers in respect of time limits, conduct of the proceedings and the taking and consideration of evidence. (R 6) This further consolidates the powers of the tribunal in order to allow flexibility in dealing with circumstances relevant to particular disputes.
Seat Unaffected By Venue
As a clarification, the Rules also now provide that the proceedings may be conducted at any venue without affecting the seat of the arbitration, subject to the contrary being agreed by the parties. (R 7 (3))
Joinder Of Parties
Complex arbitral proceedings may require multiple parties. Addressing this step away from conventional two party arbitrations, the new Rules allow for the joinder of third parties to the arbitration proceedings. (R 9) This may be requested either with the consent of all parties to the dispute (including the third party) or by establishing that the third party is prima facie a party to the arbitration agreement. An application for joinder will either be decided upon by the Tribunal or, prior to the constitution of the tribunal, the Director of the KLRCA.
The new Rules provide clearer guidelines for the consolidation of different arbitral proceedings to account for particular concerns resulting from consolidation, such as the pre-requisites for consolidation, the constitution of the tribunal & possible challenges to enforcement. (R 10)
In furtherance of the ‘light touch approach’ being taken by the KLRCA, the new rules also seek to avoid errors in form & calculations made in the award by providing for a technical review of such irregularities. (R 12) This will reduce the scope for difficulties in compliance and enforcement and help maintain a legible and clear standard for awards made pursuant to KLRCA administered arbitrations.
Self-contained Code For Emergency Arbitration
While the earlier KLRCA Rules accounted for the requirement of emergency arbitrators in certain situations where a pressing interim measure is sought before the constitution of an arbitral tribunal, the new version of the Rules creates a self-contained code in relation to emergency arbitrators (Part III, Schedule III). This caters to the growing importance of emergency proceedings and the various concerns that they may raise, without affecting the working of the normal arbitral procedures as provided for in Parts I & II.
Schedules I and II of the new rules contain revised Arbitrator’s fees, also making it clear that the same will be payable only upon delivery of the award.
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