Introduction to the Most Popular Arbitral Institutions Part 1

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Arbitration is currently one of the popular alternatives dispute resolution because of its fast and convenient process that is not as protracted as a court proceeding.

There are 2 types of arbitration, i.e.:

Ad Hoc arbitration is arbitration that the parties agree to resolve the dispute by themselves without the service of arbitral institutions.
Institutional arbitration is arbitration administered by an arbitration institution when the parties agree to utilize the service of an arbitral institution.

By requesting arbitral institution service, the dispute resolution will be more convenient than Ad Hoc arbitration because arbitral institutions already established their own arbitration rules, including the arbitration fees, cost, and procuration. The arbitral institutions will provide convenient processes, so the parties do not have to proceed themselves, making the service of arbitral institution extra convenient.

This article will introduce the readers to the popular arbitral institution worldwide. Citing from the 2018 statistics surveyed by Queen Mary University of London, there are 5 most popular locations for conducting the arbitration, including London, Paris, Singapore, Hong Kong and Geneva [1], and 5 most popular arbitral institutions are ICC, LCIA, SIAC, HKIAC, and SCC.

International Chamber of Commerce (ICC)

International Chamber of Commerce (ICC) is located in Paris, France. ICC was established in 1919 or 102 years ago. ICC is the world’s largest business organization [2] consists of more than 45 million business institutions from over 100 countries. ICC’s primary mission is to promote trade and including international investment.

Moreover, ICC is the organization that publishes INCOTERMS [3], which are terms used in the international procurement and delivery of goods. ICC holds a significant role in arbitration proceedings through the ICC International Court of Arbitration founded in 1923. International Court of Arbitration is one of the world’s leading arbitration institutions that resolved more than 24,000 disputes since its establishment [4] and still maintains its popularity until now.

According to Queen Mary University of London 2018 statistics, ICC was the most preferred institution at 77% [5]. And even though the 2019 voting result was 71% [6], ICC was still the most preferred arbitration institution.

The cost of arbitration at ICC International Court of Arbitration, such as filing fees, starts from USD 5,000 [7], and there are also other costs set forth by ICC Rules. The service cost will also depend on the disputed capital and a number of arbitrators [8].

London Court of International Arbitration (LCIA)

LCIA, locates in London, England, established on 5 April 1883. LCIA’s purpose was to resolve international disputes arising within the city [9].

LCIA is one of the world’s leading international arbitral institution for resolving commercial disputes. In addition to the arbitral procedure service, LCIA also offers other effective and neutral Alternative Dispute Resolution (ADR) services regardless of location or common law or civil law.

LCIA’s nature of internationality reflected through 80% of disputed parties that use the service of LCIA, who are not English nationals. Moreover, LCIA has extensive access to talented and expert arbitrators and mediators from all around the world [10].

LCIA is the second most preferred arbitral institution after ICC, according to Queen Mary University of London statistics, in which LCIA’s popularity was at 51% in 2018 [11] and 32% in 2019 [12].

The cost of LCIA service will calculate from the total hours spent on arbitral procedures. A current registration fee for requesting the arbitration service is £1,950 [13]. The hourly rate applied by arbitrators does not exceed £500 per hour, and there will be additional costs [14].

LCIA does not calculate a filing fee on a capital basis because the institution would like to ensure cost-effective service based on the actual proceedings as much as possible. The average cost of LCIA service is USD 97,000, and the deliberation of the dispute takes about 16 months [15].

[1] http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey—The-Evolution-of-International-Arbitration.PDF
[2] https://iccwbo.org/about-us/
[3] Incoterms stand for International Commercial Terms. It is a collection of terms and conditions regarding the shipping or the delivery between purchasers and buyers in order to inform both parties of the scope of their responsibility and liability, as well as the costs and transferring of risks.
[4] Statistical Data in 2005
[5] Queen Mary University of London. 2018 International Arbitration Survey P.13
[6] Queen Mary University of London. International Arbitration Survey – Driving Efficiency in International Construction Disputes P 11
[7] https://iccwbo.org/dispute-resolution-services/arbitration/costs-and-payments/
[8] For those who interested, please see more at https://iccwbo.org/dispute-resolution-services/arbitration/costs-and-payments/cost-calculator/ and https://iccwbo.org/dispute-resolution-services/arbitration/costs-and-payments/
[9] https://www.lcia.org/LCIA/history.aspx
[10] https://www.lcia.org/LCIA/introduction.aspx
[11] Queen Mary University of London. 2018 International Arbitration Survey P.13
[12] Queen Mary University of London. International Arbitration Survey – Driving Efficiency in International Construction Disputes P 11
[13] https://www.lcia.org//Dispute_Resolution_Services/schedule-of-costs-lcia-arbitration-2020.aspx
[14] Ibid.
[15] https://www.international-arbitration-attorney.com/london-court-international-arbitration-lcia/

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Introduction to the Most Popular Arbitral Institutions Part 1