A Curt Primer for London Court of International Arbitration Proceedings
February 28, 2011
By: Edward J. Murphy and James E. Rogers
Texas Bar CLE: 8th Annual Advanced Insurance Law Course
It is unlikely that any of us will find ourselves involved in a London arbitration for a U.S. claim under a primary or excess policy. But, sometimes it does happen. Of course, it is common in reinsurance disputes. Thus, if you do not want to learn about international commercial arbitration in London, stop reading now!
With that prohibition, rest easy that learned professors have written encyclopedic volumes on the complexities, practice and procedure of international commercial arbitrations in London. Thankfully, we lack the patience (and you likely lack the time) to recreate such a detailed analysis. Instead, this article offers a brief introduction and terse practice primer on conducting London arbitrations with particular emphasis on institutional arbitration under the London Court of International Arbitration (“LCIA”) rules in case you wind up in a London arbitration.
Many times, foreign companies prefer to arbitrate their disputes in London to avoid having their contractual obligations decided in United States courts (or other perceived “pro-plaintiff” venues). It is, however, not that United States substantive law is perceived as “pro-plaintiff” – only that our courts (with their heightened damages, lack of cost shifting and well established jury system) are seen to favor large damage awards through practice and procedure.
Thus, many large multi-national contracts now contain a choice of venue to allow English and foreign based companies to arbitrate on their home turf, while at the same time designating New York or Texas law to govern the substance of the dispute. See, A Quick & Dirty Guide to London Insurance Arbitrations, The Policyholder Perspective, June 2009 (short discussion of this phenomenon). This provides companies with something of the “best of both worlds:” the advantage of well developed commercial law and a sense of control and predictability that comes with playing on one’s home field. As a result, the modern American commercial practitioner should hone his skills both in the nuances of global commercial law and appreciate the lay of the land in London arbitrations.
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