Over the past 15-20 years, many of the most significant transactions involving Russian business have been concluded under English law and included an arbitration clause ordering that all disputes related to the conclusion and execution of these transactions be referred to the London International Arbitration (LCIA).
If a dispute arises between the parties to such a transaction, the party believing that its rights have been violated can only resolve the dispute by referring it to the London International Arbitration prescribed by the contract, the procedure for considering cases in which is not as clear as it seemed at the conclusion of the transaction. In addition, very often the parties in conflict do not understand what time and material costs they may incur in connection with the resolution of the case in the LCIA.
We offer you an algorithm – a sequence of actions that, in our opinion, should be taken if your contract includes provision for the transfer of disputes arising under it to the London International Arbitration (LCIA).
Using the algorithm proposed by us, you have the opportunity – having assessed the prospects and your willingness to bear the costs associated with the process – to exit it at any of the stages indicated below, paying only the cost of the current stage of work. This is important to take note of, since your opponent can enter into negotiations or express their intention to conclude a settlement agreement at any of the designated stages as well, assessing the real possibility of losing.
MGAP Law Office, together with English partners specializing in representing clients in LCIA, prepares a brief written opinion on the documents submitted by you.
The conclusion includes:
Term: ten working days from the date of submission by the client to the MGAP Law Office of a complete package of documents:
The cost of this stage of work is formed after the MGAP Law Office receives the entire package of documents on the case from the client.
On the basis of the certificate and documents submitted by the client, parallel with stage 1, it is possible to apply to judicial funds (litigation funds) in order to find out the readiness of the funds to finance the costs of the LCIA proceedings and the amount of the fund’s remuneration. The remuneration ranges from 10% to 50% of the amounts won and depends on the fund’s assessment of the prospects of the trial.
It is also possible to apply to judicial funds after receiving an opinion on the results of the first stage of work (Stage #1).
If the client decides to apply to the LCIA, we prepare and submit a set of documents for judicial proceedings (request for arbitration) with mandatory payment of the registration fee for filing documents (the amount of the fee will be specified at the time of applying to the LCIA).
The costs of the LCIA proceedings are divided into the arbitration costs themselves (funds paid to the court) and the costs of judicial representatives.
A preliminary estimate of the costs of the trial will be given in the conclusion on the first stage of work (Stage #1).
In our experience, the amount of expenses directly depends on the complexity of the case. At the same time, the funds paid to the court are calculated on the basis of hourly wages, based on the rates approved by the LCIA of:
All direct expenses of the court (photocopying, sending correspondence on the case, etc.) are also subject to compensation, and an additional fee of 5% of the judge’s remuneration for the general expenses of the LCIA is also collected (the rate will also be specified at the time of the request).
As a rule, the LCIA directs the parties to make advance payments in favor of the LCIA to cover the costs associated with the proceedings, in the proportions and within the time frame that the court deems appropriate. As a general rule, the court does not begin the proceedings until the required amounts are received into its account. If one of the parties refuses to make any payment to cover the court costs in accordance with the court order, the court may oblige the other party to make the corresponding payment. At the same time, both the plaintiff and the defendant are jointly and severally liable to the court in connection with the arbitration costs.
The term of consideration of a case in the LCIA is about one year.
Simultaneously with the stage described above (Stage #3), we recommend taking actions to search for the opponent’s assets and seize them. The jurisdiction and the body authorized to take such measures will directly depend on the type, ownership and location of the assets: the state court of the relevant foreign jurisdiction, a request for measures directly to the LCIA, or interim measures in a Russian court.
The duration and cost of this stage depends on the jurisdiction of the dispute.
If a positive LCIA decision is received, measures should be taken to recognize and enforce the LCIA decision in the State in which the losing party is registered or in which its assets are located.
The cost of this stage depends on the jurisdiction of the dispute.
The duration of this stage is 4-6 months.