Jonathan Freeman

June 19, 2015: One of the flagship events in the Mosaic calendar is without doubt the Mosaic Enterprise Challenge Grand Final. After months of preparations, regional heats and tireless work from mentors, students and staff, we made it to the Grand Final. Held at the offices of one of our many supporting partners, international law firm Hogan Lovells LLP, this year’s Enterprise Challenge Grand Final did not disappoint and was the strongest and most competitive in the seven-year history of the competition.

The winning team with Claude Littner from The Apprentice

For those who don’t know the Mosaic Enterprise Challenge, generously supported by the Apax Foundation and Nectar Trust, it is a fully immersive, business-basedannual competition for secondary school students across the UK, designed to develop and encourage their entrepreneurial skills. At the heart of the Challenge is the business simulation model developed by Totem Learning.

This year’s Challenge was nothing short of exceptional. It brought out the best in the UK’s young business brains ably supported and encouraged every step of the way by their enthusiastic mentors.I never fail to be amazed by the standard, which just seems to improve year on year, and having had close dealings with the judging panel for 2015, chaired by the formidable Claude Littner from The Apprentice, they were not only astounded by the quality of the pitches but also the confidence on display and the brilliant business ideas put forward by these ambitious youngsters.

Five schools each proudly representing a different area of the country pitched their hearts out in front of a capacity crowd. It’s impossible not to be impressed by the confidence on show from the students, some as young as 14. And it got me thinking about why initiatives such as this are so important in helping to nurture business talent and giving young people the opportunity to shine.

An experience such as the Enterprise Challenge is one which truly engages the student, helps them to think from a business perspective and to develop, so that when they do step out into the big wide world they are not completely thrown by the tasks they are being asked to perform.

The4,000 students who participated (not just the ones taking part in the Grand Final itself) have been through an incredible process involving pitching, idea generation, elimination or getting through to the next round. Experiencing success and failure. This cements the idea that business is tough and can be competitive, presenting situations where they have to do their best, reveal their personalities and put their grey matter to the test.

Mentoring is crucial in this process. Having a skilled mentor, someone with only the mentee’s best interests at heart, is massively valuable. It’s also a two-way process – the mentor through engaging with young people and understanding them, can derive a great deal of personal satisfaction and the mentee benefits from sharing the thoughts of someone with experience in a particular field or just life and business in general. Done in the correct way, mentoring is greatly beneficial to both parties.

The real skill of a good mentor comes in understanding where the mentee is coming from, why they’ve gained a particular view of life, business or people. The mentor’s role is undeniably a difficult one and this is why picking the right one is so crucial. A mentor must be skilful, knowledgeable and have experience in equal measure but in addition to this, must also know how to relay that experience so that it registers.

This year’s Enterprise Challenge Grand Final was won by Skinners’ Academy in Hackney. Their winning business concept was ‘iRoundUp’, an ingenious yet simple system whereby students can volunteer to donate spare change to a nominated charity from electronic currency stored on their ParentPay school identity cards. The cards enable parents to pay for school meals and trips via online transactions. The students are already in talks with ParentPayto introduce the scheme in thousands of schools already using the system around the UK. We are all waiting to see what happens with this hugely exciting opportunity, which shows just how well the mentoring process can work if delivered properly.

We’re already building up momentum for the Enterprise Challenge 2015/2016. If you would like to help inspire and guide young adults to help them reach their potential and would like further information about mentoring or any of the Mosaic programmes, please call 020 7566 8734 or email: mosaic@bitc.org.uk

Jonathan Freeman is Managing Director of HRH The Prince of Wales’s charitable mentoring initiative Mosaic

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Tim Evershed

April 17, 2015: Uncertainty surrounding the result of next month’s UK general election is sending the sterling on a rollercoaster against the dollar.

On April 10, the pound fell to a five-year low against the dollar as election jitters combined with weak industrial data took it from $1.4623 from $1.4931 earlier in the month. The currency recovered some lost ground the following week ($1.4833).

The rebound confounded the conventional wisdom that expected the pound to fall in the run up to the election before rising after. But, it underlined the volatile nature of the market as the polls continue to show an election that is too close to call.

The Conservative and Labour parties are neck and neck in the polls making a hung parliament, in which no party wins overall control, likely and investors fear coalition negotiations will drag on much longer than after the last election in 2010.

A note from the bank Morgan Stanley said: “Under our base case scenario of the next UK government being led by one of the major parties, we would expect renewed fiscal austerity, which will lead to a slower growth picture in the UK.”

Investors are concerned that a Labour government might be unable to deal with Britain’s deficit and will slow economic growth, especially if it has to make a deal with the Scottish Nationalist Party.

On the other hand, a Conservative-led administration could lead the UK out of the EU, particularly if it has to work with UKIP, and that is a prospect that frightens many investors and businesses.

A hung parliament could even cause a “Lehman moment” for the UK, according to Kathleen Brooks, research director at Forex.com

Brooks added: “We’ve seen volatility pick up and that’s because of the election uncertainty. We don’t know whether or not we’ll be under a Labour government that could be bad for the deficit, or under a Tory government that could take us out of Europe. Will we even have a government at all? There’s still a big chance of a hung parliament.”

The old adage is that markets hate uncertainty and that is certainly proving true with some predicting movements of up to 5 cents in either direction before and after May 7.

Currency traders are looking nervous at the moment with options, used to hedge exposures, in demand while risk reversals, a gauge of demand for options on a currency rising or falling, show a huge bias for sterling weakness against the dollar in the coming month.

Adding to this toxic mix for the pound is an inflation rate of 0% for February and March, according to the Consumer Price Index. This raises fears of deflation in the UK economy and would put pressure on the Bank of England to cut interest rates from its current 0.5%

The prospect of the UK maintaining, or even cutting, its historic low interest rates would be expected to keep the pound valuation down against the dollar.

Kit Juckes, an economist at Societe Generale, said: “I can’t see how the election can provide a positive outcome for the sterling. It’s just a source of uncertainty for international investors. Apart from the fact that it would be an enormous shock if you got an outcome where any single party could form a government, the politics just produces negative sentiment, volatility and a nervousness that has bred the sense that nobody wants to buy the pound.”

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April 8, 2015: Zaiwalla & Co, the solicitors who overturned both the United Kingdom’s and European Union’s sanctions against Iranian banks, welcomed the  framework agreement which has been reached between the P5+1 countries and Iran relating to Iran’s nuclear programme.

This deal, which was announced on April 2 night, has come about after more than a decade of negotiations. However, substantial progress in these negotiations was made only after the successful legal challenges launched by Bank Mellat, Iran’s largest private bank. Bank Mellat won its actions in the UK Supreme Court and EU courts; the sanctions against the bank were declared unlawful, and the bank is now claiming damages of $4 billion from the UK government.

In these current negotiations, the West has offered to lift the sanctions imposed against Iran in return for Iran agreeing to roll back its nuclear programme, reducing approximately two-thirds of its installed centrifuges. Iran will receive sanctions relief if it verifiably abides by its commitments under the framework agreement. The current US and EU sanctions will be suspended after the IAEA has verified that Iran has taken all of its key nuclear-related steps.

The US sanctions will be retained during the course of the deal and will allow for a re-enforcement of the same in the case of non-performance of obligations by Iran. The West’s concerted campaign of pressure, involving the imposition of a wide range of blanket sanctions on Iran’s financial, oil and gas sectors, suffered a setback when the UK Supreme Court and the European Court of Justice annulled numerous sanctions imposed on various Iranian entities. The judgment of the European Court, therefore, put pressure on the West to be more amenable in negotiations with Iran; it was widely criticised by the US administration.

Bank Mellat’s victory sent a signal that the European Court will decide cases based on the Rule of Law rather than observing political exigencies. This brought confidence to many other Iranian private entities to challenge sanctions imposed on them, and a wave of subsequent successful challenges by these entities followed. Member states of the European Union do recognise that when sanctions are declared unlawful by EU courts, the payment of damages to those suffered by sanctions has to come from the taxpayers’ pockets.

Sarosh Zaiwalla, Senior Partner of Zaiwalla & Co. LLP, who acted for Bank Mellat said: “Iran has an ancient culture of peace and goodwill towards all and this historic agreement will give momentum for start of a new relationship between Iran and the West. The Iranian people and business have suffered due to the sanctions imposed on Iran and the framework agreement will come as a welcome relief to Iranian people.”

Press release

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Kamilia Lahrichi

April 2, 2015: Russia’s Foreign Minister Sergey Lavrov courted Cuba, Nicaragua, Colombia and Guatemala during a four-day visit to South America in March 2015 to boost bilateral trade, as food shortage is hitting his country hard.

Last year, Moscow banned for one year agricultural products from the European Union, the United States, Canada, Norway and Australia, in an economic war. The US is isolating Russia for its policies in Ukraine, where a bloody conflict still rages, and for the annexation of Crimea in March 2014.

Embargoed products include beef, pork, poultry, fish, cheese, milk and dairy products, fruits and vegetables.

This radical policy has led to significant losses for Russia, which heavily depends on food imports to feed its 143.5 million stomachs.

In 2013, Russia imported nearly $23 billion worth of the banned products from the United States and the European Union mainly, according to Trade Map data. Europe is Moscow’s largest trading partner.

Products like French cheese, German sausage, Norwegian salmon or basmati rice have today vanished from Russian supermarkets.

Russia’s economy is going through the worst turbulence in President Vladimir Putin’s leadership due to Western sanctions as well as plummeting oil prices. Inflation runs at 10% and living standards have fallen significantly.

The Russian central bank imposed a steep interest rate hike to halt the ruble’s collapse – it lost more than 45% of its value against the dollar since the beginning of 2014.

Food scarcity in Russia, opportunities in Latin America

Lavrov met presidents Raúl Castro in Cuba, Juan Manual Santos in Colombia, Daniel Ortega in Nicaragua and Otto Pérez Molina in Guatemala, to get agricultural goods denied to the Russian market – behind the diplomatic rhetoric.

It is his second visit to the region since the war in Ukraine broke out.

During this 24-hour visit to Guatemala, the Russian envoy reaffirmed Moscow’s continued support for the Central American nation. He also lambasted the US sanctions against Venezuela and called for ending the American trade embargo on Cuba.

He also said that Russia wants to set up a regional centre to train Central American security officials to fight drug trafficking and terrorism.

In Nicaragua, Lavrov suggested that Russia might be keen to help build a waterway to rival the Panama Canal.

In Colombia, the Russian foreign minister and his counterpart agreed to increase bilateral trade, without saying by how much.

“We want to expand that market [Russian] and to work together [taking advantage of] the different opportunities. We all have a job to do, but also a commitment to improving trade relations,” said the Colombian Foreign Affairs Minister Mary Angela Holguin.

Lavrov expressed Moscow’s willingness to be a pillar in the development of a multipolar world order. He sought to build ties with regional unions like the Southern Common Market (MERCOSUR).

“The selection of countries is based on the USSR’s old links with the region,” said Sergio Berenzstein, a political analyst in Buenos Aires.

Communist Cuba and sovietico-sandinista Nicaragua are the United States’ historical foes and Russian allies. In 2002, Russia and Nicaragua inked a deal to axe the Central American country’s debt with the USSR.

Russia is reaping the benefits of the anti-imperialist and anti-American tendencies of these populist governments – aside from Colombia.

Yet, Nicaragua, Colombia and Guatemala are above all a pragmatic choice as Russian senior officials rarely visit these countries.

“There is a need to negotiate visa-free travel – it it hasn’t been introduced already – and expand bilateral trade,” explained Igor Danchenko, Program Research Manager on Russia and Eurasia at Sidar Global Advisors, a markets research company in Washington D.C.

Food supplies wanted

“Russia’s goal is to turn to new food suppliers as well as promote Russia’s technology and energy in developing countries with shortcomings in these areas,” said Matias Garcia Tuñón, Coordinator at the Russian Argentine Chamber of Commerce and Industry in Buenos Aires.

Boosting trade with Latin American countries would help Moscow get the foreign reserves it needs while the breadbasket region would reap the benefits of a larger consumer market.

For instance, Nicaragua exports meat, seafood, milk, cheese, peanuts and coffee to the Russian market. Moscow is interested in importing vegetables and tropical fruits it cannot grow due to its harsh climate.

Since 2013, both countries began negotiating a free trade agreement as exports to Russia are relatively low. In 2013, Nicaragua exported over $18 million to Russia – it is still a one-third increase compared to the previous year.

Cuba – Russia’s largest sugar cane supplier – exports citrus, concentrated juices, rum, tobacco and drugs in exchange for oil, auto parts and machinery and fertilizers. Russia is Cuba’s 10^th largest trading partner.

The trade balance between the two economies grew by 17% during the first six months of 2012, compared to the same period in 2011, when it reached $224.7 million.

Guatemala remains an under-developed market for Russia although its goods enjoy customs preferences in the federation since 2007. In 2013, the Central American country exported about $29 million worth of products to the Russian market and imported about $72 million.

Guatemala exports sugar, coffee, tobacco and cardamom to Russia and imports fertilizers, steel and zinc.

Finally, Colombia exports coffee and flowers (almost 60% of all exports) to Russia while Moscow supplies fertilizers and technology. Both countries are also in talks for a free trade agreement since 2013.

Moscow’s strategy in Latin America

Clearly, Moscow will not rely on these four markets only as they are too small to feed Russian customers.

Besides, distance is a challenge. “The logistical challenge to send to Russia perishable goods is mainly the time for maritime transport to San Petersburg (Russia’s main port apart from Vladivostok and Novorossijk),” explained Mr. Tuñón.

“If we estimate an average of 30 days for sea transit, in addition to the time to produce the food and sell it in Russia, it is very complicated to commercialise short-life products,” he added.

Air transport would be an interesting – albeit costly – option.

Although Moscow expects to capitalise on long-term relationships with Latin American countries, “Russia’s position in Cuba is destined to weaken because of sheer proximity to the United States and a large Cuban diaspora [there],” said Mr. Danchenko.

In addition, “since Latin America can’t be an alternative source of loans to replace the West and China/Asia, interests are limited,” he added.

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Kamilia Lahrichi

February 17, 2015: Large financial institutions, such as Bank of America and Deutsche Bank, and private investors launched a $100 million fund to ease access to clean and efficient cookstoves and fuels at the Cookstove Future summit in New York on November 21, 2014.

The Global Alliance for Clean Cookstoves (GACC), a non-profit organisation based in Washington D.C. and supported by the United Nations Foundation, organised this event to support the scale-up of clean cooking enterprises.

Business leaders and policy-makers also invested $413 million for three years in this sector. Inefficient and highly polluting cookstoves are a key environmental and health issue. More than four million people die from indoor air pollution every year.

“With 2.7 billion people relying on open fires and traditional biomass stoves to cook their food, the market potential for change is huge and the impact we can have on people’s lives is just as big,” said Baroness Lindsay Northover, Parliamentary Undersecretary of State for International Development in the United Kingdom.

GACC aims to provide clean and more efficient cookstoves and fuel to 100 million households by 2020. Since its inception in 2010, GACC and its 1,000 partners raised $50 million to boost the clean cookstoves sector.

“We need to keep developing the right technology: it has to be available, readily accessible and attractive enough so that people want it in their home,” said former Secretary of State Hillary Rodham Clinton who co-hosted the two-day summit.

Market opportunities

The clean cookstoves sector, in developing countries in particular, offers vast economic opportunities for investors around the globe.

In Bangladesh, for example, 95% of people use traditional cookstoves, said Nasrul Hamid, the country’s State Minister of Power, Energy and Mineral Resources. Bangladesh has recently developed an action plan to distribute 30 million cookstoves.

“From an African perspective, our governments are less in a position to finance these initiatives than in the Western world,” said Hanna Tetteh, Minister of Foreign Affairs and Regional Integration of Ghana.

Over 17% of the Ghanaian population relies on solid fuels and charcoal.

Funding from large financial institutions provides the opportunity to venture into the clean cooking sector of developing markets.

Deutsche Bank, one of the investors in the GACC fund, had plans to launch an additional $4 million fund in December 2014 to facilitate access to clean and efficient cookstoves.

“The purpose of the fund is to offer small and medium-sized enterprises that are growing and that have the potential to increase their sales through debt, the opportunity for working capital or to purchase assets,” explained Moya Connelly, Senior Consultant at Deutsche Bank.

The type of cookstoves they invest in ranges in price from $10-$15 to $80.

“Less expensive cookstoves are purchased through cash. But $80 ones need to be financed through a financial institution, as it is expensive for someone in Africa or Asia,” she added.

Overcoming challenges

Despite numerous market opportunities, impact investors have to be aware of the challenges of putting money in an immature and highly fragmented sector such as clean cooking.

They need to be ready to invest fund and offer technical and business development assistance to small companies. The focus is first on capacity building.

“For the moment, the returns are harder to justify because there are more emerging businesses,” said Jacob Moss, Director of the United States Cookstoves Initiatives at the United States Department of State.

Yet, impact investors are increasingly interested in this challenge.

For instance, Carlo Figa Talamanca, an Italian entrepreneur, took over the clean charcoal company two French non-governmental organisations set up in Cambodia.

“Their business was not financially sustainable,” he explained. “But I really believed in it. I lost money the first year but now I am making a profit,” he said.

Carlo is the Chief Executive Officer of the zero-smoke charcoal production company Sustainable Green Fuel Enterprise.

As in many emerging markets, he had to convince consumers of using his new technology, although he was selling it at the same price or slight more expensive than regular, highly polluting charcoal depending on the season and the area.

Cambodians were suspicious of a technology that replaces traditional cooking methods and solid fuels.

Two birds, one stone

Investing in clean and efficient cookstoves and fuels is a means to develop a business while making a positive impact on people’s lives, such as significantly reducing greenhouse gas emissions.

Clean cookstoves promotion is an under-covered area in investment and development. Yet, the smoke from open fires and traditional cookstoves is the fourth killer in the world, ahead of HIV and tuberculosis. Traditional cookstoves produce the same amount of smoke 400 cigarettes do in one hour.

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Jaya Smitha Menon

December 24,2014: For Barclays, the business of banking goes beyond the profit and loss statements they generate every quarter. They want to play a broader role in the community in which they live and do business. Their goal is to help change 5 million young futures by 2015.

In UK, Barclays is supporting the growth of Street League, a UK football charity. Street League uses the power of football to help unemployed 16 to 25-year-olds get into work and training across the UK. It provides an eight-week football and education programme, which develops key employability skills such as communication and teamwork, and offers several nationally-recognised qualifications. At the end of Street League ‘Academy’ programmes across the UK, 81% of graduates move into work, training or education.

In addition to the financial support Barclays provides to Street League, the employees help by running mock interviews, CV-writing and financial literacy sessions for participants. Paulette Cohen, Head of Global Programmes, said: “For 10 years, Barclays has been investing in sports facilities and programmes in the UK communities where they are most needed — creating sustainable resources and helping young people achieve their ambitions.”

Corporates like Barclays believe that businesses grow only if all the stake holders around it grow; be it the employees, customers, stockholders, environment or the society around. Corporate sustainability stems from this belief of enterprises. ‘Giving back to the community’, is a mantra the corporates have already chanted. But what differentiates corporate sustainability from corporate social responsibility is doing responsible business and a belief that sustainable business is the one which carries every stakeholder together in the organisation’s growth. Sustainability means looking inside and outside the organisation to understand the social and environmental impact it creates.

Today, over 72% of S&P500 companies are reporting on sustainability. These companies measure their sustainability efforts and bring out detailed report at regular intervals similar to the financial reports public companies publish every quarter. The role of a chief sustainability officer has also expanded in the last few years.

Adding value to the balance sheet

However, sustainability is not just about growing together. A recent study by the Smith School of Enterprise and the Environment (SSEE) at the University of Oxford and Arabesque Asset Management provides clear academic evidence of the financial rewards of corporate sustainability. The report reveals a strong correlation between corporate sustainability and stock price performance, with 80 per cent of research sources showing that stock prices are positively influenced by good sustainability practices.

The report titled ‘From the Stockholder to the Stakeholder’ also reveals that 88 per cent of studies link strong environmental, social and governance (ESG) practices with better operational performance in a company, ultimately translating into cash flows. Factors ranging from good workforce relations, environmental management and executive compensation are cited as amongst the most impactful on improved operational performance. Ninety per cent of analysed studies reveal that high ESG standards will lower the cost of capital for companies, with superior sustainability standards improving a corporation’s access to capital.

Doing responsible business

For every organisation, sustainability efforts are based on three pillars; compliance, efficiency and innovation. Understanding where the organisation stands in terms of compliance with environmental, social and cultural standards; improving the operational efficiency to achieve these standards and innovating to do responsible business based on ESG standards form the foundation of all sustainability efforts.

London Stock Exchange recently announced that it will partner with the United Nations Sustainable Stock Exchanges (SSE) initiative, joining nine other exchanges in the US, Europe, Africa and Asia to promote sustainable business practices among publicly listed companies worldwide.

“Stock exchanges have a crucial role to play in enhancing both the quality and quantity of environmental, social and corporate governance reporting by companies listed on their exchanges,” said Fiona Reynolds, Managing Director, Principles for Responsible Investment. “Only 3 percent of the world’s largest companies currently disclose information about their ESG performance. Better disclosure will improve the usefulness and comparability of information being reported in each market, enabling institutional investors to better manage risk and make more informed investment decisions.”

Food and beverages giant Nestle’s sustainability efforts include doing responsible sourcing. With consumers becoming increasingly inquisitive about the raw material used in the products they buy, Nestle felt the need to make their supply chain transparent and traceable. Nestle insists that its suppliers across the globe adopt internationally recognised good agricultural practices (GAP) that address environmental, social and economic sustainability for on-farm processes and result in the production of safe and quality food and non-food agricultural products. Such initiatives by organisations increase their credibility and brand loyalty, which has a long lasting impact on their balance sheets. “Profitability and sustainability are not mutually exclusive; quite the opposite in fact. It is almost a given that being more sustainable also improves the robustness and longevity of a company, but the other consideration is how it improves reputation. With growing consumer interest in sustainability, the reputational benefits that integrating sustainability brings are invaluable,” says Rebecca Pritchard, head of business banking, Triodos Bank.

A pioneer in the field of ethical and sustainable banking, Triodos Bank does business only with companies with good sustainability practices. Pritchard says, “Ethical investing is the only kind of investing we do. Every investment decision we make follows a rigorous research and selection process to ensure that the money our customers entrust to us is invested only in companies with the best sustainability performance. Our SRI funds invest only in companies that achieve a best-in-class combination of social, environmental and economic performance”.

Triodos Bank selects companies on the basis of strict social, environmental and governance criteria, and after a rigorous research and selection process that provides a firm foundation for every investment decision. “We also have an active engagement programme with the aim of raising awareness of sustainability, stimulating action and creating lasting change,” adds Pritchard.

In the last decade, companies hiring chief sustainability officers (CSO) have increased considerably. CSOs are the champions of the sustainability efforts of the organisation. One of the major challenges for a CSO is to convince the chief financial officer (CFO) to fund these sustainability efforts. But with growing evidence of sustainability adding value to business and balance sheets, the role of a CSO has become more strategic and evolved. But CSOs insist that an oversight and insistence from a board will go a long way in ensuring a sustainable organisation.

Sustainability is not the priority of corporate giants alone. It is a virtue in which every business should invest in.

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Nick Greenwood and Richard Ellison

November 11, 2014: The London Court of International Arbitration (LCIA) Arbitration Rules 2014 (the “2014 Rules”), which entered into force on October 1, represent – in the words of the director general of the LCIA – “evolution, not revolution”. This is an understandable description; the previous LCIA Rules, introduced in 1998, were generally regarded as effective, and form the basis of the 2014 Rules. The latter nevertheless contain significant changes, introduced for the most part in response to those areas where the 1998 Rules no longer accurately reflected current arbitration practice.

The most significant of these changes are set out below. The importance of these lies not only in the fact that they should influence the parties’ choice of arbitral forum when negotiating new contracts, but also insofar as any existing contract submitting disputes to LCIA arbitration using the LCIA’s recommended arbitration clause will (other than where specified below) be subject to the 2014 Rules for any disputes arising on or after October 1, 2014.

Joinder and Consolidation

The 2014 Rules retain the provision in the 1998 Rules for third parties to be joined to an arbitration, with their consent, on the application of a party thereto. However, article 22.1(ix) of the 2014 Rules also allows a tribunal “to order, with the approval of the LCIA Court, the consolidation of the arbitration with one or more other arbitrations into a single arbitration…where all the parties to the arbitrations to be consolidated so agree in writing”. Articles 22.1(x) and 22.6 extend this power such that a tribunal can order the consolidation of multiple arbitrations between the same parties under the same arbitration agreement or compatible arbitration agreements, provided that no other tribunal has been constituted.

Consolidation of arbitrations has become a particularly frequent concern in recent years, the aim being to avoid the expense of multiple parallel proceedings, particularly in sectors such as energy and construction, where disputes often arise out of chains of contracts with multiple parties. These provisions bring the LCIA into line with existing ICC practice, and attempt to pre-empt the common problem of ensuring fairness in party nomination of arbitrators where proceedings are to be consolidated, by ensuring either that the parties have expressly consented to consolidation (under article 22.1(ix)) or that they have already had the opportunity to select an arbitrator (under articles 22.1(x) or 22.6).  Article 5.8 also permits the “exceptional” use of more than three arbitrators, presumably as an additional safeguard in this regard. The intention appears to be that written consent to consolidation must be given at the time such consolidation is proposed; it remains to be seen whether this can be extended to a situation where an existing arbitration agreement states that the parties give their express consent to consolidation.

Notwithstanding the pragmatic and relatively restrictive approach adopted by the LCIA, consolidation of arbitrations remains potentially legally problematic in ways which are beyond the scope of this article, and it should not be assumed that either joinder or consolidation will automatically be possible.

Emergency relief

Article 9B of the 2014 Rules provides for the appointment of an Emergency Arbitrator by the LCIA Court, “in the case of emergency” before the formation of an arbitral tribunal. The existing provision in the 1998 Rules for expedited formation of the full tribunal has been retained, as article 9A.  An Emergency Arbitrator is to be appointed within three days of receipt of a request where possible, and (other than in exceptional circumstances) should rule on any application for emergency relief within 14 days of such appointment.

This provision also mirrors those available under the arbitration rules of various other bodies, and aims to avoid, where possible, the need for parties to request interim relief in support of arbitration from national courts. It will be particularly useful in situations where there is a risk of destruction of evidence, or of dispersal of assets. It should, however, be noted that article 9B.12 expressly reserves a party’s right to seek emergency relief from a national court as an alternative, or even in addition, to a request made to an Emergency Arbitrator.

The provisions of article 9B do not apply to arbitrations arising out of arbitration agreements concluded prior to October 1, 2014, without the written consent of both parties.

Powers of the tribunal and the LCIA court

Under article 18.4 of the 2014 Rules, a tribunal may refuse to approve any addition or change to a party’s legal representative(s) “where such change or addition could compromise the composition of the Arbitral Tribunal or the finality of any award”. This is an unusual provision which we expect would be rarely used in practice, in light of the general principle of freedom of party choice of legal representation. This provision only applies to additions or changes to legal representatives, the intention being that if an existing legal representative’s relationship with a proposed arbitrator would potentially compromise the tribunal, the natural course of action would be to replace this arbitrator.

The tribunal also has the power, under article 18.6, to issue a written reprimand or caution, or take “any other measure necessary”, in the event of a breach by a party representative of the LCIA’s general guidelines for conduct (discussed further below). This power is augmented by an express provision (reflecting existing practice) in article 28.4 that the tribunal can take the conduct of the parties into account when making a costs award. It remains to be seen whether tribunals will infer from articles 18.6 and 28.4 that the conduct of parties’ representatives should be so taken into account, and also whether they will feel able to use article 18.6 to exclude a party’s legal representative from the proceedings.

A significant extension of the powers of the LCIA court is set out in article 10.2, which allows the LCIA court to exclude an arbitrator after their appointment on various, quite extensive, grounds. Again, this provision is unusual, conflicting as it does with the fundamental right of a party to appoint their own arbitrator; presumably, any arbitrator so excluded would be replaced by an arbitrator nominated by the same party, but we would in any event expect this provision to be used sparingly, not least due to the administrative complexity involved in replacing an arbitrator.

Conduct of legal representatives

An annex to the 2014 Rules sets out a series of guidelines for the conduct of legal representatives in LCIA arbitration, with which any legal representative is obliged to agree to comply.  This responds to long-standing concerns that legal representatives from different jurisdictions in international arbitration have different professional conduct obligations (or, in the case of unregulated representatives, none whatsoever). The LCIA’s guidelines represent an attempt at levelling this uneven playing field.  It remains to be seen how much practical impact these guidelines will have; they fall significantly below the professional conduct requirements, for example, of English solicitors. Nevertheless, as noted above, the tribunal has – at least in theory – the power to exclude a legal representative for a failure to adhere to the guidelines.

Conclusion

The 2014 Rules have been generally well-received by the arbitration community, and represent for the most part a welcome update of the 1998 Rules. In addition to the major changes set out above, a series of further measures aimed at making the arbitral process more rapid and efficient were also included. Time will tell whether, in the increasingly competitive international arbitration market, the 2014 Rules have a significant impact on the number of LCIA arbitrations compared to those held under the rules of the ICC and other major arbitration bodies, but an understanding of the 2014 Rules will be crucial in making a decision as to the most appropriate arbitration choice for future contracts.

Nick Greenwood is a partner and Richard Ellison an associate of the London Litigation Practice of Global Law Firm, Morgan Lewis

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