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Today, international commercial arbitration has become the most popular method for resolving disputes in international business. Business practice in the context of globalization has given rise to rather complex disputes, the resolution of which requires the appropriate specialization of judges, as well as the need to involve the most authoritative law professionals specializing in certain problems of law, to participate in arbitration courts.

One of the most reputable arbitration institutions in the international arena is the London International Arbitration Court (LCIA). In this blog post, we will unveil some secrets of its international popularity.

‘A midnight clause’

The question of which arbitration institution to choose and whether to apply to arbitration in general is decided long before disputes arise. This is the point, because international arbitration begins its legal existence at the time of the conclusion of the contract. 

And if the parties, concluding an agreement, do not include in their contract a clause on the settlement of a dispute in LCIA, then when they have a dispute, they are unlikely to be able to agree on anything, in particular on the procedure for settling it, on some specific arbitration.

Therefore, arbitration clauses or dispute settlement agreements are included in the text of the contracts. Although this is not always the case among entrepreneurs. This clause is even called ‘a midnight clause’ because it is agreed at the very last moment - at the end of commercial negotiations.

Special arbitration

Arbitration in London is especially popular among entrepreneurs wishing to resolve a business conflict in certain industries such as construction and shipping. In addition to special industry rules, parties can resolve a business dispute in London by developing and proposing their own set of rules for ad hoc arbitration.


 If you are planning to start ad hoc arbitration in London, please note that in some situations it may be longer and more costly than institutional arbitration.

Pros and Cons

Nowadays, no one doubts that international arbitration is, in fact, the only serious alternative for resolving international disputes. The legal nature also predetermines the content of the arbitration procedure, the essence of which is complete independence and autonomy in making decisions.

However, some negative aspects associated with the complication and increase in the cost of arbitration in London, as well as  some concerns about the disclosure of confidential information contribute to the fact that now alternative means to arbitration have begun to develop, that is, a conciliation procedure, mediation.

And yet, if you analyze the advantages and disadvantages of international arbitration in London, the advantages will be much greater. 

Since the arbitration procedure is based on trust, it is devoid of many formal aspects, formal mechanisms that exist in a state court. People find themselves in the state court against their will. They have a dispute - they go there to resolve this dispute. And arbitration appears as a result of an agreement between the parties. And part of this agreement is not only a special procedure but also the agreement of the parties that, when the decision is made, the parties will voluntarily execute it.

If you decide to start arbitration under the special rules in London, you have the option to proceed to the final decision without an oral hearing. Virtual hearings are especially relevant in light of the coronavirus outbreak. The conservative arbitration community is forced to become more open towards technology; a large number of online seminars are held on adapting arbitration to new conditions. Instructions and guidelines for conducting virtual arbitration hearings in London have been prepared and are already widely used.

For more information please contact the IQ Decision UK team. We provide legal advice on the settlement of special disputes in the UK and other jurisdictions upon request.