LCIA Terms and Conditions for Fundholding effective 1 December 2023 Download PDF Download Form The Fundholding Terms and Conditions are applicable where the LCIA agrees to act as fundholder as a standalone service in arbitrations that are not administered by the LCIA. The LCIA will receive funds to be paid by a Party or Parties to such an arbitration for the purpose of securing the payment of the Arbitration Costs and the LCIA will use such funds to make payments in satisfaction of those costs, in accordance with the terms and conditions. Article 1 Fundholding Services Article 2 The LCIA’s Approval to Provide Fundholding Services Article 3 Written Communications Article 4 Advance Payment for Costs Article 5 Tribunal Secretary Article 6 Fees and Expenses of the Arbitrator(s) and Tribunal Secretary Article 7 Cancellation and Postponement Charges Article 8 The LCIA’s Fees Article 9 Notification of Relevant Events During the Proceedings Article 10 Payments from Advance Payments for Costs Article 11 Payments to Third Parties from the Fundholding Account Article 12 Financial Summary Article 13 Final Request for Payment Article 14 Closure of the Account Article 15 Compliance Article 16 Data Protection Article 17 Limitation of Liability Article 18 Governing Law and Jurisdiction Article 1 Fundholding Services 1.1 In its sole discretion, and without the need to state any reasons, the LCIA offers a fundholding service for arbitrations not otherwise administered by the LCIA (Fundholding Services), in which the LCIA will receive funds to be paid by a party or parties to such an arbitration (Party or Parties) for the purpose of securing the payment of the costs of the arbitration, as defined below. The LCIA will use such funds to make payments in satisfaction of those costs. 1.2 Subject to Articles 2.1 and 2.2, the following terms and conditions effective from 1 December 2023 (Fundholding Terms and Conditions) shall apply to any Fundholding Services requested (Request) by a Party, the Parties, an arbitrator or any or all of the arbitrators (Arbitrator(s)) and any tribunal secretary appointed in the arbitration (Tribunal Secretary), who for the purposes of these Fundholding Terms and Conditions, will each be referred to as a Fundholding Party or collectively as Fundholding Parties. 1.3 Subject to Article 1.4, the costs of an arbitration for which the LCIA can provide Fundholding Services (Arbitration Costs) consist of: (a) fees and expenses of the Arbitrator(s) and Tribunal Secretary in accordance with Articles 5 and 6 below; (b) fees charged by the LCIA for providing the Fundholding Services in accordance with Article 8 below; and, if applicable, (c) fees of third parties providing a service in relation to the proceeding, such as hearing rooms, communications technology, and other support services, and any expert appointed by the Arbitrator(s) in accordance with Article 11 below. 1.4 Subject to the LCIA’s approval of a Request in accordance with Article 2.2, the LCIA is only prepared to hold funds in GBP, USD, CAD, EUR, CHF, or SGD up to a maximum of GBP one million, or equivalent, in aggregate in any single arbitration at any time. 1.5 In addition to terms that are expressly defined to include the plural, all other references in these Fundholding Terms and Conditions to the singular shall also include the plural, where applicable, and vice versa. Article 2 The LCIA’s Approval to Provide Fundholding Services 2.1 A Request will only be considered if the following information is submitted by email or other electronic means, including via any electronic filing system operated by the LCIA, to [email protected], marked “Request for fundholding” in the subject line: (a) a copy of the arbitration agreement or the underlying agreement containing the arbitration clause; (b) the fundholding registration form (Annex A) (Fundholding Registration Form) completed by one or more of the Fundholding Parties; (c) a confirmation email from each Fundholding Party that they agree to these Fundholding Terms and Conditions and the contents of the Fundholding Registration Form; (d) if applicable, confirmation from each Fundholding Party that requests for payment require the preliminary approval of the presiding Arbitrator (see Article 10.3); (e) an email from each Fundholding Party confirming their respective bank account details; and (f) confirmation that a non-refundable fee of £1,950 (Registration Fee) has been deposited in the LCIA’s bank account. 2.2 Once the LCIA has received the Request and the Registration Fee in accordance with Article 2.1, the LCIA will decide in its sole discretion, and without the need to state any reasons, whether it is willing to provide the Fundholding Services and will inform the Fundholding Parties of its decision as soon as practicable. 2.3 No Party should deposit or seek to deposit funds with the LCIA (other than the Registration Fee) before the LCIA has confirmed its agreement to provide the Fundholding Services in accordance with Article 2.2. Otherwise, and unless the LCIA obtains satisfactory additional information, it may, in its sole discretion, and without the need to state any reasons, return the funds to the account from which they were paid. 2.4 If the Fundholding Parties wish that a Party, Arbitrator and/or Tribunal Secretary (Additional Fundholding Party) should be added to the Fundholding Parties, the Additional Fundholding Party shall confirm their agreement to these Fundholding Terms and Conditions by email to the LCIA. The Additional Fundholding Party shall also complete the relevant sections of the Fundholding Registration Form, agree on its contents with the other Fundholding Parties and submit the revised Fundholding Registration Form to the LCIA. The other Fundholding Parties shall confirm by email to the LCIA that each Fundholding Party agrees with the contents of the revised Fundholding Registration Form. 2.5 The LCIA shall decide in its sole discretion, and without the need to state any reasons, whether to provide Fundholding Services to the Additional Fundholding Party. If the LCIA consents to provide Fundholding Services to the Additional Fundholding Party, the Additional Fundholding Party becomes a Fundholding Party. 2.6 If the LCIA does not consent to provide the Fundholding Services to the Additional Fundholding Party, the LCIA will inform the Fundholding Parties as soon as practicable. 2.7 If at any time during the arbitration a Fundholding Party resigns, retires, or otherwise withdraws from the arbitration, that Fundholding Party, or one of the other Fundholding Parties, shall inform the LCIA as soon as practicable. The procedure in Articles 2.4 to 2.6 shall be followed with respect to any replacement of such a Fundholding Party. 2.8 Except for the changes provided for in Articles 2.4, 6.2 and 10.3, any other amendments to the details submitted in the Fundholding Registration Form require notification only to the LCIA and all Fundholding Parties in accordance with Articles 3.1 and 3.2. Article 3 Written Communications 3.1 Unless otherwise directed by the LCIA, all communications shall be delivered in electronic form to [email protected] and any communication so delivered shall be treated as having been received. 3.2 When a Fundholding Party communicates with, or copies correspondence to, the LCIA and other Fundholding Parties in connection with the Fundholding Services, that Fundholding Party shall: (a) prominently quote the LCIA case reference number; and (b) use the contact details set out in the Fundholding Registration Form, unless new details have been provided in accordance with Article 3.3. 3.3 If there is any change to the contact details of a Fundholding Party (or a Party’s legal representatives authorised to act on legal matters for the Party, and who is on the record in the arbitration (Legal Representatives)), that Fundholding Party shall promptly inform the other Fundholding Parties and the LCIA in writing of the new contact details, and such details should then be used. 3.4 Unless and until the Fundholding Party informs the other Fundholding Parties and the LCIA of any change, the other Fundholding Parties and the LCIA are entitled to continue using that Fundholding Party’s previous contact details (including the contact details for the previous Legal Representatives). Article 4 Advance Payment for Costs 4.1 The Arbitrator(s) may direct the Parties at such times as they think appropriate to make one or more payments to the LCIA (Advance Payment for Costs). Any such direction shall be notified to the LCIA at the time that it is made, failing which the LCIA cannot accept funds and may return them to the account from which they were paid. 4.2 If a Party fails to make a payment as directed under Article 4.1, the Arbitrator(s) may direct another Party to make a further Advance Payment for Costs in an equivalent amount to allow the arbitration to proceed. 4.3 The LCIA will only accept Advance Payments for Costs, and any other payments in connection with the Fundholding Services, from a Party or a Party’s Legal Representatives, and the LCIA's acceptance of payments is subject to Article 15. 4.4 All payments shall be made by direct bank transfer to the LCIA’s bank account as directed by the Arbitrator(s), quoting the LCIA case reference number, and indicating which Party is making the payment. 4.5 Once a payment has been identified and allocated, the LCIA will issue an acknowledgement of receipt to the Fundholding Parties and will credit the amount of the payment to the balance of the account. 4.6 Payments made shall be the property of the LCIA to be disbursed or otherwise applied by the LCIA in accordance with these Fundholding Terms and Conditions. The Fundholding Parties agree that the LCIA shall not act as trustee, and its sole duty in respect of the funds received shall be to act in accordance with these Fundholding Terms and Conditions. 4.7 The Parties are not entitled to interest on any credit balance, and any interest earned from funds paid to the LCIA by the Parties shall accrue for the sole benefit of the LCIA. Article 5 Tribunal Secretary 5.1 If the Arbitrator(s) wishes for a Tribunal Secretary to receive payments from any Advance Payment for Costs, the Arbitrator(s) shall: (a) obtain written consent from the Parties in relation to: (i) the relevant fee rate; (ii) any right to reimbursement of other charges and expenses; (iii) the formula by which any cancellation charges shall be calculated; and (b) provide to the LCIA: (i) the information agreed to in Article 5.1(a); and (ii) the email address, postal address, and telephone number of the Tribunal Secretary. 5.2 The LCIA will notify the Fundholding Parties of its approval for the Tribunal Secretary to request and receive payments in accordance with Article 5.1, in the absence of which the Tribunal Secretary shall not be entitled to request and receive payments in accordance with these Fundholding Terms and Conditions. 5.3 If the Tribunal Secretary is replaced, the procedure set out in Articles 2.4 to 2.6 must be followed before such person will be entitled to request payments. Article 6 Fees and Expenses of the Arbitrator(s) and Tribunal Secretary 6.1 The Parties shall be jointly and severally liable to the Arbitrator(s), and to the Tribunal Secretary, for their charges and expenses incurred in connection with the arbitration at the rates agreed with the Parties and recorded in the Fundholding Registration Form, together with any applicable value added tax, tax equivalent to value added tax or other sales tax. 6.2 If the rates agreed with the Parties for the Arbitrator(s) and/or Tribunal Secretary change from those recorded in the Fundholding Registration Form, the Fundholding Parties shall inform the LCIA promptly, agree on a revised Fundholding Registration Form and submit the revised Fundholding Registration Form to the LCIA reflecting the change together with confirmation by email that each Fundholding Party agrees with the contents of the revised Fundholding Registration Form. Article 7 Cancellation and Postponement Charges The Parties shall be jointly and severally liable to the Arbitrator(s) and to the Tribunal Secretary (if any) for any applicable cancellation or postponement fees (including any applicable value added tax, tax equivalent to value added tax or other sales tax) which shall be charged at the rates recorded in the Fundholding Registration Form (or any revised Fundholding Registration Form in accordance with Article 6.2). Article 8 The LCIA’s Fees 8.1 The Parties shall be jointly and severally liable for the LCIA's fees and expenses. 8.2 The LCIA will charge the Parties fees for time spent performing the administrative functions necessary to provide the Fundholding Services, at the following rates, as amended from time to time in its sole discretion, and without the need to state any reasons:1 (a) for the Registrar, or Deputy Registrar: £300 per hour; (b) for Senior Counsel or Counsel: £285 per hour; (c) for Casework Administrator functions: £220 per hour; and (d) for Casework Accounting functions: £190 per hour. The rates provided above exclude UK value added tax (UK VAT). 8.3 The LCIA will charge the Parties expenses, if any, incurred by the LCIA in connection with the Fundholding Services (such as postage, telephone, travel, communications technology etc) and additional support services, whether provided by the LCIA from its own resources or otherwise. 8.4 UK-based Parties shall be jointly and severally liable to the LCIA for any UK VAT chargeable on or in respect of the provision of Fundholding Services by the LCIA and shall include their UK VAT registration numbers in the Fundholding Registration Form. 8.5 The LCIA will periodically render invoices for its fees and expenses. Once invoices are rendered, the LCIA will deduct the fees directly from the account in accordance with the payment terms of its invoice. 8.6 Any bank charges incurred on any transfer of funds by or to the Parties shall be borne exclusively by the Parties. Article 9 Notification of Relevant Events During the Proceedings The Arbitrator(s) and the Tribunal Secretary have an ongoing obligation for the duration of the arbitration to ensure that the LCIA is copied in on, or informed of, all relevant correspondence concerning, and is notified of, any material changes or significant events that impact the provision of Fundholding Services. Article 10 Payments from Advance Payments for Costs 10.1 An Arbitrator and/or the Tribunal Secretary may make a request for payment to the LCIA in accordance with these Fundholding Terms and Conditions, copying in any other Arbitrators and the Tribunal Secretary. 10.2 Requests for payment shall: (a) provide details of the bank account into which the payment should be made; (b) confirm the currency in which the payment should be made (GBP, USD, CAD, EUR, CHF, or SGD); (c) where the request relates to fees incurred in carrying out the arbitration, include an invoice that details the time spent at the rates that have been agreed with the Parties; (d) where the request relates to charges or expenses incurred as a result of the arbitration, attach receipts showing that such charges or expenses were incurred; (e) where the request relates to a cancellation charge, be calculated in accordance with Article 7; and (f) be consistent with the rates recorded in the Fundholding Registration Form (or any revised Fundholding Registration Form in accordance with Article 6.2). 10.3 Where all the arbitrators, and the Tribunal Secretary, are Fundholding Parties and each of the Arbitrators have expressly confirmed in the Fundholding Registration Form that requests for payment require approval by the Arbitrator indicated to be the presiding Arbitrator (Presiding Arbitrator), the Presiding Arbitrator shall inform the LCIA of such approval for each request for payment so that payment can be made in accordance with Articles 10.6 and 10.7. If such approval is not provided within five business days of the LCIA’s receipt of a request for payment made in accordance with Articles 10.1 and 10.2, the LCIA will proceed on the basis that no approval is required. Any change to the relevant section of the Fundholding Registration Form requires the Fundholding Parties to agree on a revised Fundholding Registration Form and to submit to the LCIA the revised Fundholding Registration Form reflecting the change together with confirmation by email that each Fundholding Party agrees with the contents of the revised Fundholding Registration Form. 10.4 When requesting a payment, each Arbitrator and the Tribunal Secretary shall inform the LCIA if the request is their final request for payment. 10.5 As soon as reasonably practicable after receiving a request for payment, if there is more than one person potentially entitled to make a request for payment, the LCIA will invite the remaining Arbitrator(s) and/or Tribunal Secretary to make requests for payment, or to inform the LCIA that they do not wish to request a payment at that time. The LCIA will not issue further reminders to any other Arbitrator and/or Tribunal Secretary potentially seeking payment. Prior to making a payment, the LCIA will provide confirmation to the Fundholding Parties that the payment will be made. 10.6 Subject to the request for payment having been approved in accordance with Article 10.3 (where applicable), and the LCIA being in receipt of sufficient funds, the LCIA will make payments as follows: (a) where at the time of a request for payment, there is only one person entitled to make such requests, the payment will be made as soon as practicable after the request; (b) where an invitation to make requests for payment has been issued in accordance with Article 10.5, payments in respect of the triggering request for payment and any subsequent pending requests for payment will be made as soon as reasonably practicable after: (i) all relevant persons have, following the Article 10.5 invitation, submitted requests for payment or informed the LCIA that they do not wish to make a request for payment at that time; or (ii) five business days have elapsed following the Article 10.5 invitation, whichever comes first; (c) thereafter if a payment is not made in accordance with this Article 10.6, the LCIA will make such payments as soon as reasonably practicable. 10.7 If the balance in the account is insufficient to meet the payment request, the LCIA will inform the Arbitrator(s) and any Tribunal Secretary. In such circumstances: (a) the Arbitrator(s) should, within 15 business days of the LCIA informing the Arbitrator(s) that the balance in the account is insufficient, direct the Parties to make an Advance Payment for Costs in accordance with Article 4; or (b) if the Arbitrator(s) fails to provide instructions to the Parties within the time limit specified in Article 10.7(a), or the Parties fail to make the payments as instructed or within a reasonable time (to be determined by the LCIA in its sole discretion, and without the need to state any reasons), the LCIA will as soon as practicable thereafter make a payment to each Arbitrator or the Tribunal Secretary who has made a request (subject to the request having been approved where applicable), of a pro-rated amount of the remaining balance in the account (less any outstanding LCIA fees and an amount to cover expected future LCIA fees). The amounts that remain outstanding after such payments have been made by the LCIA to the Arbitrator(s) or Tribunal Secretary, will be paid as soon as practicable once sufficient funds are deposited with the LCIA. Article 11 Payments to Third Parties from the Fundholding Account 11.1 The Arbitrator(s) or the Tribunal Secretary shall provide the following information to the LCIA so that the LCIA can pay a third party directly by way of deduction from the account for fees and expenses relating to the arbitration (such as payments for hearing rooms, communications technology, transcription services, and the fees of any experts appointed by the Arbitrator(s)): (a) the amount to be paid, and the currency in which the payment should be made (GBP, USD, CAD, EUR, CHF, or SGD); (b) details of the bank account into which the payment should be made; and (c) any other details necessary for the LCIA to pay the expense, such as telephone contact details of the account holder and any other details to be included in the bank transfer narration. 11.2 Subject to Article 11.1 and the LCIA being in receipt of sufficient funds, the LCIA will make the requested payment as soon as practicable after the request is received and will notify the Fundholding Parties that such payment has been made. The Parties agree that, unless otherwise notified to the LCIA in writing by all Parties, they are jointly and severally liable for payments to third parties. If the balance in the account is insufficient for the payment to be made, the LCIA will seek instructions from the Arbitrator(s). Article 12 Financial Summary 12.1 The LCIA may of its own initiative, or upon request from a Fundholding Party made in accordance with this Article 12, provide a financial summary. 12.2 A Fundholding Party who requests a financial summary may choose to inform any other Fundholding Party. In such circumstance, the LCIA will provide a financial summary requested to the Fundholding Parties copied into that request. 12.3 Any Fundholding Party requesting a financial summary shall inform the LCIA if the request is due to the arbitration either having reached, or being near to reaching, final award stage. Article 13 Final Request for Payment 13.1 If: (a) the Arbitrator(s) has informed the LCIA in writing that the LCIA is no longer required to provide Fundholding Services; or (b) no communication has been received by the LCIA from the Fundholding Parties in relation to the arbitration for a period of 12 months, and each Arbitrator has not nevertheless confirmed in writing that the arbitration is pending within 15 business days of a subsequent enquiry by the LCIA; or (c) the arbitration is stayed for a period longer than 12 months; then before closing the account in accordance with Article 14, the LCIA will invite each Arbitrator and the Tribunal Secretary to submit a final request for payment. 13.2 All persons so invited shall then as soon as reasonably practicable either submit a final request for payment or inform the LCIA that their most recent request for payment was their final request for payment. If the LCIA does not receive a final request for payment or confirmation that the most recent request was the final request for payment, the LCIA may follow the procedures in Article 14, as appropriate. 13.3 Subject to Article 13.4, once the Arbitrator(s) and the Tribunal Secretary have each made a final request for payment, and these payments have been made in accordance with Article 10, the LCIA will issue final invoices for its fees to the Parties. These fees will then be deducted directly from the account in accordance with invoice terms. 13.4 If the balance in the account is insufficient to satisfy a final request for payment as well as the LCIA’s outstanding and prospective fees in relation to the provision of Fundholding Services, the LCIA may in its sole discretion, and without the need to state any reasons, choose to make the relevant payment only once the balance of the account is sufficient to cover both the final request for payment and the LCIA’s outstanding and prospective fees. In such circumstances, the LCIA’s outstanding and prospective fees will be deducted first. Article 14 Closure of the Account 14.1 Once it has taken the steps set out in Article 13, the LCIA will provide a financial summary to the Fundholding Parties. 14.2 If a financial summary shows that the account has no balance remaining, the LCIA may close the account. 14.3 If the financial summary shows an excess amount remaining in the account, this amount will be paid: (a) in accordance with any written agreement between the Parties, or if the Parties do not agree, in accordance with the written instructions of one of the Arbitrators to the LCIA; or (b) in the same proportions and to the same Parties as the payments were made to the LCIA, if within 15 business days of the LCIA providing the financial summary (or within such greater period of time in the LCIA’s sole discretion, and without the need to state any reasons), no agreement between the Parties is notified to the LCIA, and no instructions are provided to the LCIA by one of the Arbitrators; and (c) in both instances, by the LCIA using any bank account information held by the LCIA for each Party. 14.4 Subject to Article 15, the LCIA will transfer the excess amount and provide confirmation to the Fundholding Parties that the transfer has occurred. 14.5 The LCIA will make reasonable attempts to contact the Parties in order to arrange for the transfer of the excess amount, using the contact details provided to the LCIA during the proceedings. If a response is not received from a Party so contacted within 30 days, the LCIA will provide that Party with written notice of its intention to retain the excess amount. If no response is received within a further 60 days, the Party will be deemed irrevocably to have waived any right to claim and/or receive the excess amount. 14.6 If a payment or payments have been made or excess funds have been dealt with in accordance with the procedures in this Article 14, the LCIA may close the account. Article 15 Compliance 15.1 Any dealings between a Fundholding Party and the LCIA will be subject to any requirements applicable to that Fundholding Party or the LCIA relating to bribery, corruption, terrorist financing, fraud, tax evasion, money laundering and/or economic or trade sanctions (Prohibited Activity), and the LCIA will deal with any Fundholding Party on the understanding that it is complying with all such requirements. 15.2 The LCIA may refuse to act on any instruction and/or accept or make any payment if the LCIA determines (in its sole discretion and without the need to state any reasons) that doing so may involve Prohibited Activity, or breach any law, regulation, or other legal duty which applies to it, or that doing so might otherwise expose the LCIA to enforcement action or censure from any regulator or law enforcement agency. 15.3 The Fundholding Parties agree to provide the LCIA with any information and/or documents reasonably requested by the LCIA for the purpose of compliance with laws relating to Prohibited Activity. The LCIA may take any action it considers appropriate to comply with any applicable obligations relating to Prohibited Activity, including disclosure of any information and documents to courts, law enforcement agencies or regulatory authorities. Article 16 Data Protection 16.1 Any processing of personal data by the LCIA is subject to applicable data protection legislation, and the LCIA’s data protection notice can be found on the LCIA’s website. 16.2 The LCIA and the arbitral tribunal, where such tribunal consists of a sole, two or three member tribunal and regardless of whether or not such tribunal consists of Arbitrators using the Fundholding Services, may issue directions addressing information security or data protection, which shall be binding on the Fundholding Parties, and in the case of those issued by the LCIA, also on the Arbitrators, subject to the mandatory provisions of any applicable law or rules of law. Article 17 Limitation of Liability 17.1 The LCIA is not liable, or otherwise responsible, for any loss incurred by the Fundholding Parties, or any third parties, as a consequence of the failure of, or any act or omission by, any bank or banks holding funds. 17.2 None of the LCIA (including its officers, members, and employees), the LCIA Court (including its President, Vice-Presidents, Honorary Vice-Presidents, former Vice-Presidents, and members), the LCIA Board (including any board member) and the Registrar (including any Deputy Registrar) shall be liable to any Fundholding Party howsoever for any act or omission in connection with the Fundholding Services, save: (a) where the act or omission is shown by that Fundholding Party to constitute conscious and deliberate wrongdoing committed by the body or person alleged to be liable to that Fundholding Party; or (b) to the extent that any part of this provision is shown to be prohibited by any applicable law. Article 18 Governing Law and Jurisdiction 18.1 These Fundholding Terms and Conditions, together with the Fundholding Registration Form, constitute the entire agreement between the LCIA and the Fundholding Parties concerning the provision of Fundholding Services. 18.2 These Fundholding Terms and Conditions (and any non-contractual obligations related to them) are governed by, and shall be interpreted in accordance with, the laws of England. 18.3 The courts of England and Wales shall have exclusive jurisdiction to hear and decide any action, suit or proceedings between a Fundholding Party and the LCIA (including its officers, members and employees), the LCIA Court (including its President, Vice Presidents, Honorary Vice Presidents, former Vice Presidents and members), the LCIA Board (including any board member), the Registrar (including any Deputy Registrar) which may arise out of or in connection with these Fundholding Terms and Conditions (including any non-contractual obligations related to them) and, for these purposes, each Fundholding Party irrevocably submits to the jurisdiction of the courts of England and Wales. 1 Minimum unit of time in all cases: six minutes.