Between 2008 and 2011, the London Court of International Arbitration (“LCIA”) entered into arrangements with three jurisdictions to support the establishment and development of new international arbitral institutions, each bearing the LCIA brand. First came the synergy with the Dubai International Finance Centre through the DIFC-LCIA Arbitration Centre in 2008, followed by LCIA India in 2009 and finally, in 2011, the LCIA-MIAC Arbitration Centre in Mauritius.

In the past four years, the LCIA’s relationship with each of these three institutions has been radically reviewed. In 2015, the DIFC-LCIA was relaunched (after a long period without a functioning local administration) with a new, separate Board of Trustees and a revised set of agreements with the LCIA governing the relationship between them.

In 2016 LCIA India was closed, and any cases, which would have fallen under its auspices were transferred to be administered at the LCIA in London.

It does not necessarily come as a surprise, therefore, that the LCIA has now revisited its relationship with LCIA-MIAC, formerly governed by a Joint Venture Agreement (“JVA”) between the LCIA, the Government of Mauritius and a local company, MIAC Limited.

The JVA has been terminated by mutual consent, entirely severing the LCIA’s relationship with the arbitral institution and effectively eliminating the LCIA-MIAC Arbitration Centre, as we know it. However, LCIA-MIAC will be replaced by an independent arbitral institution in Mauritius, known simply as “Mauritius International Arbitration Centre (“MIAC”)”, without LCIA involvement. The termination takes effect from 27 July 2018 and contractual parties should not include clauses for LCIA-MIAC arbitration in their contracts after this date.

LCIA-MIAC’s relationship with the LCIA was a very close one. The LCIA Court performed the same functions for arbitrations under the rules of LCIA-MIAC as it did for LCIA arbitrations. The LCIA also supported LCIA-MIAC’s accounting and IT functions. The separation of the LCIA from MIAC will therefore require significant new structures to be put in place in Mauritius to handle the aspects of arbitrations, which previously would have been carried out by the LCIA.

The news of the termination has only just broken, and the precise structure of the new institution is not yet known. However, some details of the new set-up have already been provided. The new institution will have its own Advisory Board, chaired by Prof. Emmanuel Gaillard, and an independent secretariat with co-Registrars.

Whilst it has not been explicitly stated, it appears from the press release, which accompanied the announcement that MIAC will receive funding from the Government of Mauritius, just as LCIA-MIAC did under the JVA.

The transitional arrangements have been described in summary, with one notable feature. Arbitration agreements entered into before 31 August 2018, providing for arbitration under the rules of LCIA-MIAC, will be construed as providing for administration of arbitrations by the LCIA. This may be of particular interest to parties to LCIA-MIAC arbitration agreements, because LCIA-MIAC was always described as an African arbitral institution, whereas disputes arising (at any time) out of LCIA-MIAC arbitration agreements made before 31 August 2018 will be referred to London and administered by the LCIA. However, as part of the transitional arrangements agreed with the LCIA, MIAC shall administer cases arising from LCIA-MIAC clauses, which were inadvertently entered into on or after 1 September 2018.

Whilst the policy of the LCIA and the new MIAC on the transitional arrangements is quite clear, it is nevertheless conceivable that disputes may arise between parties as to whether it is appropriate for the LCIA to administer cases arising under arbitration agreements providing for LCIA-MIAC arbitration.

This may mean that parties to contracts containing LCIA-MIAC clauses may wish to review these clauses, so as to either confirm that the LCIA will administer arbitrations arising under them, or to vary the clause so as to provide expressly for MIAC arbitration, or an alternative African institution.

Alternatively, parties who fall into a dispute arising out of a contract containing an LCIA-MIAC clause may wish to consider entering into a submission agreement to vary the choice of institution. In some cases, of course, agreement between the parties will not be possible, in which case the arbitration will default to London, depending on the date the clause was made.

When I was appointed to establish and promote the institution, it was clear that the project to make Mauritius a popular seat of arbitration, and to establish a successful arbitral institution, was a long-term endeavour. As Professor Jan Paulsson (then President of ICCA) said when making the opening speech at the first Mauritius International Arbitration Conference in 2010, Mauritius “understands that this is not a sprint, but an endurance race. This takes patient agriculture – the harvest is perhaps 15 years in the future. But Mauritius needs no lessons in this matter. Its remarkable offshore sector is testimony to the virtues of commitment and patience.”

Any casework, which we did manage to secure in the first few years, before significant numbers of contracts could be made containing LCIA-MIAC clauses, was to be considered a bonus.

No doubt questions have been asked about whether LCIA-MIAC could ever achieve its ambition to be a leading arbitral institution in an African venue. Some of these questions would have queried whether progress has been affected by the existence of the MARC Arbitration Centre, which has operated in Mauritius for many years. The success of institutions like KIAC in Rwanda may suggest that it is essential for a nascent institution to effectively secure most of the local arbitration market. As a further challenge, MARC has recently strengthened its procedures and governance, and has been very active in promoting its enhanced set-up in recent months.

Those questions will now have to be answered by MIAC without the support of the LCIA. This is obviously disadvantageous in some respects. The international arbitration community may wonder whether MIAC will be as reliable as it was with LCIA support. However, another point of view is that MIAC can now at least stand on its own two feet as an entirely independent arbitral institution, not relying on outside support.

MIAC has work to do to demonstrate that it can be as independent and reliable as ever. It does appear at least to be getting off on the right foot.

Duncan Bagshaw is a barrister in Stephenson Harwood’s international arbitration team, and was the Registrar of the LCIA-MIAC Arbitration Centre from 2012 to 2015.