Arbitration – Commencement and Limitation

Initiating an arbitration is a critical step, not only signalling a genuine dispute between the parties but also ensuring adherence to applicable time limits for submitting claims.

Commencing Arbitration

Arbitration must be initiated according to the arbitration agreement set out in the contract and applicable law. Where institutional rules differ from the governing law, the law generally takes precedence unless it can be waived. In most jurisdictions, however, parties are free to agree on their own rules for starting arbitration, and the claimant need only follow these agreed-upon institutional rules or those outlined in the arbitration clause.

For example, the ICC Rules require the submission of a “Request for Arbitration”, which includes a description of the dispute, the relief sought, and any proposals regarding the number and appointment of arbitrators. According to Article 4.2 of the ICC Rules, the date the request is received by the Secretariat marks the official commencement of arbitration.

Likewise, under LCIA Rules, arbitration begins when the Request, along with all necessary documents, is received electronically by the Registrar, provided the registration fee has been paid.

In ad hoc arbitration, where no specific institutional rules apply, the law of the arbitration venue dictates how to commence an action. The Model Law, an international legal framework that provides a set of provisions on international commercial arbitration, states that arbitration begins when the respondent receives a request for arbitration.

Time Limits or “Limitation”

Most countries’ laws impose deadlines for initiating legal actions, including arbitration, to ensure that disputes are resolved within a reasonable timeframe. This protects respondents from outdated claims, encourages claimants to act promptly, and promotes finality. These deadlines, known as prescriptive periods, can also be imposed by contracts, such as those governing energy or commodity relationships.

Failure to respect these time limits can result in the loss of the right to arbitration. Typically, the countdown begins when the cause of action arises. To pause the limitation period in arbitration, a formal step must be taken, as explained above, such as submitting a request for arbitration to the relevant institution, such as the ICC or LCIA, or to the opposing party in an ad hoc arbitration. It is essential for potential claimants to consider any procedural steps required by the arbitration agreement, such as mandatory negotiations before arbitration. For instance, if an agreement requires 30 days of negotiations before filing a claim, and the limitation period is six years, negotiations must begin by five years and eleven months to ensure timely submission.

Different legal systems may impose varying limitation periods for claims in, for instance, breach of contract, negligence, statute, trusts etc. Some treat these as procedural matters governed by the law of the arbitration venue, while others see them as substantive, governed by the law of the contract.

To avoid confusion, many countries have clarified that limitation periods should align with the law of the contract, but this is not a universal rule, leaving arbitral tribunals to assess the legal framework in each case. For contracts governed by the laws of England and Wales, the Limitation Act 1980 (by virtue of the section 13 of Arbitration Act 1996) sets out the relevant timescales. In summary, these are:

Type of claim	General limitation period
Contract	Simple contract	6 years
Statute	Sum recoverable by virtue of statute	6 years
Tort	Tort: general rule	6 years

Contact Us

Edwin Coe specialises in both domestic and international arbitration. For guidance on commencing an arbitration or limitation issues, please contact David Greene and Thomas Johnson of our commercial disputes team.