The Arbitration Clause Said LCIA. The Other Party Filed at ICC.
Quote from chief_editor on June 6, 2026, 3:00 amWhen a counterparty files arbitration at a different institution than specified in the contract, the first step is jurisdictional challenge. The clock is already running.
The contract said LCIA arbitration, London, English law. When the commercial dispute arose and the buyer decided to pursue a claim, they filed a request for arbitration at the ICC — International Chamber of Commerce, Paris. Their counsel's reasoning: the LCIA and ICC are both reputable international arbitration institutions, the difference is procedural, and ICC proceedings could be commenced immediately because they had local counsel familiar with ICC rules.
The seller received the ICC arbitration notice and faced an immediate decision: respond on the merits and implicitly accept ICC jurisdiction, or challenge jurisdiction immediately and insist on LCIA as specified in the contract.
The jurisdictional challenge was filed. ICC proceedings were suspended pending determination of jurisdiction. A separate LCIA arbitration was commenced by the seller. The dispute now involved: a pending ICC jurisdiction challenge, a nascent LCIA proceeding, and legal costs in two institutions. None of the substantive dispute had been addressed. Eight months had elapsed. Legal costs on both sides: estimated at over $200,000 combined.
The Arbitration Clause Is a Jurisdictional Agreement, Not a Procedural Detail
Arbitration clauses in commercial contracts specify the dispute resolution forum. When both parties have signed a contract containing an LCIA clause, they have agreed that LCIA is the forum for their disputes. Filing at a different institution is not a neutral procedural choice — it is an attempt to commence proceedings in a forum the respondent has not agreed to.
The practical consequences of wrong-forum filing are: immediate procedural complexity, additional cost for the jurisdictional challenge, potential parallel proceedings, and delay before the substance of the dispute is addressed. The party that files at the wrong forum may have tactical reasons — their local counsel knows the ICC better, ICC proceedings may be faster for certain claim types, or the wrong-forum filing is an attempt to gain a procedural advantage by choosing a forum the other party must expend resources to challenge.
The party that receives a wrong-forum filing must challenge jurisdiction promptly. Participating in the wrong-forum proceedings without challenging jurisdiction can be construed as acceptance of that forum, potentially waiving the contractual arbitration clause. The response to a wrong-forum notice is not to ignore it — it is to file a jurisdictional objection immediately, within whatever deadline the wrong-forum institution sets, while simultaneously preparing to commence proceedings in the correct forum.
Industry estimates for the time and cost of jurisdictional challenges in international commercial arbitration suggest that these proceedings add 6 to 18 months and substantial legal cost to commercial disputes — costs that could have been avoided if the party filing had respected the contractual forum. Whether the wrong-forum filing was an inadvertent error by counsel unfamiliar with the contract or a deliberate tactical choice is not always determinable from the outside, but the cost to the respondent is the same either way.
Drafting Arbitration Clauses That Are Unambiguous
The most common sources of arbitration clause disputes are: vague clause language that names an institution without specifying the institutional rules, contracts with inconsistent clauses (the main body says LCIA, an addendum says ICC), and clauses that do not specify a seat of arbitration — leaving the applicable procedural law uncertain.
A well-drafted commodity contract arbitration clause specifies: the arbitration institution by full name, the institutional rules to apply (e.g., LCIA Rules 2020), the seat of arbitration, the language of the proceedings, the number of arbitrators, and the governing law of the contract. These are not ceremonial details — they are the complete description of the dispute resolution machinery that will govern a $5 million claim if the commercial relationship fails.
Contracts that are negotiated quickly, with the arbitration clause added from a standard template without review, frequently contain clauses that are technically valid but operationally problematic — naming an institution in a jurisdiction that limits the pool of available arbitrators, specifying a seat that conflicts with the enforcement jurisdiction of interest, or using outdated rules references. The clause that looks fine at signing becomes the first procedural dispute when the commercial relationship ends.
When a counterparty files arbitration at a different institution than specified in the contract, the first step is jurisdictional challenge. The clock is already running.
The contract said LCIA arbitration, London, English law. When the commercial dispute arose and the buyer decided to pursue a claim, they filed a request for arbitration at the ICC — International Chamber of Commerce, Paris. Their counsel's reasoning: the LCIA and ICC are both reputable international arbitration institutions, the difference is procedural, and ICC proceedings could be commenced immediately because they had local counsel familiar with ICC rules.
The seller received the ICC arbitration notice and faced an immediate decision: respond on the merits and implicitly accept ICC jurisdiction, or challenge jurisdiction immediately and insist on LCIA as specified in the contract.
The jurisdictional challenge was filed. ICC proceedings were suspended pending determination of jurisdiction. A separate LCIA arbitration was commenced by the seller. The dispute now involved: a pending ICC jurisdiction challenge, a nascent LCIA proceeding, and legal costs in two institutions. None of the substantive dispute had been addressed. Eight months had elapsed. Legal costs on both sides: estimated at over $200,000 combined.
The Arbitration Clause Is a Jurisdictional Agreement, Not a Procedural Detail
Arbitration clauses in commercial contracts specify the dispute resolution forum. When both parties have signed a contract containing an LCIA clause, they have agreed that LCIA is the forum for their disputes. Filing at a different institution is not a neutral procedural choice — it is an attempt to commence proceedings in a forum the respondent has not agreed to.
The practical consequences of wrong-forum filing are: immediate procedural complexity, additional cost for the jurisdictional challenge, potential parallel proceedings, and delay before the substance of the dispute is addressed. The party that files at the wrong forum may have tactical reasons — their local counsel knows the ICC better, ICC proceedings may be faster for certain claim types, or the wrong-forum filing is an attempt to gain a procedural advantage by choosing a forum the other party must expend resources to challenge.
The party that receives a wrong-forum filing must challenge jurisdiction promptly. Participating in the wrong-forum proceedings without challenging jurisdiction can be construed as acceptance of that forum, potentially waiving the contractual arbitration clause. The response to a wrong-forum notice is not to ignore it — it is to file a jurisdictional objection immediately, within whatever deadline the wrong-forum institution sets, while simultaneously preparing to commence proceedings in the correct forum.
Industry estimates for the time and cost of jurisdictional challenges in international commercial arbitration suggest that these proceedings add 6 to 18 months and substantial legal cost to commercial disputes — costs that could have been avoided if the party filing had respected the contractual forum. Whether the wrong-forum filing was an inadvertent error by counsel unfamiliar with the contract or a deliberate tactical choice is not always determinable from the outside, but the cost to the respondent is the same either way.
Drafting Arbitration Clauses That Are Unambiguous
The most common sources of arbitration clause disputes are: vague clause language that names an institution without specifying the institutional rules, contracts with inconsistent clauses (the main body says LCIA, an addendum says ICC), and clauses that do not specify a seat of arbitration — leaving the applicable procedural law uncertain.
A well-drafted commodity contract arbitration clause specifies: the arbitration institution by full name, the institutional rules to apply (e.g., LCIA Rules 2020), the seat of arbitration, the language of the proceedings, the number of arbitrators, and the governing law of the contract. These are not ceremonial details — they are the complete description of the dispute resolution machinery that will govern a $5 million claim if the commercial relationship fails.
Contracts that are negotiated quickly, with the arbitration clause added from a standard template without review, frequently contain clauses that are technically valid but operationally problematic — naming an institution in a jurisdiction that limits the pool of available arbitrators, specifying a seat that conflicts with the enforcement jurisdiction of interest, or using outdated rules references. The clause that looks fine at signing becomes the first procedural dispute when the commercial relationship ends.