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Umpire

Independent arbitrator jointly appointed by the parties to resolve a dispute, notably on the attribution of a cyber operation to a state in the LMA 5567 Hamilton variant.

Definition

The umpire comes from Anglo-American arbitration, and first of all from reinsurance arbitration: each party names its arbitrator, and the two arbitrators together choose the umpire, the neutral third member who breaks the tie, as the ARIAS U.S. rules provide. The Hamilton variant of LMA 5567A simplifies the scheme, a single umpire to whom the parties refer directly, and introduces it specifically for disputes over the attribution of a cyber operation to a state. If the parties cannot resolve their disagreement on attribution within thirty days of the matter being raised, either party may refer the dispute to a competent and disinterested umpire with experience in international law. The decision is binding. The clause also tolls all limitation periods and defenses based on the passage of time until attribution is decided, so both parties keep their rights during the proceedings. The mechanism makes the claims process for contested cyber war events more predictable. It also adds a procedural step, which can take several months, between the loss and actual settlement.

Its 6 cross-references, woven across the glossary's 18 categories
Umpire: Law & regulation glossary illustration, AlgoPolis
Example

Textbook case: following a massive cyberattack attributed by some governments to China but not officially acknowledged by the government of the state where the affected systems are located, the insurer invokes the cyber war exclusion. The insured contests the attribution. Under the Hamilton variant, the parties have 30 days to reach agreement; failing that, an umpire specialized in international law is appointed. Their decision will be binding on both parties.

Read next
Law & regulationFinal adjudicationA clause conditioning the intentional-conduct exclusion on a final decision, preserving the advance of defense costs until every appeal is exhausted.Read the entry →CyberAttribution of a cyber operation to a stateWho decides that a cyber attack is state-backed, and how the attribution wording of the LMA cyber war clauses, A or B version, can decide the claim.Read the entry →CyberCyber operation (LMA cyber war definition)How the LMA cyber war clauses define a state cyber operation, the use of a computer system by or for a state, and why ordinary cybercrime falls outside it.Read the entry →
Sources
  • ARIAS U.S., Rules for the Resolution of U.S. Insurance and Reinsurance Disputes (tripartite panel: one arbitrator named by each party, the two arbitrators choosing the umpire); Kluwer Arbitration Blog, "Umpire Challenges under the New ARIAS-US Panel Rules", October 5, 2019
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