The Baltic hosts a modern arbitration center that can accommodate groups of up to 25 with room for 15 observers. Click here for further details.
BIMCO and the LMAA have produced a printed comprehensive arbitration clause, which is recommended by the Baltic for inclusion in charterparties.
“The LMAA Intermediate Claims Procedure”
was introduced in 2009 for the expedited and less costly resolution of medium size claims.
All the following information can be found on the LMAA website
- The LMAA Terms (2006)
- The LMAA Small Claims Procedure (2006)
- The LMAA Mediation Terms (2002)
- The LMAA Intermediate Claims Procedure Terms (2009)
What is Arbitration?
It is common for charterparties to specify that in the event of a dispute the matter will be referred to arbitration. Such a clause does not prevent attempts to resolve the dispute by negotiation or mediation. Indeed, even after the arbitration clause has been invoked negotiation towards a settlement is customary.
The form of the arbitration clause in the charterparty is subject to the agreement of the parties and printed clauses are frequently amended to comply with their wishes, particularly as to the composition of the tribunal and the forum. However, a charter party clause is not essential to invoke arbitration; written evidence that the parties have agreed to submit disputes to arbitration is all that is required. It is open to either party to invoke the arbitration procedure.
In addition to the comments on choice of law made earlier, in the case of arbitration it is useful to make use of a standard arbitration clause which can clarify many issues, including the location of the arbitration and the process for appointing the tribunal. It is also in the contracting parties’ interests that the procedure for the conduct of the arbitration be set out in the relevant arbitration clause.
In appointing an arbitrator, a party is choosing a judge who, either in his capacity of sole arbitrator or together with his co-arbitrator(s), will decide the matter fairly and impartially without unnecessary delay or expense to the best of his or their ability either on the basis of written evidence and submissions made by each of the parties or pursuant to an oral attended hearing. Depending upon the form of the arbitration clause, if the arbitrators appointed by each side cannot agree then either an umpire or a third arbitrator can be appointed.
If a formal hearing is required, submissions may be made by the parties themselves or through representatives, for example, solicitors and perhaps counsel.
The tribunal’s award is final unless challenged on the grounds of serious irregularity affecting the tribunal, the proceedings or the award.
The tribunal’s award is also final as to the facts of the case, as well as to law unless appealed to the Courts under the very restrictive conditions of the Arbitration Act 1996. Such leave to appeal shall only be given if the court is inter-alia satisfied that on the basis of findings of fact in the tribunal’s award, the decision of the tribunal is obviously wrong in law OR that the question that has arisen is one of general public importance AND the decision of the tribunal is at least open to serious doubt.
If a charterparty does not contain an arbitration clause then it is open to the parties subsequently (ad hoc) to agree a suitable wording should a dispute arise (e.g. the BIMCO/LMAA Arbitration Clause). The parties may also agree to vary the wording of an existing clause, for example, to appoint a sole arbitrator in place of three arbitrators or to appoint a third arbitrator instead of an umpire.
“The LMAA Terms”, last revised in 2006, provide, in a clear and convenient form, guidelines aimed at making for greater efficiency and despatch in the conduct of London arbitration. The LMAA also publishes a “Small Claims Procedure and Commentary”, last revised in 2006, which was introduced to provide a simplified, quick and inexpensive procedure for the resolution of small claims.