Members of the Baltic Exchange and London Maritime Arbitrators Association (LMAA) are available to mediate shipping and commodity related disputes.
Governed by the LMAA/Baltic Exchange Mediation Terms 2009, the service offers a flexible means of resolving disputes and is an alternative to arbitration and litigation.
Click here for a list of Baltic/LMAA mediators.
Companies wishing to include a provision for mediation procedures within their charterparties may use the following wording:
"Without prejudice to any other right or remedy under this Agreement, if any dispute, claim or difference arises under or in connection with this Agreement (a "Dispute"), then the Parties will attempt to settle the Dispute by mediation in accordance with the mediation procedure set out in the Baltic Exchange Mediation Procedure as published on the Baltic Exchange website."
What is Mediation?
Mediation is the intervention of a neutral third party as an intermediary between two or more parties in dispute with a view to helping them find an amicable solution to their differences. It is non-binding and can provide an alternative to litigation or arbitration. In its classic form, mediation requires the personal attendance of the parties before the mediator with the individuals attending being decision makers with authority to settle. The mediator will normally hold an opening session at which the parties are present and in turn set out their case and explain why they consider that they are right. After the first joint session, the mediator then meets each party in turn in caucus to discuss various aspects of their case with them and try to encourage them to
- (i) see for themselves the relative strengths and weaknesses of their case,
- (ii) make known any matters which, although not directly relevant to the merits of the case, may have a bearing on the parties' willingness to settle and
- (iii) assess the alternatives to not achieving a negotiated settlement. These caucuses are confidential and the mediator will only disclose documents or information to the other party if authorised to do so. By means of this "shuttle diplomacy" the intention is for the parties to gradually move together until they reach a point at which a settlement is in sight. If he considers that there is no prospect of settlement the mediator will draw the mediation to a conclusion.
Where, however, the parties reach, or are in sight of an agreement, he may call them back for a further joint session to see whether a final agreement can be reached. If it is achieved, this will be recorded in writing and signed by the parties, binding them both. If, however, no agreement can be achieved, the session is brought to a conclusion. As the entire mediation is conducted without prejudice, nothing that is said or done by the parties during the course of the mediation may be referred to in any later legal proceedings. Mediation has the advantage of being able to bring about a resolution by involving issues which may strictly bear no relation to the dispute. Quite often, disputes in mediation are resolved by a negotiated compromise which could not be achieved in arbitration or litigation or, for example, by an agreement to do future business at a discounted rate.
The process allows for creativity in resolving disputes. Another great advantage is the ability to include several different parties in the process in order to achieve a global resolution of a problem. Mediation hearings are not limited to taking place in London and may be arranged wherever convenient to the parties, while an innovative element of the LMAA/Baltic Exchange mediation service is adoption of “virtual” phone, fax and e-mail mediation where the sums involved may not justify the time and expense of an attended hearing.
The Baltic Exchange’s meeting rooms have been designed to facilitate mediation sessions, with three joint rooms available with separate entrance points. However, mediation may also be conducted by video conferencing or correspondence.
For further details, contact Crispin Eccleston.
Tel: +44 20 7369 1654