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Reaccredited by NAAC with ‘A’ Grade

Established under Section 3 of the UGC Act wide Notification No. - F-12/2001-U 3 of
Government of India




Under the Guidance of


Symbiosis Law College, Pune

Submitted by


Roll No. 09







This is to certify that Dissertation entitled “Critical study of Maritime Arbitration

and its effectiveness.”has been prepared byMr. Rushi P. Upadhyay(Roll No. 09)
student of LL.M (Batch 2017-2018), Symbiosis Law School, Pune under the guidance
and supervision of Prof. SanjeetRuhal. This dissertation is of the standard as
expected from a candidate of LL.M Degree.

Date:12th July, 2017 Prof. Sanjeet Ruhal


Place: Pune Symbiosis Law School, Pune


I undersigned hereby declare that the dissertation “Critical study of Maritime

Arbitration and its effectiveness.” which is submitted for the award of the LL.M
Degree is my original work and has not been submitted by me to any other university
for any degree or diploma.

Date: 12thJuly, 2018 Mr. Rushi P. Upadhyay

Place: Pune Roll No. - 09


Words are less to bridge the gap between experience and expression. It would be my
privilege to thank Dr. Shashikala Gurpur, Director, Symbiosis Law School Pune,
Dean, Faculty of Law, and SIU Pune who gave me an opportunity to be a part of this
prestigious institution.

I shall forever be highly grateful to my Guide Prof Sanjeet Ruhal Sir, who led me to
explore new dimensions of the subject, broadened my vision and made me realize the
important of research. I shall always be indebted for giving me his valuable time for
making this research worth what it is and throwing light upon the path ahead.

I would also like to express my gratitude towards the faculty members, Computer
Staff, Library Staff and non- teaching staff for helping and making accessible all the
resources for the completion of this work.

My acknowledgement would be incomplete without thanking the biggest source of

my strength, my Family. It would have not been possible for me to complete this
dissertation if they had not unconditionally extended their love and valuable support.
Last but not the least I would like to thank my friends Mr. Jitendra Vyas, Ms. Pooja
Artwani and Ms. Kritika Kakkar who have been really supportive and had given
me endless motivation throughout.


1. American Almond Prod. Co. v. Consolidated Pecan S. Co. 144 F. 2d (2d Cir


2. Compania Naviera SODNAC Greece v. Bharat Refineries Ltd (2008) O.P. No.

388 of 2005

3. FuerstDay Lawson Ltd v. Jindal Exports Ltd. A.I.R. 2001 SC 2293

4. Naval Gent Maritime Limited v. Shivnath Raiharnarain 174 DLT 391 (2009)

5. Shakti Bhog Foods Ltd v. Kola Shipping Ltd. Civil Appeal No. 5796 of 2008

6. Southern Petrochemicals v. The Eastern Shipping Company, O.M.P. 482 of 2010

7. Watersweet Ltd v. The Fertilisers & Chemicals, O.M.P. No. 344 of 2005


 A.I.R. All India Reporter

 ADR Alternative Dispute Resolution

 Anr. Another

 ASBA Association of Ship Brokers &Agents

 BIMCO Baltic & International Maritime Council

 Bus’ Business

 CAMP Chambre Arbitrale Maritime de Paris

 Cir Circuit

 CMAC China Maritime Arbitration Commission

 Co. Company

 Com. Commercial

 DLT Delhi Law Times

 e.g. Example

 Ed. Edition

 GASVOY Gas Voyage Charter Party Model Contract

 I.C.A. Indian Council of Arbitration

 i.e. that is

 ICA International Court of Arbitrators

 ICMA International Congress of Maritime Arbitrators

 Inc. Incorporated

 Int’L International Law

 JSE Japan Shipping Exchange

 LMAA London Maritime Arbitration Association

 LOF Lloyd’s Open Form

 Ltd. Limited

 Mar. L Maritime Law

 NYPE New York Produce Exchange

 O.P. Original Petition

 P&I Protection & Indemnity

 Rev. Review

 S.C.C Supreme Court Cases

 SCMA Singapore Chamber of Maritime Arbitration

 SMA Society of Maritime Arbitrators

 TOMAC Tokyo Maritime Arbitration Commission

 Tul. Tulane

 UK United Kingdom

 UNCITRAL United Nation Commission on International Trade Law

 UNCOGSA United Nations Convention on the Carriage of Goods by Sea

 USA United States of America

 V. Versus

 Vol. Volume










































































“The sea lies all about us. The commerce of all lands must cross it. The very winds that move
over the lands have been cradled on its broad expanse and seek ever to return to it. The
continents themselves dissolve and pass to the sea, in grain after grain of eroded land. So the
rains that rose from it return again in rivers. In its mysterious past it encompasses all the dim
origins of life and receives in the end, after, it may be many transmutations, the dead husks of
that same life. For all at last returns to the sea-to Oceanus, the ocean river, like the ever-
flowing stream of time, the beginning and the end.1”

Since the beginning of humanity, the sea has been a source of nutrition by providing food and
opportunity of trade. The earliest civilization used the sea as a path to search for wealth in the
form of spices, minerals and other natural resources. This search for natural resources and
wealth give rise to the establishment of the maritime sector that continued to be in some form
or any other form till present. The long history of maritime industry is dotted with both
success and disputes.2

For several decades, in the maritime industry, arbitration has served as a common tool for
settlement of disputes3. In the past, a large number of informal personal contacts, limited
number of people and the concentration of the shipping industry in New York led to an
atmosphere favorable to the friendly resolution of disputes. But in the present era, the
shipping industry is no longer made up of small number of people nor concentrated in only
one state. This changed the whole scenario of the arbitration that was present in the past.4

Despite various changes, maritime arbitration remains to be a popular way to resolve

maritime disputes. It is because of the often lower costs involved as well as the ability to
shape the process as per the needs of the parties involved in the process.5 Maritime
Arbitration is most often the result of an arbitration clause in a contract. The clause contains

Rachel Lousie Carson, THE SEA AROUND US,212 (Oxford Univ. Press. 1989).
NoussiaKyriaki, The History, Importance and Modern use of Arbitration, SPRINGER-VERLOG BERLIN
HEIDELBERG 2010(May 30, 2018),available at - c1: pdf?.
Patric Martin, Why is Arbitration Getting Much Too Legalistic? Can the Old Method be revived?,8th
International Maritime Arbitration. (1987).
Georgis I. Zekos, Constitutionality of Commercial ̸ Maritime Arbitration, 45 J. Mar. L. & Com. 35. 35-38
Michael Marks Cohen, A New Yorker Looks at London Maritime Arbitration, 1986 Lloyd’s Mar. & Com. L.Q.
57 (2014).

various information apart from the arbitration which includes the procedures to be followed
in arbitration, the composition of the arbitral tribunal and the remedies available6.

Nowadays, international maritime arbitration appears to be an extremely healthy condition. It

is because of the increasing number of Arbitration institutions devoted to it, and the big
amount and complexity of disputes referred to arbitrators.


According to the Halsbury’s Laws of England, “Arbitration is a recognized private legal

procedure used to resolve disputes between two or more parties.7”

Alternative Dispute Resolution (ADR) has emerged in the twilight of the 19th century. Since
then it has assumed much importance in different spheres of life from all over the world. Not
only has this, but after its establishment various other new process of solving disputes been
developed such as Negotiation, Mediation/Conciliation, Expert Determination, Mini Trial,
Adjudication, Arbitration and various other mechanisms.

The general flow in the modern world is the exploration of effective dispute resolution
techniques which is result oriented as well as less rigid in nature. Arbitration is one of its fine
examples. Arbitration has received a positive nod in various international conventions. To
mention some of these conventions, for example, in relation to the carriage of goods by sea,
the Hamburg Rules 1978 provides that the parties to a contract on carriage of goods by sea
can provide for an arbitration clause in the contract which allows the party in case of dispute
arising out of any differences which could be contractual or not, to refer to arbitration.8 Also
in most of the cases, the Bill of Lading or Charter-party always contains the clause of
Arbitration. Similarly, all contracts which involve carriage of goods by sea can be referred to
arbitration in case of dispute. This dispute includes loss of cargo, charter-party disputes, ship
finance, marine insurance, salvage disputes, etc.

Arbitration is a creation of agreement. An agreement to arbitrate is therefore an agreement

between the parties to substitute a tribunal as a result to determine their rights. The object of

William Tetley, Good Faith in contract, particularly in the contracts of arbitration and chartering, 35Journal
of Maritime and Commerce, 561, 561-562(2004).
Halsbury’s Laws of England (2) 502 (Butterworths, London, (4th ed. 1991).
United Nations Convention on the Carriage of Goods by Sea (UNCOGSA), Article 22, popularly known as
“Hamburg Rules” of 1978. Art. 22(1) providesthat Parties may provide by agreement evidenced in writing that
any dispute that may arise relating to carriage of goods under this Convention shall be referred to arbitration.

arbitration is to obtain fair resolution of disputes by an impartial tribunal without unnecessary
delay or expense. The parties are free to agree on how to resolve their disputes without the
intervention of the courts.

As discussed above, maritime sector is one of the most emerging sectors that have completed
its journey with lots of developments as well as changes. The modern times have evolved
with various changes in resolving the maritime disputes. Since a long time, Maritime
Arbitration has proven to be a great alternative to the litigation process for solving the


It is one of the most effective method in which consensual system of judicature is directed to
the resolution of commercial dispute in private. It also results to final and obligatory
willpower of the party’s rights as well as duties. The Arbitrator is the person who hears the
matter and to whose judgment and decision matters in dispute are referred.

It is one of the most used methods to resolve the dispute and is a base of almost every
arbitration agreement. It includes the following dispute:

 Counterparty issues
 Cargo interest
 Accidents
 Bill of lading
 Insurance claims
 Personal injury claims
 Salvage agreements
 Payment claims
 Quality and time issues

Due to the unbiased decision makers, parties are barred from misconduct. It also helps in
completing the liabilities. Sometimes, the interference by the judiciary may create some
problems such as slow disposal of the dispute, confusion regarding the procedures involved
and most importantly loss of valuable time and human resource.


The primary object behind arbitration is to resolve the shipping disputes. The arbitration
clause cannot be started unless there is an arbitration clause in the agreement. As a result, all
the common agreements which cover all the shipping activities have an arbitration clause in
it. There are some model contracts which can be mentioned as follows:

 The Standard Ship Management Agreement model contract (SHIPMAN 98)

 The Uniform General Charter (GENCON)
 The Lloyd’s Open form (LOF 2000)
 The Gas Voyage Charter Party model contract (GASVOY)
 The Uniform Charter Party (BALTIME)
 The Time Charter New York Produce Exchange Form (NYPE 93)


The concept of Arbitration in an agreement is an independent thing. The arbitration
agreement reflects the will of the parties to submit their present or future disputes to
arbitration. This being so, the arbitration agreement becomes at the same time the very basis
and the limit of the arbitration proceeding: the arbitration agreement clears the desire of the
parties to submit their disputes to arbitration, expelling the jurisdiction of public courts and,
besides that, it sets the limits for the arbitrators and the parties throughout the whole
arbitration proceeding9.

Almost all national and international arbitration rules assume the arbitration agreement
fulfilling certain crucial formal qualifications. In any case, the arbitration agreement is
required to be reflected in writing and, also, to be signed by the parties. These formal
requirements aim to both review the real will of the parties to submit their disputes to
arbitration and to endorse the existence of a valid and efficient arbitration clause.


The alternate to arbitration in maritime arbitration was the outcome of extreme costs as well
as its time-consuming nature required for the litigation process. After the practice of
recognized arbitral process for some decades, it has become important to review the pros and

FrancescoBerlingieri, International Maritime Arbitration,10 J. Mar. L. & Com 199, 199-201 (1978-1979).

cons of the procedure by finding solutions to the questions raised which was a result of mixed

1. Whether Maritime Arbitration proved to be an effective solution in solving

maritime disputes?
2. Whether a better Maritime Law will help in improving the effectiveness of
maritime arbitration?
3. Whether Institutional Maritime Arbitration would promote Maritime
Commerce in India?


This research will introduce areas of reforms in the international maritime arbitral landscape
as a result to improve access to justice. This improvisation can be achieved by fair and
friendly composition in the maritime arbitration. To the top of it, a model arbitration clause
should be proposed for maritime transactions which will allow the incorporations of other
result oriented dispute resolution processes that can be employed in arbitration. The research
seeks to achieve the following aims and objectives:

1. To assess the role of arbitration in maritime dispute with its importance related to
carriage of goods by sea.
2. To evaluate the efficiency of maritime arbitration particularly with the new trends in
the field of maritime arbitration
3. To propose a mechanism where maritime arbitration will be restored into a problem
solving, result oriented and solution giving process.


Maritime arbitration as an effective way to resolve maritime disputes, since its
professionalism, technicality and international characteristics, got a lot of international
attention. It has become a prevailing system with its vitality, particular features and
advantages, which lead it to be accepted by more and more practitioners in maritime and
international trade.


This research is undertaken by the researcher as a doctrinal research. This research is

conducted by the way of analyzing the legal provisions, case laws along with legal journals,

magazines and all relevant material on the topic and with the reasoning power of the
researcher the problems are identified and a final conclusion is drawn.

The method of doctrinal research has been adopted for this study, owing to the specific nature
of research problem undertaken. Various articles and research papers have been referred to
for the purpose to fulfil the purpose of the research.


The growing need to settle disputes in a friendlier manner without the usual workings and
legal blockages brought about the search for an independent means for solving the disputes.
The cases are dealt depending on the circumstances as well as the nature of the case. Initially,
commercial maritime dispute are those cases which involves the cargo disputes through the
general law i.e. lex mercatoria (law of merchants) in an arbitration form; later the litigation
became the dominant dispute solving process by the 18th century.

Felix Sparka, Jurisdiction and Arbitration clause in Maritime Transport Documents: a

Comparative analysis, published by Hamburg Studies on Maritime Affairs Volume 19

The author has discussed the concept of the arbitration. Jurisdiction and Arbitration
agreements are hardly compared. Similarly no comparative treaties have been authored. The
author has tried to focus on the concept. Jurisdiction and arbitration are closely connected to
maritime transport document. It is a global concept and also a part of every maritime
document. As a result, the development of clear system of jurisdiction and arbitration clause
in maritime transport documents is an essential element within the framework of the maritime
transportation. The outlines of this framework have an implication beyond the marine sector
and could change the agreement scenario. Similarly, jurisdiction and arbitration cannot be
viewed separately. Both have the same purpose as well as the same effect on the jurisdiction.
As there are various statutes as well treaties governing the concept, alteration are probable. In
the end, the author has given certain remarks as per the necessity of the literature.

Ahmed Dawood, “Arbitration in Maritime Disputes”, Journal of Shipping and Ocean

Engineering 6(2016)

This paper deals with prevailing maritime relations in the present era resort to arbitration to
resolve arising disputes where parties of these relations should agree on the solution to the
current or future conflicts arising from them to a specialist arbitrators of their choice known

for their competence and experience in the maritime field to adjudicate the provisions of the
arbitration binding. Maritime arbitration grew since the time of the Romans, and spread to the
Middle Ages as a simple, flexible and specialized system to resolve maritime disputes, but it
gained popularity in the present era as a result of booming international trade and commerce
between different countries where this trade found that shipping is the best way among
different means of transportation for its low costs and the large volume of cargo transported
by it. Marine disputes submitted for arbitration are many and varied, some of which comes
from the contract between the stakeholders and others arising from maritime accidents, and
examples of the first group is the shipbuilding, repair, sold, leased and insured contracts , the
transport of goods or people contracts, marine sales contracts as well as the diameter of
maritime contracts.

Buffy Lord, Dispute Resolution on the High Seas: Aspects of Maritime Arbitration, 8
Ocean & Coastal L.J. (2002)

The paper deals with the importance as well as the special roles of maritime arbitration in the
international world are examined through a case analysis dealing with the specific procedural
issues. Proper framing of the arbitration clause makes it possible to provide interim measures.
This clause reduces the level of intervention of court. This gives rise to the hypothesis
mentioned that it is necessary to considerably delocalize the maritime arbitration and save the
procedure from the domestic legislations that give power to the local courts to intervene with
the powers and proceedings of the arbitral tribunal. However the intervention is necessary in
some of the cases.

Ahmed Saad; Zisha Rizvi, Maritime Arbitration – Legal Perspectives, 4 Ct. Uncourt 8

In the present article, the author has talked about the recent developments in the business
world. A need arises for a legal mechanism through which parties can resolve their disputes
quickly, fairly, efficiently, with flexibility and freedom that the court cannot provide. The
reason for this is because of the continuous development of trade and services, the resulting
complexity of transactions, and the subsequent need for speed and efficiency. This entire
factor gave rise to the alternate dispute method resolution as it is very flexible and speedy.
Similarly, the author has talked about the Emirates Maritime Arbitration Center based in
Dubai to settle the local and international maritime disputes. The role of the Center also

includes supervision of mediation and arbitration per the applicable regulations to provide its
services with transparency and integrity. The main aim of this center is to provide the best
services to the maritime sector through a specialized center to resolve all maritime disputes
with the speed and efficiency required and to enhance Dubai's competitive position in this
important area at both regional and international level.

David Kwok, Maritime Arbitration and Cultural Differences, 17 Asian Bus. Law. 75

This article examines the clash of legal cultures in the context of maritime arbitration. Very
often, shipping disputes are international in character, that is, the disputing parties come from
different countries. As the parties come from varying legal and cultural backgrounds,
maritime arbitrations become a site of legal and cultural clashes. This may be manifested by
the different expectations of the parties, and the different degrees of familiarity with the
procedural aspects of the arbitral proceedings. This article contrasts the adversarial style of
arbitration, which is familiar to parties coming from common law jurisdictions, to the
mediatory style, to which parties of Asian backgrounds may be more accustomed. The main
contention of this article is that whilst maritime arbitration, and indeed international
commercial arbitration, may be a site of cultural clashes, it also provides much opportunity
for the problem to be recognized and remedied, compared to court proceedings. As
arbitration is inherently a flexible dispute resolution technique, an arbitrator should readily
use his/her power to design suitable sets of procedures for the arbitral proceedings, taking
into account cultural differences, so that procedural justice is given to all parties, rather than
making the arbitral proceedings rigid and inflexible and conducting the arbitral proceedings
in an overly legalistic manner.

Georgios I. Zekos, Constitutionality of Commercial/Maritime Arbitration, 45 J. Mar. L.

& Com. 35 (2014)
In the mentioned paper, the author has discussed about the concept of maritime arbitration.
Similarly, he has also mentioned about various powers, roles and duties of arbitrators. The
author has mentioned various writers and scholars to make his point. An independent
arbitration can be used to achieve justice in a deeper and more socially acceptable way than
formal law. While stating Levin, the author says that in recent years the private sector has
begun to use binding arbitration as the favorite method of dispute resolution and the payback
appears to be that arbitration is a "quicker, less expensive and more private alternative to

litigation. The article analyzes the constitutionality of arbitration, and allows us to argue that
the development of arbitration into a mechanism coequal to, but independent from, the courts'
dispute mechanism under a state administration, will strengthen justice in a country because it
allows parties to have two co-equal ways of dispute resolution, each with its own
characteristics leading to a much better justice. The author has also mentioned about the
National Authority Management Arbitration (NAMA) which will help in creating a fully
independent, alternative and co-equal system to the courts' dispute mechanism, and
consequently two parallel civil law dispute systems which will exist in keeping their own

Lawrence G. Cohen, Maritime Arbitration in Asia, 29 J. Mar. L. & Com. 117 (1998)
In this article, the author has mentioned about the scope of Maritime Arbitration in Asia.
Generally, most of the arbitral proceedings are conducted in either London or in New York
will likely continue to be held in these cities for the foreseeable future, maritime arbitration is
establishing a stronger foothold in Asia. The article has provided an overview of some of the
more important developments now taking place. There is a significant economic shift from
West to East taking place in the world today. As this tilt increases so will the ability of Asian
nations to dictate where and how disputes are resolved. At the same time, the important
advantages offered by arbitration relative to litigation are becoming increasingly clear to
Asian companies. As arbitration structures become more uniform, trained arbitrators become
more numerous and more experienced, and the more centralized political regimes recognize
that the encouragement of commercial arbitration can be a non-political avenue toward
achieving "first world" status, arbitration in Asia cannot help but grow and flourish.

Richard H. Sommer, Maritime Arbitration--Some of the Legal Aspects, 49 Tul. L. Rev.

1035 (1974-1975)
The present article touches the legal aspects of the maritime arbitration. The author mentions
that the disputes between parties have been settled by many means. In modern times,
disputants have resorted to arbitration procedures for the legal solution to problems. If a
dispute between two parties to a charter party cannot otherwise be resolved, either or both of
the parties may consult a practitioner to obtain relief via arbitration. This article discusses
some of the modern legal principles of arbitration and the trend of maritime arbitration law.
The author has discussed about legal history, background, and development of the law in this
area. It is apparent that the arbitration process in maritime matters, particularly arising out of

contracts of charter, has taken a firm hold, and today the number and monetary amount of
arbitration awards arising out of charter parties exceeds litigation arising from the same

Vidicic Vinko & Pivcevic Daniela, Quantification of variables of the Information Model
for Resolving Maritime Disputes through Arbitration, Procedia Engineering 69 (2014)
This paper explores and defines the advantages of resolving maritime disputes through
arbitration compared to their settlement in state courts, to emphasize the importance of
arbitration in resolving maritime disputes, to encourage the parties to settle maritime disputes
in this way, and to determine and quantify the values of the most relevant variables of the
information model for resolving maritime disputes by means of arbitration. It can be easily
proved that arbitration clearly presents a faster, more creative and cost-efficient way of
settling maritime disputes when compared to judicial proceedings. The advantages also
include practical and economical aspects, flexibility and confidentiality. Due to these
advantages, arbitration becomes the principal means of resolving disputes in maritime trade.
The article concludes with a note that it is more beneficial to the parties involved in maritime
issues to settle their disputes through arbitration than before state courts.

Arya B. Majumdar, Incorporation by reference in Maritime Arbitration

This paper discusses the formal requirements of a valid arbitration and therefore an
enforceable arbitral award arising out of the interplay between two well established and
celebrated contract forms found in the maritime industry- the bill of lading and the charter-
party. Charter-parties facilitate world trade, have a broad international scope and are
numerous making them remarkable contract. The premise upon which this paper is based is
that one cannot be required to arbitrate a dispute based on an arbitration agreement which the
disputing party has not sanctioned, or even seen. In this paper, two questions are primarily
raised. The first of which involves the formal obligations required in order to prove parties’
intention to arbitrate in case of an arbitration agreement incorporated from a charter-party
into a bill of lading. In the course of discussion of these two primary questions, this paper
describes the rise of maritime arbitration and its importance in the maritime industry. The
formal requirements for an arbitration to take place and the law relating to incorporation of
arbitration contracts are then discussed. The paper then applies the extant law on arbitration
and incorporation by reference to the bill of lading as a standard form of contract.





"The shipping and commodity trades of the world are unusual in that they do
not regard . . . arbitration with abhorrence. On the contrary, they regard it as
a normal incident of commercial life-a civilized way of resolving the many
differences of opinion which are bound to arise.”

-Lord Donaldson Lymington

Maritime Arbitration has developed on both domestic as well as international level. The law
of Sea provides one of the finest means for peaceful settlement of disputes provided by
international laws as well as international conventions. It is said that maritime arbitration has
ancient origins. Similarly, the roots of maritime arbitration can be seen in the lex
mercatoria.10Similarly some of the testimonials can be found in the Code of the Republic of
Venice dating back to 1229. Despite the multi-secular existence of such an institution and its
wide distribution in the maritime sector, there has been limited scholarly review and
investigation of maritime arbitration.

The general observation is that arbitration becomes maritime arbitration if there is an

involvement of a ship. In reality, the concept of maritime arbitration totally depends upon the
ship-rectus i.e. the connection and relation between the case and the ship. It serves as the
important element in maritime arbitration. Typically,the issues in maritime arbitration revolve
around following issues:

1. the investigation of damage to transported goods and ensuing liability attached to the
maritime carrier,
2. damages to the ship caused by the nature of the carried goods,
3. issues of lay days and demurrage including damages resulting from late entry to port
or late access to the operative quay
4. damages suffered by the carrier as a result of force majeure
5. issues relating to non-execution of charter parties (for example, non-payment of the
charter fee)
6. late return of the vessel or early collection of the ship

William Tetley, The General Maritime Law-The LexMaritima20 Syrcuse J. Int’L& Com. 105, 107 (1994).

7. sale, construction and ship repairs
8. matters relating to salvage at sea
9. maritime insurance

Maritime Arbitration belongs to a specialized category which falls under the international
commercial arbitration. The origin of a concept plays an important part in studying that
concept. Hence along with the study of origin, the researcher has also focused on the various
related concepts.


It is a complete system of law which consists of both public as well as private law. Also, it is
substantive, procedural, national and international which has its own courts and jurisdiction.
Maritime law was subsequently mostly influenced by the English Admiralty Court and then
later by common law. Maritime law is a complete legal system that can be seen from its
component parts. For centuries maritime law has its own law of contract:
 contract of sale (of ships)
 contract of service (towage)
 contract of lease (chartering)
 contract of carriage (of goods by sea)
 contract of insurance (marine insurance beingthe precursor of insurance ashore)
 contract of agency (ship chandlers)
 contract of pledge (bottomry and respondentia)
 contract of hire (of masters and seamen)
 contract of compensation for sickness and personal injury (maintenance and cure)
 contract of distribution (general average)


It is a distinct body of law that governs maritime questions and offenses. It is a body of both
domestic law governing maritime activities, and private international law governing the
relationships between private entities that operate vessels on the oceans. It deals with matters
including marine commerce, marine navigation, marine salvaging, shipping, sailors, and the
transportation of passengers and goods by sea. Admiralty law also covers many commercial
activities, although land based or occurring wholly on land, that are maritime in character.

Admiralty law is distinguished from the Law of the Sea, which is a body of public
international law dealing with navigational rights, mineral rights, jurisdiction over coastal
waters and international law governing relationships between nations.

Maritime law consists of a body of laws, conventions and treaties that governs international
private business or other matters involving ships, shipping or crimes occurring on open water.
Laws between nations governing such things as national versus international waters are
considered public international law and are known as the Law of the Seas.

In most developed nations, maritime law is governed by a separate code and is a separate
jurisdiction from national laws. The United Nations, through the International Maritime
Organization, has issued numerous conventions that can be enforced by the navies and coast
guards that have signed the treaty outlining these rules. Maritime law governs many of the
insurance claims relating to ships and cargo, civil matters between ship owners, seamen and
passengers, and piracy.
Maritime arbitration has been a practiced technique for solving dispute since ancient times,
especially in Ancient Greek. During the era of Middle Age, the application of lex maritima
was in a wide use of arbitration. This provision has been demonstrated in the statutes of some
Italian communes. The concept of arbitration has remained quite popular due to the rise of
international uniform law.

As mentioned earlier, the concept of maritime arbitration belongs to a genus (specialized

category) of the international commercial arbitration. But it differs from the general model
which makes it different due to the kind of arbitrated disputes as well as because of the
characteristics of the maritime arbitral proceedings. Nowadays the method of arbitration is
widely used in many international shipping to solve almost every kind of dispute. As a result,
arbitral clauses are included in many maritime contracts. This is because it’s remarkable
advantages which include flexibility, specialization, confidentiality and more generally, the
will of the parties to decide every single aspect of arbitral proceeding as per their needs.

Though, the concept of maritime arbitration possess many advantages, it is also been haunted
by various disadvantages as well as issues which resulted in the increase of popularity of
other mechanisms of dispute resolutions which includes negotiation and mediation. In order
to make or to maintain its leading role for the upcoming era, Maritime Arbitration will
necessarily have to make changes in order to makes its position in the Maritime industry.

Arbitration as a mode for settlement of disputes between the parties has a tradition in
India.The decisions rendered by Panchayats, which are recognized since time immemorial in
India, represent a basic form of arbitration11. With the advent of British Rule commenced the
era of codified legislation, rules and regulations and arbitrations also made its way in the
statute books. The comprehensive law on the subject was enacted in India in the year 1899
i.e. the Indian Arbitration Act 1899. The Code of Civil Procedure, 1908 also contained
various provisions relating to arbitration under section 89 and section 104. In 1940 the
Government of India passed the Arbitration Act, 1940, the ancestor to the modern legislation
However with the passage of time, it was revealed that the Arbitration Act, 1940 was loaded
with insufficiency and defects. There were many criticisms on the Act from none other than
the Apex Court. The functioning of the Act of 1940 in fact broke the conception of arbitration
in India and the government decided to refer the matter to the Law of Commission of India,
pursuant to which the Law Commission recommended far-reaching amendments in the
Arbitration Act of 1940.12
During this period of UNCITRAL after exhaustive research and due deliberations adopted the
model of Arbitration13. The necessity to amend the Arbitration Act 1940 had become evident.
The General Assembly of United Nations had also recommended that all countries should
give due regards to the UNCITRAL Model Law on Arbitration as a result to bring out
uniformity as well as consistency in arbitration law all over the world to develop the wide
scope of arbitration. Accordingly, the government decided that enactment of a new
comprehensive legislation in sync with the international standards. Rather than amending the
existing Arbitration Act 1940, a new law was enacted which was called as Arbitration and
Conciliation Act of 1996 which was based on the guidelines of UNCITRAL Model Law.14
While the UNCITRAL Model Law on Arbitration primarily applied only to the international
commercial of arbitrations, the new Arbitration and Conciliation Act of 1996 aimed to
combine and amend Indian laws relating to domestic arbitration, international commercial
arbitration and enforcement of foreign arbitral awards.15

H.K. Saharay&Salil K. Chaudhary, LAW OF ARBITRATION AND CONCILIATION, 3 (3rd ed. 2001).
Law Commission of India 76th Report, The Arbitration Act 1940 - Eighth Law Commission headed by Justice
H.R. Khanna.(1978).
The UNCITRAL Model Law on International Commercial Arbitration (1985).
Preamble to the Arbitration and Conciliation Act, 1996.
Fuerst Day Lawson Ltd v. Jindal Exports Ltd. AIR 2001 SC 2293 (India). The Arbitration and Conciliation
Act, 1996 repealed the Arbitration Act, 1940 and allied legislations i.e. the Arbitration Act, 1937 and the
Foreign Awards Act 1961.

The foundations of maritime law may be traced to primary sources- the lex maritime on one
hand and national statutes and international conventions on the other. The lex maritime
developed as part of the lex mercatoria and evolved primarily from the Roles of Oleron of the
12th century16. There are traces of its existence, however, as far back as the Rhodian law of
the 8th or 9th century B.C. Attachment, maritime liens and general average are examples of
the lex maritima, which continue to exist even today as jus commune.
Second, the common forms, terms, and practices of the shipping industry, particularly with
respect to carriage of goods by sea under bills of lading and the hire of ships and their
services under charter-parties, are international examples of accepted general maritime law.17


The jus commune is a law common to a whole jurisdiction or more than one jurisdiction. It is
composed of broad, general principles and is usually unwritten at first and then often
codified. The lex mercatoria is also a jus commune, just as is the lex maritima, which latter is
known as the “general maritime law” today.
It has been argued that the lex mercatoria developed over centuries of trade, particularly in
countries around the Mediterranean Sea and have come to represent our current-day
principles of law18. Now, the scope of the lex mercatoria encompasses a number of areas of
law that have been separated and compartmentalized through codification. Two such areas
are arbitration and the general maritime law19. Therefore, it is submitted, that the basic
principles of the two areas of law would essentially be similar, if not the same. Principles of
natural justice, fair-play and equity are common in both the cases.

Thus, the origins of maritime law and arbitration, which can be traced back to pre-Christian
times, have the same bases. However, over centuries of practice, new theories and global
circumstances have emerged, the most recent being the phenomenon of globalization.
Therefore, there arises a need for such regimes that have lasted this long, to be able to adapt
themselves to the constantly changing commercial scenario. In present times, arbitration in

WIilliam Tetley, THE GENERAL MARITIMA LAW - THE LEX MARITIMA, 20 Int’l &Comm 105, 107
Ibid 16
UNCODIFIED), 60 La.L.Rev, 677, 716-718 (2000)
Leon Trakman, The Law Merchant: The Evolution of Commercial Law, 71 F.B. Rothman & Co., Littleton,
Colorado, (1983).

the maritime industry is effected by arbitration clauses within the contract, not unlike other


Different from other industries, practitioners in shipping field tend to chose arbitration as the
preferred means of resolving disputes in an effective, economic and commercially sensitive
manner rather than resorting to Court proceedings.20 This is normally reflected as most
charter parties contain a arbitration clause whereby the parties agree to resolve by arbitration
disputes that arise under the charter party.21
The present situation of the popularity of arbitration in maritime is quite relative with its
history in Europe. In the maritime industry, it has been a long history for the practice of
resolving disputes by arbitration.
From the history of arbitration, there are records of arbitration’s use in Ancient Egypt and
latterly in the Greek City States and the Roman Empire22. Recorded history suggests that
mainly merchants and traders used arbitration.23 Some bibliographies show arbitration as a
means of dispute resolution, originated in ancient Rome, formed and developed in the United
Kingdom, Sweden and other European countries, and then be spread to other countries in the
world. If considering the two different principles of legal history research, these two
historiography conclusions for arbitration are compatible with each other. It can be concluded
that arbitration emerged in Ancient Egypt, and ancient Rome is another important period for
the spread of arbitration to Europe Countries.
From the history of maritime, some specific maritime regulations have found in Ancient
Egyptian Code and the code of Hammurabi. These two ancient codes are acknowledged as
the oldest statute law. Therefore, maritime law has a very long history. According to some
documents, the oldest systematic maritime code may be Lex Rhodia, also known as Rhodian
Sea Law24.Rhodian Sea Law is developed in Rhodes between 1,000 BC and 600 BC. Even no
copy of Rhodian Sea Law is found; some meager provisions still can be found through Julius

Jane Andrewartha, English Law Maritime Arbitration Law Update, 41 J. Mar. L. & Com. 345, 347-57-67,
2 Robert Force, ADMIRALTY AND MARITIME LAW, 51 (7 th rev. ed. 2004).
M. Mantica, Arbitration in Ancient Egypt, 158.((1957).
Bruce Harris, Maritime Arbitration in the U.S and the U.K, Past, Present and Future: The View from London,
(June 26, 2018), available at
Robert D. Benedict, The Historical Position of the Rhodian Law,18 The Yale Law Journal, 223, 223-

Paulusand the Digests of Justinian25. Such as the provision of cargo jettisoning by

“If merchandise is thrown overboard for the purpose of lightening a ship, the loss is made
good by the assessment of all which is made for the benefit of all.”

This provision shows that the emergency cargo jettisoning is just like general average in
contemporary maritime law. After the collapse of Ancient Rome, Europe entered into a
period of chaos, and this situation forced Mediterranean and west coast of France to be self-
sufficient. This period caused a great advantage of international trade especially in maritime
commerce, and such phenomenon not only saved international trade after Roman Empire, but
also made a significant development to maritime law. Three noted codes of maritime law
were formulated during this special time, from A.D. 1000 and A.D. 1500. The first is the
Laws of Oleron, which prevailed in France and England26. The content ranges over general
average, ship collision, marine salvage and Crews’ rights and duties. It acted as a bridge for
maritime law being spread to Scandinavian and the Baltics, as the basis of the Laws of
Wisby. The second is Consolatodel Mare, which was adopted by the cities on the
Mediterranean27. It was called as the most complete maritime customary law. The third is the
laws of Wisby enacted by Hanseatic League on the Baltic, and it prevailed in Scandinavian
and the Baltics, which exerted a great influence to contemporary maritime law in these

Analyzing the history of arbitration and maritime law, it is obvious that they have the same
developmental sequence in terms of territory. Recorded history suggests that mainly
merchants and traders appreciate arbitration. For assumption, maritime commerce was as
developed as other inland commerce, it can be concluded roughly that the development of
maritime arbitration is similar with that of general commercial arbitration, and the history of
maritime arbitration could be traced back to Ancient Egypt or Ancient Roman. Nevertheless,
without consideration of assumption, maritime arbitration had been recorded in maritime
codes in Mediterranean in thirteenth century.

Ibid 24
EddaFrankot, Medieval Maritime Law from Oleron to Wisby: Jurisdictions in the Law of the Sea,(June 28,
2018) available at
HailegabrielGedecho, Historical Development of Maritime Law, ( June 28, 2018) available at

As an important part of Commercial arbitration, maritime arbitration generated and gradually
developed with the development of maritime transport, in reverse, promotes the steady
development of the maritime industry. Since 20th century, along with the constant growing of
shipping industry and continuing increase of worldwide sale of good, maritime arbitration as
an effective way for maritime disputes has been developing in various countries. Such
development has shown some features that are unique to this period:

1. Increase of maritime arbitration cases, more diversity of type -

As the globalization of economic, trade and commercial activities was becoming more
diverse, the type and number of maritime arbitration was gradually increasing
simultaneously. At the beginning of twentieth century, cases of maritime arbitration
ranged mainly in charter party, marine transport, and marine insurance. Nowadays,
charter party still is the important part of maritime arbitration, but many cases
involving in ship collision, salvage and pollution also enter into the range of
arbitration with a gradual growth.

2. The emergence of new maritime arbitration center and decentralization of

arbitration location -
With a long history as a maritime arbitration center, UK is always in the firmly
leading position in maritime arbitration. However, with the change of national power
of UK and the development of economics in other countries, the position of London
as the world’s maritime arbitration center has been slightly weakened. Especially after
World War II, Asia-Pacific region has enhanced their maritime forces. Although the
battlefield of world maritime arbitration center becomes very fierce, London is still
the most important maritime arbitration. It is obviously to confirm this point of view
from the case number received by LMAA that about 90% maritime arbitration cases
in the world are submitted to LMAA every year.

3. Ad hoc arbitration to Institutional Arbitration

Institutional Arbitration is a standing arbitration body to manage the arbitration
proceedings, usually arbitrates under their own rules; Ad hoc arbitration is not
managed directly by any established institutions. Parties appoint arbitrators for a
specific case, and the arbitration tribunal is thus built up to hear the case. Since ad hoc

arbitration is an early form of arbitration which lacks stability, institutional arbitration
emerged in middle and later period of 19th century and developed rapidly in 20th
century, and is gradually challenging the dominant position of ad hoc arbitration.
Until now, USA, UK, Germany, Tokyo, Australia, Hong Kong and mainland China
have set up their own maritime arbitration institutions. These coastal countries or
region have been the main maritime arbitration center in the world. Because of the
stably improved professional arbitration made by these institutions, the standard of
international maritime arbitration has become better than ever.


The increasing commercial dispute is something that is in built in the international trade.
Thus we can say that it is unavoidable.
As a matter of dispute that could arise in the future, the contracting parties choose the method
for the resolution of any future dispute in a way considered the most suitable to their
interests. In fact, adequate dispute settlement mechanisms contribute to the development of
international trade. But lack of procedural inefficiency could affect the relations and trust
between the parties which could lead to increase in cost of future negotiation.

Talking about maritime world, arbitration is one of the most effective ways to solve the
differences. In general terms, maritime arbitration can be explained as the method of dispute
resolution by which the parties submit their dispute or differences or controversies arisen
among them to the judgment of one or more person who is impartial appointed by the parties
by mutual consent by way of relaxation from the ordinary state jurisdiction.

Arbitration may be defined as “maritime” when it involves maritime commercial disputes,

namely when there is a connection between the res litigosa and maritime navigation, industry
or trade.29

The sea is represented by the vessel. According to a well-known definition, “arbitration is

usually described as a maritime arbitration if in some way it involves ship.” Nowadays, there
has been a rapid increase in the maritime trade which is been performed with various means
of transport. This gives rise to legal uncertainty on the traditional function of the vessel as
exclusive and essential mode of operating of maritime transport.

William Tetley Maritime Arbitration is therefore the arbitration of maritime commercial disputes, p. 1417.

Maritime Arbitration is a special part of the international commercial arbitration. Due to lack
of specific sources of law except some of the provisions that are available or present in the
international conventions in relation to the uniform maritime law, this general treaties on
international commercial arbitration includes the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (1958) (the “New York Convention”) and the
Convention on the Execution of Foreign Arbitral Awards (1961) (the “Geneva Convention”)
are applicable.

However, in case of maritime arbitration, there are various irregularities that can be observed.

To start with these irregularities, it has some form of uniqueness as far as the source of law is
concerned. Generally, the arbitration agreement is made on the basis of uniform forms
drafted and which are updated from time to time by various maritime organizations which
includes the Baltic and International Maritime Council (BIMCO), the Association of Ship
Brokers & Agents (ASBA) and the Japan Shipping Exchange (JSE).In addition to it, there
exists various international arbitral centres which are specifically specialized in resolving the
maritime disputes. This specialized institution includes the London Maritime Arbitrators
Associations (LMAA) based in London, the Society of Maritime Arbitrators of New York
(SMA), the Chambre Arbitrale Maritime de Paris (CAMP), the Tokyo Maritime Arbitration
Commission (TOMAC), the Singapore Chamber of Maritime Arbitration, (SCMA) and China
Maritime Arbitration Commission (CMAC). The rules and terms are constituted with
reference to the contract made by the parties.

Further, the arbitrators can give their decisions on the basis of collection of rules and
principles established by the international maritime community which not only represents the
national but represents the international sources of law. It also provides the shipping industry
with some judicial assistance bestowed with a great amount of flexibility. The lex maritime
law can be called as a “soft law” as it does not have any binding effects. But as this law has
got an importance at the international level, it is hard for the parties to avoid its application.

Moreover, a distinctiveness of maritime arbitration is the object of the dispute itself, which
may refer to typical maritime institutions: most of the differences arise from charter-parties
involving the transfer of goods because of non-fulfillment of obligations by the seller or by
the carrier (e.g. damage to transported goods or to the ship, lay time and demurrage issues,

non-payment of hire); disputes may also deal with ship building, repairing and demolishing,
bareboat chartering, insurance claims, salvage or liability in tort (e.g. collision at sea)30

Usually, for a controversy, there needs some factual or technical questions which requires a
deep knowledge of maritime trade rather than just issues revolving around it. This needs an
intervention of accurate jurists. This had an influence also on the choice of arbitrators that for
a long time were selected rather among experienced commercial men than among lawyers.

The consistent degree of autonomy in the maritime sector shows also by the prevalent use of
ad hoc arbitration in which the rules to govern the procedure are set by the parties in the
arbitration convention, unlike institutional arbitration which, instead, is conducted according
to the binding rules of an arbitral institution. Ad hoc arbitrations are more flexible as well as
generally considered faster, cheaper (less administrative fees) and more confidential than
institutional proceedings. On the other hand, a distinct disadvantage is that the effectiveness
of this kind of arbitration is somehow dependent on the will of the parties, which may be
reluctant to cooperate causing a procedural breakdown that can result in additional time spent
resolving issues or in the necessity of recurring to the court (e.g. for the appointment of

Lastly, maritime arbitration is characterized by an imminent character of internationality,

considering both the subjective criterion, based on the nationality and place of residence of
the parties and the objective criterion founded on the nature of the dispute and of the
underlying commercial transaction and, particularly, on the involvement of international trade


Black’s Law Dictionary defines the legal term of arbitration as: “in practice, the investigation
and determination of a matter or matters of difference between contending parties, by one or
more unofficial persons, chosen by the parties, and called “arbitrators” or “referees.”

What is maritime arbitration?

There seems no unified definition yet made by law experts. Some scholars define it as a
regime that one party submits maritime disputes to a maritime arbitration institution or
Gary Born, International Commercial Arbitration: Commentary and Materials, The Hague,,.12 (2nd ed.

arbitrators for decision. British Scholars deem that every arbitration involves shipping
disputes can be regarded as maritime arbitration.32 Actually, these two definitions express
similar opinion regardless of wording. To give out a more comprehensive definition,
maritime arbitration is a non-governmental arbitration regime for resolving maritime
disputes, and it is a regime that maritime institution or arbitrators make an arbitral award for
maritime disputes with the application by one party and arbitration agreement or arbitration

To define essence, maritime arbitration is an important component of international

commercial arbitration. Therefore, it must inherit the general characteristics of international
commercial arbitration, such as autonomy, flexibility, economy, security, and ease of
implementation. Consummate maritime arbitration regime should not only reflect and
perform the inherent advantages of international commercial arbitration to achieve fairness
and efficiency, but also to fit the characteristics of maritime disputes to ensure a proper and
especial solution for maritime disputes.

There exist two ranges for the definition of maritime disputes: narrow and broad. Narrow
definition expressed maritime dispute as a dispute caused by the maritime accident
(especially means casualty resulted as property damage and personal injury); Broad definition
explicate it as a dispute refers to all maritime matters, including maritime trade and ships and
ship-related activities. Generally, the broad definition is more acknowledged and more

Therefore, in terms of maritime arbitration, those can be submitted include contractual or

non-contractual disputes that occur during maritime transport, offshore operations. They have
the following characteristics:

1)Professional and technical: Almost all the maritime disputes related with ships or
generated around the ships where strong professionalism and technicality are required.

2)Complexity: Another feature of maritime disputes is that legal relation is very complex. It
is very normal in shipping field to sign a purchase & sales contracts and multi-chain sublet
contract. Once one part of the chain had a dispute, all the seller, buyer, lesser and charterer
will be dragged in, and form a complex multi-party disputes.

15 Ronald Bernstein & Derek Wood, ARBITRATION INTERNATIONAL, 346 (3rd ed. 1999).

3) Real time, because of the mobility of ship and the fluidity of water, it is difficult to
preserve the scenes of disputes that occur in shipping transport and operation. Because of the
immediacy of maritime disputes, an efficient resolution is required.

The characteristics of maritime disputes decide the maritime arbitration has its own particular
feature that different from other kinds of international commercial arbitration.

1. The arbitrator of maritime arbitration must be familiar with professional legislation

and have wealth practical experience in shipping industry.

2. It is important to settle multi party with appropriate procedure and manner

3. Maritime arbitration is required to be more flexible, efficient and economical.

Meanwhile, because of these requirement, although institutional arbitration has increased in

recent year, most maritime arbitration choose ad hoc arbitration in London or New York as a
more flexible way. In 13th International Congress of Maritime Arbitrators, most countries
have reached the consensus that maritime arbitration is international, and its characteristics
determine it not to follow today’s international commercial arbitration with the trend of
increasing institutional arbitration. Moreover, it is also acknowledged by ICMA that
Maritime arbitrators are mainly performed by maritime experts, and maritime arbitration
culture should be vigorously promoted.33 Nowadays, with the numerous researches by law
scholars in the world, regime of maritime arbitration is nearly ideally integrated and stable. It
is reasonable to believe the appeal of ICMA will be satisfied in the recent future.


The development of the international seaborne trade has been followed by increasingly
complex legal and factual relationships between legal entities. This development requires an
increasingly high-professional legal, technical, business and other expertise in persons
engaged in resolving disputes among the various parties. State courts find it harder and harder
to meet these requirements. The role of maritime arbitration has consequently become more
important, in particular due to the fact that dispute settlements in courts in many countries
have become very expensive and time-consuming. In comparison with state judicial
proceedings, arbitration presents a faster, cheaper, more flexible and more confidential way
of settling maritime disputes. However, large corporations are not willing to sacrifice fair

CaiHongda, Comment on the 14th International Congress of Maritime Arbitrators in New York, 369. (2007).

proceeding and justice for fast settlement, so many arbitral tribunals and individual arbitrators
make additional efforts aimed at promoting their neutrality, skill and expertise.

All basic principles and provisions governing the organization and the functioning of
arbitrations apply also to maritime arbitration due to the fact that the latter is but a specific
form of general commercial arbitration. Maritime law is essentially a specialized branch of
commercial law so that maritime arbitrations resolve commercial disputes that involve
vessels. In most cases, these disputes arise from the breach of obligations agreed upon in
maritime contracts, which occurs quite frequently in national and international trade.
However, legal relationships and nature of disputes among partners in international seaborne
trade particularly emphasize the importance of certain features of arbitration proceedings and
significant efforts are made in order to maintain the quality of arbitrations, find enhancements
and deal with various difficulties. Due to their specific nature and importance, the
international maritime trade relationships have been regulated for a long time by special
national legal codes which are insufficiently harmonized at the international level. Given the
expanded international maritime entrepreneurship, efforts are made to remove the differences
in regulating maritime relationships because various national regulations result in legal
uncertainty. Harmonization of rules and standards, regardless of various national legal
systems and different interests of legal entities in joint maritime adventures, leads to
increased understanding and confidence among the nations and results in the coexistence of
law with politics and economy. Modern arbitration adjudication, including maritime
arbitration, responds to the dissatisfaction with the obsolete, slow, expensive and rigid state
adjudication. The purpose of maritime arbitration is to resolve maritime disputes in a fast,
efficient and professional way (these disputes involve vessels and all aspects of maritime
affairs related to vessels, e.g. disputes arising from charter parties, bills of lading or bills of
sale). Arbitral adjudication is therefore manifested as an expression of certain social
solidarity between the opponents in the dispute, common concepts of justice and fairness,
mutual loyalty before and during the dispute, their readiness to accept a solution that does not
necessarily meet their requirements in full. On the one hand there is fierce competition within
the international maritime industry, but on the other, there is cooperation and communion.
Although innovations are slowly introduced in this industry, they spread fast once their
commercial cost-efficiency is proved. Maritime arbitration is an innovation that has been
increasingly implemented within the industry.



Most of the states have enacted the legislation in relation to which offers enforcement of the
international agreements. There are many awards that are made in accordance to the
limitation of the courts to participate in the arbitration process 34. The United Nations
Commission on International Commercial Arbitration (UNCITRAL) is one of the leading
In most of the contract, the clause of arbitration is present as to provide them the option of
arbitration in relation to any dispute which could arise out of the contract. In case, if the
clause of arbitration is not present in the contract, then the parties can still apply or use the
provision of arbitration if both the parties agrees to do so. Arbitrators play a very important
role. They are private person selected by the parties. Similarly, the orders or the awards
passed by the arbitrators are binding in nature and are enforceable in the court of law.
Provided that the award passed must be in writing and should contain the whole explanation
behind passing the award. The proceeding is also subject to the legal rules. The law
governing the arbitral proceedings also deals with:

 Appointments and qualifications of the arbitrators

 Responsibilities of the parties
 Level of judicial intervention in the arbitral proceeding
 Conduct of arbitration
It also includes the choice of law which is to be followed during the proceeding. International
arbitration by which international disputes can be definitively resolved, pursuant to the
parties’ agreement by independent, non-governmental decision makers. The entire related
things are the result of complex legal framework. One of the most important arbitration
institutions includes the International Court of Arbitration (ICA) established in 1923 in Paris.
The institution offers the standard solutions in solving the maritime disputes. The Arbitration
Act, 1940/1996 is applicable for jurisdiction of India

Richard S. Sommer, Maritime Arbitration - Some of the Legal Aspects, 49 Tul. L. Rev. 1035, 1035-1037

Nowadays, the Court alone is not able to address all the issues which are related with the
conflict. Similarly, the present scenario of modern business requires a means for solving a
dispute which will help in meeting its demands. There is a need for a legal mechanism that
will help in solving the dispute in a quick, fair and efficient manner which the court is unable
to provide due to the technicalities35. The main cause behind it is the constant progress in the
field of trade and services. This development has also given a rise in technicalities in
transactions which ultimately lead to the urge to solve the dispute speedily as well as

This gives rise to the increase in the alternative dispute resolution for solving the disputes
which is under the judicial systems. Also this can provide a flexibility and speed in disposing
off the matter. The method of Arbitration has proved to be very useful among the parties. It
highly ensures that all the participating parties should possess the feeling of confidentiality
while they are on the way to find a solution to their problem. In the recent era, this type of
dispute solving method has highly earned a prominent place at the global level which gave
rise in the increase various judicial movement. This goal is achieved by properly codifying as
well as applying the framework of the related law just to make sure that justice can be

Globalization has an impact in every field in the world. Maritime Arbitration is no exception
to it. The increasing progress in economy has placed this world at a totally different place.
Various trade methods are also responsible in achieving that place. Development is never
alone. Due to various changes in trade as well as economic relations, the interests as well as
the objectives has also been departed. A solution was also required to face such challenges.
As a result, the method of Arbitration has taken a birth. It has been established to cover the
failures of the domestic law, for better understanding of the law and to maintain a proper
balance with the rapid changes taking place in the trade customs. Hence the method of
Arbitration is used is settling the disputes which is different from the judicial settlement.


The method of Arbitration is considered to be one of the most ancient methods in solving the
dispute. As this method spread all over the world as peaceful settlement of dispute, there has
been an increase in the maritime dispute due to maritime transportation activities and

Ahmad Saad; ZiskaRizvi, Maritime Arbitration - Legal Perspectives, 4 CT. Uncourt 8, 8-10 (2017).

maritime commercial transactions36. The basis of Arbitration is based on certain formal
requirements. Almost all the Arbitration rules, which are present in Spain, Italy, the
Netherlands, Germany, United States, Switzerland, England, Peru and many other countries,
the New York Convention on the Recognition and Enforcement of Foreign Arbitration
Award of 1958 has played an important role in setting up the rules. Similarly, the original
version of the UNCITRAL Model Law on International Commercial Arbitration of 1985 or
the amended version of 200637 has given certain crucial formal qualifications.
Various types of Maritime contract are present at the international level. This requires a
special scope of settlement rather than the normal court procedures. For example, in charter
parties a huge variety is used in the forms of different trades as well as for commercial
purpose. But nowadays, various changes can be seen in the form of Charter Party. Generally,
the clause of Arbitration is present in every contract. The only thing that changes or varies is
the terms of the contract.

Among all the disputes such as commercial, economic or global, Maritime Arbitration has a
great place in solving the dispute among the parties. One of the most important features about
maritime arbitration is the prior consent or approval required by both the parties to tolerate
any award given out of the dispute.

No participation or lack of participation of public in the arbitration dispute has proved

beneficial. This easily leads to confidentiality as well as efficiency in clearing the dispute.
The technicalities present in the Maritime Arbitration are totally based on the rituals and
customs of the maritime. Also it is based on the availability of the arbitrator as well as the
counsels who are highly familiar with the technical knowledge of the field as well as all the
information related to the maritime issues, international conventions, treaties, customs and
the rules of the judiciary.

Like the normal arbitration, Maritime Arbitration is also made in accordance with the prior
agreement which is made among the parties through a contract. It contains the Arbitration
clause. This clause is made as per the will of the parties. If the clause is made with a free will,
it is termed as the ad hoc arbitration. It is on the will of the parties as to decide the place of
the arbitration i.e. where the arbitral process is going to take place. It also includes which
rules and regulations need to be followed. In short, it can be said that it is to be undertaken by

Ibid 35.
UNCITRAL,(June 25, 2018) available at

the international organization or body which performs as per the decided rules and
regulations along with the place of arbitration which is initially defined by various
international conventions and resolutions.

After the 2nd World War, the concept of Arbitration Center was much increased. It
gained much popularity around the world due to the expansion of free as well as international
trade. Each type of arbitration center deals with different types of issues. One special type
includes the institution for maritime which includes Maritime Arbitration Association of New
York, the Association of Maritime Arbitration in London, the Maritime Arbitration Chamber
of Paris, and the International Maritime Organization.


Historically, Maritime Dispute Resolution can be referred as the oldest form of arbitration. It
gives individuals the option to choose the arbitrator according to their own good will which
they choose on the basis trust and the experience in the field. This type proved to be more
flexible as well as realistic than the normal arbitration institution. Another advantage includes
the clause of confidentiality as well as the speedy disposal of the matter. But every coin has 2
different sides. The restrictive part of the institution includes the case when the party is not a
country i.e. the matter of private arbitration38.
In the present chapter, the researcher will look upon certain Maritime Arbitration Institution
that is renowned all over the world.


Arbitration is a private method of resolving disputes. It is used when parties agree to refer
their dispute to an impartial tribunal consisting of one or more arbitrators. Parties normally
agree to arbitration by means of an arbitration agreement in a contract made before a dispute
has arisen. It can also be agreed after a dispute has arisen. Arbitration differs drastically from
court proceedings which arises out of an agreement and the rules which governs the
procedure of litigation does not allow, thus allowing a flexible and confidential procedure to
be adopted to suit the parties’ convenience. Arbitrators are generally appointed by the parties
(or by means to which the parties have agreed) and are paid by the parties; they are usually
chosen for their familiarity with the commercial, technical or legal aspects of the dispute. The

Ibid 35.

advantages of arbitration are its privacy, its potential as a flexible, speedy means of resolving
commercial disputes and the ability to enforce arbitral awards under the New York
Convention. However, the efficiency of arbitration depends on the cooperation of the parties
(and their lawyers and indeed the arbitrators) in preparing a case and minimizing the areas of
substantive dispute. The Arbitration Act 1996 places duties on the parties and the arbitrators
to ensure the dispute is resolved efficiently. However, in practice it may be difficult to
enforce these duties and arbitration can be just as slow and expensive as litigation if the
parties will not cooperate and if the arbitrators do not take a firm approach to the
“London maritime arbitration” is a broad term usually applied to arbitration taking place in
London where the dispute involves in some way. For example, a dispute under a charter-
party, bill of lading, ship sale agreement or shipbuilding contract. There is, however, no strict
definition of maritime arbitration which would require the involvement of a ship and any
arbitration carried out on terms published by the London Maritime Arbitrators Association
(LMAA) might be termed as maritime arbitration39.

London has a long history of the tradition of maritime arbitration. The impartiality of the
English courts as well as English Arbitrators and lawyers are the main reasons why many
parties prefer this medium to resolve their dispute40. English Tribunal is mainly known for
their neutrality, impartiality and professionalism which eventually become the pre-eminent
feature of the London Maritime Arbitration. The arbitrators in the institution works as a full
time arbitrator. This helps in achieving 2 benefits. Firstly, the Arbitrators receive a large
number of appointments. Due to this they get a lot of experience in providing the service in a
shorter period of time as compared to the part time arbitrators. Moreover they are calm in
providing their service as a professional arbitrator. It is followed by the consistency of
arbitral decisions with a certain legal certainty. The arbitrator makes a decision according the
provisions of the law. The London Arbitration is favorable due to its well regulated
procedures. Claimants are satisfied if they know the reasons behind the award. If not, they
may feel frustrated with conduct of the arbitration

More importantly, importance is given to the confidential nature of arbitration. In common

law there is a presumption that, unless the parties agree to disclose the award publicly, it will

The London Maritime Arbitrators Association, available at /about-us-Introduction.aspx.
Marco Gregori, Maritime Arbitration Among Past, Present and Future,(June 27, 2018), available at

not be published. Also, under the LMAA terms, the tribunal may publish a decision if neither
of the parties objects to this. The publication preserves secrecy, which means that the identity
of the parties, their representatives and the arbitrators is not released. In practice, publicity is
given to those arbitration decisions that have general interest. With the consent of the parties,
summaries of awards are published in Lloyd's Maritime Law Newsletter without the
disclosure of the names of the parties, the arbitrators or the ship concerned. This unique
practice is supported by many in the shipping industry, which is an advantage for English
London is the major seat of maritime arbitration in today’s world. It is believed that a
minimum 3000 arbitral appointments take place. It is equal to 70% of maritime arbitration
conducted in the world. Among this, 90% of them are international i.e. either of the party is a
foreigner. The London Maritime Arbitrators Association (LMAA) is the leading arbitral



London maritime arbitration traces its origins back at least to the birth of the Baltic Exchange
at the Virginia and Baltick Coffee House in 1744.41 Traditionally, maritime arbitrators were
members of the shipping trade who found time to act as arbitrators. Maritime arbitration is
now much more time consuming and formal. Most arbitration is carried out by full- time
professional arbitrators, technical experts, or lawyers who charge a professional fee. The
LMAA is a professional association which was set up in 1960, originating from a group of
brokers at the Baltic Exchange who were listed as available to be appointed as arbitrators.42
The objects of the Association were described at its first Annual General Meeting as, “to see
that the machinery of Arbitration is adequately manned and new Arbitrators trained, also to
further our aim that London Arbitration shall not only be strictly impartial and economical,
but reasonably expeditious so far as consistent with thorough investigation and sound
The LMAA plays a central and supportive role in London maritime arbitration. Its members
conduct the vast majority of maritime arbitrations in London. In 2015, there were at least
3160 appointments on LMAA terms and at least 438 awards issued under LMAA terms.

John Tsatsas, A focus on maritime arbitration: the LMAA Conference 2010, 76(3), 396–398(2010).
M. Summerskill, TheLondon Maritime Arbitrators Association, 51, 503–513, 504, (1985).
Ibid 39.

The LMAA consists of two main groups of members: full members and supporting members.
As at January 2017 there are 37 full members who are generally prepared to undertake
maritime arbitration of any description or duration. Approximately two thirds of these have a
mostly legal background and the rest have technical or commercial expertise. Many full
members arbitrate as a full- time occupation. They would almost certainly be treated as
“commercial men” or “engaged in the shipping trade” for the purpose of satisfying such a
qualification required in an arbitration clause. To become a full member the applicant must
demonstrate his knowledge of the relevant areas of English law and competence in writing
awards. The general rule is that an applicant for full membership must have been engaged for
at least 15 years in a position of responsibility within the shipping industry, generally in
commercial, technical or legal areas. Applicants must be UK residents. 44
The second group of LMAA members consists of around 750 supporting members drawn
mainly from the shipping trade, solicitors’ firms, barristers and P&I clubs. Supporting
members do not, as a general rule, practice full- time as arbitrators but may from time to time
accept appointments and wish to lend their support to the objects of the LMAA. Applicants
for supporting membership should be aged at least 28 with suitable commercial or technical
experience or be qualified as a lawyer for five years. The application must be supported by
one full member or two referees, preferably supporting members.45


The LMAA Terms were first introduced in 1984 and amended versions came into force in
1987, 1991, 1997, 2002, 2006, 2012 and most recently in 2017. The Terms are flexible in that
the parties and the arbitrators may agree to alter or dispense with any part of them. The
combination of clarity, convenience and flexibility found in the LMAA46 Terms means that
they are often chosen to govern arbitrations where the arbitrators are not members of the
LMAA, for instance where the sole arbitrator is a practicing lawyer. The Terms provide
further detail and, in some respects, confer greater powers on the tribunal.


London Maritime Arbitrators Association, available at “Guidelines for Full Membership” GUIDELINES%20FOR%20FULL%20MEMBERSHIP.pdf.
Ibid 51.
Arbitration &Conciliation Act 1996, Section 14, Chapter 10, Appointments.

The LMAA Terms contemplate three circumstances in which the LMAA Terms may
apply to a reference. The first, and most straightforward, is whenever the parties have agreed
expressly that they shall apply.47 Such agreement is most commonly to be found in the
arbitration agreement between the parties. However, such an agreement could be concluded
at any time, even after a reference has been commenced.
Paragraph 5 of the LMAA Terms48 also specifies two specific circumstances in which the
parties “shall be taken” to have agreed that the LMAA Terms shall apply to their reference,

(a) whenever the dispute is referred to a sole arbitrator who is a full Member of the
Association and whenever both the original arbitrators appointed by the parties are
full Members of the Association, unless both parties have agreed or shall agree
(b) whenever a sole arbitrator or both the original arbitrators have been appointed on the
basis that these Terms apply to their appointment; and whenever a sole arbitrator or
both the original arbitrators have been appointed on the basis referred to at (b), such
appointments or the conduct of the parties in taking part in the arbitration thereafter
shall constitute between the parties an agreement that the arbitration agreement
governing their dispute has been made or varied so as to incorporate these Terms and
shall further constitute authority to their respective arbitrators so to confirm in writing
on their behalf.

Though considered as the hub for Maritime Arbitration, there are also some criticisms on it.
There are reports that arbitrators insufficiently represent the maritime community. This
argument is dual-edged. One criticism is that maritime arbitrators are “owner-oriented,”
particularly the full-time members of LMAA. This suggestion seems unfounded. Parties can
choose from among a variety of different arbitral institutions. On the other hand, the LMAA
has arbitrators from a number of disciplines. Although it is true that the LMAA's full
membership includes a few arbitrators with a chartering background, this does not prove any
bias in the decision-making process49. There can be a three-person tribunal with a
combination of expertise and ultimately the parties are free to appoint whomever they like to

LMAA Terms, para 5.
Ibid 47
Petros N. Tassios, Choosing the appropriate venue: maritime arbitration in London or New York? 21(4) J.
Intl’Arb.355-65 (2004).

serve as arbitrators50. The impression that owners are favored is given because most of the
time the ship-owner is the claimant, and in maritime arbitration, the claimants tend to succeed
more often than not.

The question of delay is the second source of irritation to claimants under the London
arbitration system. There are some arbitration proceedings, which do not last more than two
or three days, while others run two years or more. According to statistical research conducted
with a representative sample of 110 cases, the following conclusions emerged from
appointment to award, 53 per cent of arbitrations were concluded in six months, 75 per cent
in eleven months, and 85 per cent in one year. The average duration of documents-only
arbitrations is lower, as 90 per cent of them were finalized without exceeding the period of
one year, and 61 per cent completed in six months. Other sources estimate that the length of
time it takes to resolve a simple demurrage dispute is no less than a year.

During the last few years there have been increasing complaints about the high cost of
dispute resolution. Cost constitutes the main case against London maritime arbitration.
Making a comparison between constituting an arbitral tribunal in London and in the Chambre
Arbitrale Maritime de Paris, the cost of the former is five to ten times higher than in France.
Similar results can be obtained elsewhere, as verified by an examination of arbitrations
conducted by the German Maritime Arbitrations Association. The legal expenses in Germany
are on average three times lower than those incurred in London. In London, the losing party
can expect to pay £7,000 per day in fees to arbitrators, barristers, solicitors and experts. This
amount does not include fees for the preparation of the case. With such costs, it is not unusual
for an arbitration to cost close to U.S.$100,000. Although these numbers should be treated
with caution, London is certainly more expensive than other arbitration centres. This is due to
the length of some arbitration, but has mainly to do with the nature of the English procedural
system. The parties have to engage two lawyers, i.e., a solicitor and barrister, creating a
duplication of costs.

The parties cannot ignore the differences in costs, which sometimes exceed the amount in
dispute. A realistic proposal for the control of costs is to standardize arbitration fees and cap
legal fees at a percentage of the sum in issue. A notable example is theInternational Chamber
of Commerce, where the arbitral panels have fixed fees as a percentage of the amount in

Li Lian-jun and Liu Yang, Arbitration agreement and appointment of arbitrators in international maritime
arbitration,21(4) Annual of China Maritime Law 97 (2010).

dispute. In addition to this, the cost of arbitrations will not be reduced as long as parties
continue to involve lawyers at every point of the arbitration process.

There is also debate about the highly confidential nature of London arbitration. Parties'
identities and arbitrators' names, as well as the reasoning of an award, are not subject to
public disclosure unless otherwise agreed. Arguments for increased transparency have been
made in this respect because non-publication of awards undermines the predictable character
of arbitration in the United Kingdom. The opponents of this idea believe that a movement
towards the publication of awards could prejudice London's leading arbitral position, because
those who value confidentiality will go elsewhere in search of privacy. The latter argument
makes sense as privacy and confidentiality are inherent characteristics of London maritime


New York is the leading commercial arbitral forum in the United States and has been an
important international centre for arbitration in shipping51, taking on 20 per cent of maritime
arbitration cases worldwide. So far, the Society of Maritime Arbitrators (SMA) has resolved
approximately 4,000 cases.


Arbitration agreements in maritime contracts have a long history. The insertion of a provision
for arbitration of disputes under charter-parties was common practice as early as the 18th
century. Agreements to arbitrate were lawful in the United States, but before the passage of
the Arbitration Act, courts would not aid a party to enforce an arbitration clause if the other
party chose to ignore it. If the controversy was in suit, and the parties agreed to submit the
matter to arbitration as a "Rule of Court", their agreement was given full effect. But if one
party tried to enforce a clause saying all future disputes would be arbitrated, it met only
frustration. The courts recognized that a breach of an agreement to arbitrate, just as any other
term, was a breach of the charter, but an award of damages for breach of such a provision was
so indefinite that nothing could be recovered.

The first arbitration act in the United States was passed in New York in 1920. Under this state
act for the first time a party who wanted to enforce an arbitration clause against a reluctant
party could go into court and obtain what amounted to an order requiring specific

Society of Maritime Arbitration, Inc., Guide to Maritime Arbitration in New York, (June 28, 2018) available
at http://www.smany.or/ sma/about2.html

performance of the arbitration provision. Based upon the provisions of the New York Act, the
United States Arbitration Act was passed in 192552.

The United States Arbitration Act was originally enacted with maritime contracts in mind,
but it applies more broadly. Not only "maritime transactions", but those "evidencing a
transaction involving commerce"53 are included. Thus, international sales contracts as well as
charter-parties come within the Act. Section 254 makes any written provision to arbitrate a
controversy "thereafter arising out of the contract" valid and enforceable. The agreement to
arbitrate must be in writing, but it need not be signed. The teeth of the Act are contained in
Sections 355 and 456. If a suit is brought for breach of any contract which contains an
arbitration clause, the court must stay the trial of the action until the arbitration has been held.
This prevents a party from pursuing a claim in court where the contract provides for
arbitration. Section 4 is very important. It gives "an aggrieved party" the right to petition a
United States court for an order compelling a reluctant party to submit a dispute to

Section 557 provides for the appointment of an arbitrator by the court if no method is provided
in the contract. If a method is provided in the contract, however, it must be followed. Section
758 gives the arbitrators the right to use the same powers as courts use to compel attendance
of witnesses to testify before them. Section 859 allows a party to use the usual forms of
attachment and arrest of vessels or other property in order to commence arbitration
proceedings so as to have security for the claim. Section 960 permits the successful party to
obtain a court order confirming and enforcing an award. Section 1061 provides limited
grounds upon which an award may be vacated by a court. Section 1162 provides for a court to
correct minor errors such as miscalculation of figures, or to correct the award in form.

Society of Maritime Arbitrators, (June 28, 2018), available at
United States Code Title 9 of.Section 2.
The US Arbitration Act 1925 Section 2,refers to validity, irrevocability, and enforcement of agreements to
Id 54 Section 3, Stay of Proceedings where issue therein referable to arbitration.
Id 54 Section 4, Failure to arbitrate under agreement; petition to United States court having jurisdiction for
order to compel arbitration; notice service thereof; hearing and determination.
Id 54 Section 5, Appointment of arbitrators or umpire.
Id 54 Section 7, Witnesses before arbitrators; jurisdiction; procedure.
Id 54 Section 8, Proceedings begun by libel in admiralty and seizure of vessel or property.
Id 54 Section 9, Award of arbitrators; confirmation; jurisdiction; procedure.
Id 54 Section 10, Same; vacation; grounds; order.
Id 54 Section 11, Same; modification or correction; grounds; order.

The Society of Maritime Arbitrators was found in 1963. Maritime arbitration in the City of
New York prior to 1963 was quite informal, and, in many ways, remains so. The arbitrators
are appointed by letter. No uniform format or procedure is followed at the hearings, and the
type of evidence submitted by each side is totally of its own selection. Before 1963, the
arbitrators generally chosen were, for the most part, chartering brokers. Some of these
acquired considerable skill and experience.63

In 1963, a group of nine men with arbitration experience, chartering brokers and steamship
agents, formed the Society of Maritime Arbitrators64. The founders felt that an organization
should be established to make the practice of maritime arbitration in New York more uniform
and to provide a body of experienced arbitrators that could be called upon by the industry
with some degree of certainty that the men selected would be competent to hear and
determine disputes in this rather specialized field. Membership in the Society has grown over
the years until today it has over 120 members65. One of the important services provided by
the Society is to require that its members attend a course of instruction in how to handle
arbitration and render an award. The Society has prepared a set of rules to govern the
proceedings at arbitrations. These rules are not mandatory. They apply to the proceedings
only if both parties agree that they shall apply. Such agreement may be in the arbitration
clause, but usually it is not. Normally, the attorneys agree, at the outset of the hearings,
whether or not the proceedings should be governed by the Society rules.

The rules are loosely based upon the commercial arbitration rules of the American
Arbitration Association, but there are many important differences. They do not conflict in any
way with the United States Arbitration Act, and state specifically that they "shall be
subordinate to the Act in the event of any conflict". Several of the rules are important enough
to be commented upon. Section 966 contains a provision about disclosure.

The Society rules follow the United States Act on the appointment of arbitrators If an
arbitrator dies or resigns or is unable to continue to perform his duties, the vacancy should be
filled by a new nominee. Section 3167 of the rules permits the arbitration to be held without

R. Glenn Bauer, Maritime Arbitration in New York, 8 Int’l Bus. Law.306 (1980).
Society of Maritime Arbitrators,
Ibid 59.
Maritime Arbitration Rules of Society Maritime Arbitration RulesSection 9, Disclosure of Arbitrators of
Disqualifying Circumstances.
Id 66 Section 31, Award upon Settlement.

any oral hearings. On this type of submission, documents are merely mailed to the arbitrators
with copies being mailed to the other side.

Section 3268 of the rules requires the arbitrators to render their award within 90 days from
receipt of the last document. This rule is almost waived by agreement. The rules provide that
the arbitrators themselves shall determine the amount of their compensation. Section 42 says
that in fixing these fees, regard should be taken to the time expended, the size of the claim,
the complexity of the issues and the urgency of the matter. There is no scale of fees in the
rules or otherwise. The arbitrators have complete freedom in this respect and the fees per
arbitrator may run anywhere from S100 in a simple matter to $18-20,000 and up in a complex
case involving millions of dollars and many hearings.

A rule often utilized by the arbitrators is Section 43 which allows the arbitrators to require the
parties to deposit in advance a sum of money as security for fees and expenses. This
provision is utilized because arbitrators have experienced situations where fees were not paid
after an arbitration award has been rendered, usually by the losing party, but sometimes even
by the winning party.


The Society of Maritime Arbitrators has rules regarding procedure, but these are not very
detailed and leave a considerable amount of discretion to the arbitrators and counsel for the
parties. A party may choose to be represented by counsel, but it is not necessary. Usually
there is a stenographic record of the proceedings by a public stenographer and the cost of this
record may be apportioned between the parties by the arbitrators. Witnesses are to take an
oath before testifying, and the arbitrators are to take an oath of office. Any person having a
direct interest in the arbitration may attend the hearings, but the arbitrators may require others
to retire from the hearing room. Evidence to be submitted to the arbitrators is not seriously
restricted. A party may offer any evidence it desires. The arbitrators are the judge of
relevancy and materiality of the evidence offered, but it is very rare indeed that arbitrators
will exclude evidence of any kind69. Evidence must be presented within the presence of the
arbitrators and of all the parties. Conformity to legal rules of evidence is not necessary.
Witnesses may testify by affidavit, but in an important case, it has become very rare that New
York counsel will rely solely upon affidavits. In arbitrations as in United States courts, a

Id 66 Section 32, Delivery of awards to Parties.
Ibid 68.

written statement given under oath before a public officer is not considered to be weighty
evidence. The American legal system relies upon cross-examination of witnesses to bring out
the truth, and affidavits cannot be cross-examined. As a result affidavits are usually used only
for relatively unimportant witnesses and in small cases.

The procedural rules of the Society grew out of and conform to the practice developed in
New York by lawyers specializing in this field over the years. The usual arbitration
commences with an opening hearing at which the arbitrators make their disclosures, the party
seeking recovery presents a preliminary written memorandum and exhibits, and at this or
subsequent hearings, calls witnesses to testify. The witnesses are cross-examined by opposing
counsel in the accepted American manner.

There is no provision for discovery of documents or other evidence before the hearings
commence. However, the practice has developed for demands to be made at the hearings, and
if these are ignored, either the arbitrators are asked to issue a subpoena to force production of
the documents, or they are asked to make an adverse inference of fact against the recalcitrant
party when rendering their award.

When finished, the first party closes his case, and the other party has his chance at subsequent
hearing dates to present documents and witnesses. Rebuttal by the first party is then allowed.
After all evidence is in, a time is selected for the filing of briefs. An American lawyer's brief
is actually a long written summary of the facts and legal points which he wishes to present to
advocate his client's position. Reply briefs are then exchanged in which the attorneys give
their answers to the arguments of opposing counsel. When the briefs and reply briefs have
been submitted, the arbitrators arrange a meeting time at which they have their deliberations.
It is customary for the third arbitrator or chairman to write the award. The decision need not
be unanimous; a majority is sufficient.

One of .the Society's special functions is to publish an award service in which arbitration
awards are reproduced and circulated to the industry. The policy of the Society isfor each
award to be a "reasoned" award in which the arbitrators give, in considerable detail, the
reasons for the decision which they are rendering. A dissenting arbitrator may also write the
reasons for his dissent.


One of the features of maritime arbitration in New York which has been much utilized in
recent years is the consolidation of arbitrations so that a single panel can decide disputes
arising under a number of charter-parties, but which involve common questions of fact such
as questions arising out of the same voyage or series of voyages 70. Previously where a ship
under charter was sub-chartered to another, it was not possible for the charterers in the middle
to have their claims handled in one proceeding. Sometimes inconsistent awards were
rendered by different panels of arbitrators, and the middle charterer would have to pay
damages and then find it could not recover these damages from the responsible owner or sub-
New York state and federal courts borrowed from the rules of procedure in civil suits and
applied to arbitrations the rule that two or more disputes which involve common questions of
law or fact can be heard together in one consolidated proceeding.

Court orders have since been issued in numerous cases requiring this type of consolidation.
Certain awkwardness develops when it comes to the size of the panel of arbitrators. Since
each charter-party permits both the owner and the charterer to choose an arbitrator and the
two to choose the third, it is not unusual to find five-man panels of arbitrators being
appointed these days, although very few of these unwieldy panels have rendered any awards.
Where two sub-charters existed, a seven-man panel has resulted. The possible size of the
arbitration panel in the not uncommon situation where three or four charters exist for one
voyage boggles the mind.

Fortunately, however, where the charter-parties are identical in terms, the parties in the
middle usually waive the right to appoint arbitrators and the consolidated arbitration can be
heard by a panel of only three arbitrators


The right to challenge an arbitration award under United States law is severely restricted.As
mentioned above, the United States Arbitration Act provides only limited grounds for
vacating an award. Basically, the conditions for vacating an award are corruption, fraud, bias,
misconduct or misbehavior. Another ground is where the arbitrators have "exceeded their
powers". Courts have said that an award which is "irrational" cannot stand and have also said
that when arbitrators are guilty of a "manifest disregard of the law", the award cannot stand.
These expressions are very vague and although attempts are frequently made, it is so rare that

R. Glenn Bauer, Maritime Arbitration in New York, 8 Int’l Bus. Law.306, 306-310 (1980).

an award is upset that it can safely be said that in the United States, there is in fact no
meaningful judicial review of the arbitrators' work. The courts have held that errors in the law
and mistakes in the facts are not sufficient to set aside an award71.

There are several advantages to holding maritime arbitration cases in New York. First,
arbitrators have commercial experience. The U.S. Court of Appeals for the Second Circuit
(the state's highest federal court) defined them as, “individuals who have substantial,
practical, commercial experience and who work or have worked for commercial persons.”

Generally, such arbitrators base their judgments on commercial realities rather than the
precise wording of the contract. Furthermore, an arbitrator can give a different award on the
same issue if he feels that the marine commercial climate has changed. Looking at the SMA
member list, there is a distinct shortage not only of lawyers, but also of arbitrators with any
legal background. This affirms the “commercial” character of New York arbitration, whereby
traditionally all the arbitrators are actively engaged in the shipping business. There is not a
legally binding system of precedent, which means arbitrators are not prevented from making
what they consider a more commercial decision. This type of arbitrator is considered by
many in the maritime community as being the best qualified to resolve maritime disputes.

Another advantage is the full publication of awards, a unique characteristic of maritime

arbitration in New York. All SMA awards, together with dissenting opinions, are available in
public disclosure through LEXIS. This availability greatly assists parties to forecast the result
of a particular matter in the settlement of a dispute. Although arbitrators are not bound by the
decision of earlier awards, the latter are one source of de facto established precedent. This
introduces a greater element of consistency, clarifying specific areas of arbitration law.

As for judicial review, this is extremely limited because it is only permitted in rare
circumstances. Courts can examine any deficiency in arbitration procedure, but not errors of
law. In this way, awards have a tone of finality and the parties are free from appellate
proceedings, saving time and cost. The high interest rates employed by arbitrators when
calculating assessed interest in awards are also an advantageous attribute of New York


American Almond Prod. Co. v. Consolidated Pecan S. Co., 144 F.2d 448 - 451(2d Cir. 1944).

On the other hand, criticism of New York maritime arbitration has focused mostly on delays
in rendering awards and the high cost of arbitration. Many parties have found New York
maritime arbitration to be slow. Delays in rendering awards have been attributed to four
factors. In the first instance, the problem arises from the lack of full-time arbitrators who
schedule arbitrations at lunchtime or in the late afternoon, outside normal business hours.
This creates considerable practical problems in arranging a hearing for consecutive days.
Additionally, despite the shortage of professional arbitrators, panels consist almost invariably
of three arbitrators, rather than a sole arbitrator, which would be more logical. Also, there is a
concentration of arbitral duties among a small number of arbitrators, as 90 per cent of claims
are undertaken by a small group of arbitrators. The fourth factor is the issuing of reasoned
awards, which are detailed and for this reason time-consuming, rather than awards which
simply state the outcome. The SMA, through its Rules and Shortened Arbitration Procedure,
has set time limits on tribunals for the rendering of awards, in order to minimize undesirable
delays. Time will be saved, insofar as arbitrators avoid unnecessary and irrelevant testimony,
which is presented directly by affidavit (as in U.S. federal courts). The rejection of
appointments by SMA arbitrators, when they do not have time to hear a case, is an alternative
solution. However, it seems unrealistic, because arbitration is a lucrative business and any
drop in the number of hearings would mean loss of profit.

Critics of New York maritime arbitration also cite the high cost as an additional
disadvantage.. Fees for arbitrators range from U.S.$125 to U.S.$200 per hour, while attorneys
are paid approximately U.S.$150 (junior partner) and U.S.$275 (senior partner) per hour. The
formation of tripartite tribunals and the large number of short hearings are also factors that
contribute to the increase in costs. The present situation can be improved if parties can agree
on a sole arbitrator and if arbitrators limit discovery during arbitral proceedings.

It has also been said that New York arbitration is more orientated to charterer and cargo
interests. This view is based on the argument that the United States used to have a small
merchant fleet relative to its size and because of this the SMA used to be the forum of choice
for a number of U.S. charterers. However, this is totally baseless as there are many New York
arbitrators who come from a ship-owning background and, further, New York is the centre
for ship-owners in the United States. An analysis of 175 SMA awards confirms that it does
not favor charterers. Out of 142 awards, in only thirty-three cases were the winners’

The Singapore Maritime Arbitration is one of the important places for maritime arbitration.
There were many change made in the Rules of Singapore Maritime Arbitration. The SCMA
last changed its Rules in May 200972. The most significant change then was from an
institution administrating the arbitration process to a maritime industry driven entity
providing a framework for maritime arbitration which gives party autonomy. It is therefore
more akin to the traditional approach to maritime arbitration as exemplified by the London
Maritime Arbitrators Association than the approach taken by the International Chamber of
Commerce for commercial arbitration. SCMA arbitration is commenced by the claimant
notifying the respondent.

The Rules have been revised again in 2015 and the 3rd Edition was published in October

Under the Rules the assumption is that the tribunal is of three arbitrators, but the parties can
agree on a sole arbitrator or some other arrangement74. Although there is a panel of arbitrators
listed by SCMA, the parties can appoint any person that they chose to be an arbitrator. In the
event that the parties cannot agree on a sole arbitrator or two arbitrators cannot agree on the
appointment of the third arbitrator, on application of a party, the appointment is made by the
Chairman of the SCMA. There is no scale of arbitrators fees, but there is a requirement that
arbitrators shall disclose their hourly rate, the number of hours worked and the purpose of
that work75. The law of the dispute can be any law that the parties have agreed76. The
physical as well as the judicial place of the arbitration is Singapore, unless the parties agree
another place77. If the juridical seat is Singapore, the arbitration is subject to the International
Arbitration Act of Singapore, irrespective of the nationality of the parties.

The SCMA provides a set of Rules and a set of model clauses which do not form part of the
Rules. Schedules to these Rules can also be issued and apply as from the date that they are

Singapore Chamber of Maritime Arbitration, available at
arbitration- adrinstitutions /Singapore-chamber-of-maritime-arbitration.
Singapore Chamber of Maritime Arbitration, (June 29 2018), available at
Id 73, Rule 46.11,(3rdedOctober 2015).
Singapore Chamber of Maritime Arbitration,Rule 46.13, The fees of Arbitrator(s) shall be capped at US$5,000
or, if there is a counterclaim, US$8,000 in total per Arbitrator (which for small claims, it is usually a sole
Arbitrator.) (3rd ed. October 2015).
Id 75, 21, The Tribunal shall apply the law designated by the parties as applicable to the substance of the
dispute. Failing such designation by the parties, the Tribunal shall apply the law determined by the conflict of
laws rules which it considers applicable. (3rd ed. October 2015).
Id 75, Rule 22, Judicial Seat of Arbitration. (3rd ed. October 2015).

issued, not retroactively. Notes of Guidance can also be issued and are non-binding. There is
a small claims procedure for claims not exceeding USD150, 000 as set out in the last part of
the SCMA Rules78. Under this procedure, there is a sole arbitrator and a cap on arbitrator’s
fees and recoverable legal costs. The current Rules incorporate SEADOCC (SCMA
Expedited Arbitral Determination of Collision Claims) a set of rules specifically designed for
resolving collision cases by specific agreement to arbitration after the claims have arisen79


There are now 4 model clauses. The first is the SCMA BIMCO Arbitration Clause 2013
which follows the BIMCO (The Balticand International Maritime Council) standard clause
which now has options for arbitration in London, New York and Singapore. The second is the
SCMA Arbitration Clause as was published previously. The third is the SCMA Bunker
Arbitration Clause applying the Singapore Bunker Claims Procedure80. The fourth is the new
SCMA Arb-Med-Arb Clause allowing a mediated settlement to be made into an enforceable
arbitration award81.


Arbitration is commenced by the claimant serving a written notice of arbitration on the
respondent82. This notice should include:
(a) a request that the dispute be referred to arbitration,
(b) the identity of the parties to the dispute;
(c) reference to the arbitration provision in the contract;
(d) reference to the contract relating to the dispute;
(e) proposal on number of arbitrators; and
(f) the name(s) of the claimant’s proposed arbitrators. It will be noted that arbitration is
commenced without an arbitrator actually being appointed.

Within 14 days of receipt of the notice of arbitration the respondent shall serve on the
claimant a comment in response to any of the proposals contained in the notice of arbitration
and the name(s) of the respondent’s proposed arbitrator(s)83. It will be noted that there is no
need to inform the SCMA when the arbitration is commenced.

Singapore Chamber of Maritime Arbitration, Model Clauses, SCMA BIMCO Arbitration Clause (2013).(3rd
ed. October 2015).
Id 78, SCMA Arbitration Clause. (3rd ed. October 2015).
Id 78, SCMA Bunker Arbitration Clause. (3rded.October 2015).
Id 78, SCMA Arb-Med-Arb-Clause. (3rd ed. October 2015).
Id 78, Rule 4.3, Commencement of Arbitration. (3rd ed. October 2015).
Id 78, Rule 5, Response by Respondent.(3rd ed. October 2015).

Unless otherwise agreed the tribunal is of three arbitrators. Each party is to appoint one
arbitrator and the two arbitrators are to appoint a third84. The parties can agree a sole
arbitrator or any other number of arbitrators and also the procedure for appointment. If an
arbitrator to be appointed cannot be agreed upon after 14 days, one of the parties can apply to
the Chairman of SCMA to appoint an arbitrator85. If there are more than two parties in the
arbitration, the parties shall agree a procedure for appointing the tribunal with 21 days of the
service of the notice of arbitration and if the parties are unable to do so, the tribunal is
appointed by the Chairman of SCMA. The appointment fee of an arbitrator is SGD 500
payable to the arbitrator; if the Chairman of SCMA is required to appoint an arbitrator there
is an appointment service fee of S$750 per party is payable to SCMA before release of the
letter. If a full response is not received at time of release of the appointment letter, the party
applying for the appointment shall make the full payment of S$1,500 for release and seek
recovery of S$750 through their claims from the other party86.
Within seven days of its appointment, the tribunal shall inform the SCMA of its appointment
along with a brief nature of the dispute, without disclosing the parties’ names87. The purpose
of this is so the SCMA can keep statistics on arbitrations conducted under its Rules. Also the
SCMA is available to be contacted by a party or an arbitrator to assist informally to resolve
any inappropriate delays in the process of the arbitration or the publication of the Award. The
information to be supplied to the SCMA is published on its website, but at time of writing
consists of the following: date of commencement of arbitration, names of the arbitrators,
nationality of the parties, and the type of dispute and, if known, the approximate amount in

The Tribunal conducting arbitration shall be and remain at all times independent and
impartial. A prospective arbitrator is required to advise any party seeking to appoint him of
any circumstances likely to give rise to justifiable doubts as to impartiality or independence
and if nominated or appointed to disclose such circumstances to all parties.

The appointment of an arbitrator can be challenged if there are justifiable doubts as to

impartiality or independence or he does not possess the qualifications required by agreement
of the parties. The challenge must be made within 14 days from the appointment of the

Id 78, Rule, Appointment of Tribunal. (3rd ed. October 2015).
Id 78, Rule 6.2, (3rd ed. October 2015).
Id 78, Rule 6.4, (3rd ed. October 2015).
Id 78, Rule 6.7, (3rd ed. October 2015).

arbitrator or within 14 days after the circumstances on which the challenge is based become
known to the party challenging. If a party does not agree to the challenge or the arbitrator
does not withdraw, the party making the challenge can refer the matter to the Chairman of the
SCMA for his decision.

A court of competent jurisdiction may, on the application of a party, remove an arbitrator

who (i) is physically or mentally incapable of conducting the proceedings or where there are
justifiable doubts as to his ability to do so, or (ii) has refused or failed to use all reasonable
dispatch in conducting the arbitration or making an Award.

The SCMA Rules provide that the members of the Tribunal shall not be liable for any act or
omission in connection with the arbitration. This has been amended to remove the proviso
“unless the act of omission is shown to have been in bad faith” to follow the provisions in the
SIAC Rules.


The Tribunal has jurisdiction to rule on its own jurisdiction88. Under Singapore’s
International Arbitration Act, an aggrieved party can appeal to the Singapore High Court
within 30 days. The Tribunal may make an Award notwithstanding the failure of a party to
comply with the Rules or the Tribunal’s orders. The Tribunal has wide powers to permit
parties to amend claims and time limits, to order parties to produce documents or make
property available for inspection and samples to be taken. If the parties agree, the Tribunal
has power to join other parties to the arbitration. Where two or more arbitrations raised
common issues of fact or law, the respective Tribunals can direct the arbitrations to be heard
concurrently and give directions appropriate in the interests of fairness, economy and speed,
including admission of evidence given in one arbitration be admitted in the other. This can be
particularly important where there are claims up or down a chain of charters or commodity


After the establishment of The Indian Council of Arbitration for Maritime Disputes, the
institution is constantly working for the practice of maritime arbitration. It came in to
operation from 1st April 2016.The ICA includes arbitration proceeding, summary procedure
and supplementary provisions. It has 23 Articles. It also includes ICA code of Conduct as

Id 78, Rule 20,(3rd ed. October 2015).

well as Guidelines for Arbitrators and the Parties.The main objective of the council is to
govern the conduct for domestic and international maritime arbitration in India. The Act is
referred as the Maritime Arbitration Rules of the Indian Council of Arbitrators. It includes
Committee members which consist of:89
 Indian Council of Arbitration
 Ministry of Shipping
 Ministry of Law and Justice
 Indian National Ship-owners Association
 Shipping Corporation of India
 New Delhi Ship brokers Association
 Representative of P& I Correspondents (to be nominated by the President, ICA)
 Representative of Steamer Agents (to be nominated by the President ICA)

Moreover, Chairman of the Committee shall be the President or Senior Vice President or
Vice President of the Council and the Convenor of the Committee shall be the Registrar of
the Indian Council of Arbitration. The Committee shall meet as and when required but at
least once in a year.

The Functions of the Maritime Arbitration Committee includes:90

1. Empanelment of arbitrators;
2. Provision of guidance to arbitrators and parties in the general conduct of arbitration;
3. Determination of the scales of arbitrator's fee, registration fees and administration
charges from time to time;
4. Publication of arbitration awards;
5. In case of doubt, decide the applicability of these rules in relation to a dispute referred
to it;
6. Appointment of the Arbitrator / Presiding Arbitrator when required;

7. Review of the progress of Maritime Arbitration Cases;

The Scope of Application for Arbitration has been decided by the Act. Also, these rules shall
apply inter-alia to maritime disputes in respect of the disputes mentioned below:

The Maritime Arbitration Rules of the Indian Council of Arbitration, Article 3, Maritime Arbitration
Id 89, Article 4, Functions of Maritime Arbitration Committee.

1. Interpretation of charter party, any contract of affreightment and bills of lading
2. Carriage of goods by sea;
3. Marine salvage, towage of vessels or other floating objects
4. Damages arising out of collisions, groundings, fire or any such accidents whether in
port or at sea, including damage to fix or floating objects at ports;
5. Interpretation of any shipping documents;
6. Ownership of vessels and aspects relating to lines and mortgages
7. General Average, particular average and matters arising out of contracts of marine
8. Wreck removal and marine pollution
9. Disputes relating to use of ships in offshore, oilfield and/or seabed mining including
specialized vessels, rigs and platforms;
10. Disputes relating to ship building and repair contracts
11. Disputes relating to other matters connected with shipping and not mentioned above


Any party who is interested in solving the dispute through the arbitration process can take
initiative by writing a letter of request for arbitration to the Registrar of ICA. The letter of
request includes all the information of the parties such as names, full address, emails, phone
numbers, legal representative if any, etc. A copy of contract is to be submitted which includes
the arbitration clause. A separate claim letter is to be made which includes the issue of the
dispute along with the relief or the remedies. The name of Arbitrator, place of arbitration,
conduct of arbitration, etc needs to be mentioned. Non-refundable Registration fee of Rs.
15,000/- plus any applicable tax for claims up to Rs. One Crore and Rs. 30,000/- plus any
applicable tax for claims more than Rs. One Crore. In the event that the Claimant fails to
comply with either of the requirements referred to hereinabove, the Registrar may fix a time
limit (not exceeding 15 days) within which the Claimant must comply, failing which the file
shall be closed without prejudice to the Claimant's right to resubmit the same claims at a later
date in another notice of request for arbitration. The arbitral proceeding shall commence on
the date on which a request for that dispute to be referred to arbitration is received by the


Id 89, Article 8, Commencement of Arbitration.0

The claimant have to state the facts supporting their claim, raise the points at issues and relief
or remedy sought to the respondent within the time period stipulated by the parties or
determined by the arbitral tribunal and the respondent replies filing an answer against the
arbitration claim of claimant that specifies the relevant facts and available defenses to the
statement of claim.A party can amend or supplement his claim and defence throughout
arbitral proceedings, unless the tribunal considers it unsuitable to allow the amendment or
supplement in respect of the delay in making it.

The parties shall be given sufficient prior notice before any hearing and of any meeting of
arbitral tribunal for the inspection and verification of documents, goods and property. The
arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or
for oral argument, or whether the proceedings shall be conducted on the basis of documents
and other materials:
Arbitration and Conciliation (Amendment) Act, 2015 requires the arbitral tribunal at least,
hold oral hearings for the presentation of evidences or for oral arguments on a day-to-day
basis, and not grant adjournments unless reasonable cause is given.

All documents, statements and required information supplied, and application made to the
arbitral tribunal by the one party shall be communicated to the other party and any
evidentiary document or expert report on which an arbitral tribunal can rely in making it
decision shall also be communicated to the parties.


To make a maritime arbitration in India, besides the parties can choose Arbitration Rules of
ICA, they will be regulated and bound by any concerning international conventions that India
has entered and the arbitration law enacted by Indian government. In the range of maritime
arbitration, these legislations are also important components of India’s Maritime Arbitration
system, and they plays a vital role in assisting and guiding the parties to commence a
maritime arbitration in India.
There are several international conventions concerning maritime arbitration, such as the New
York Convention 195892, European Convention on International Commercial Arbitration

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.

1961, ICSID Convention 196593, and the Panama Convention 197594. There also exist some
international standard rules made by United Nation such as UNCITRAL Arbitration Rules
1976, UNCITRAL Model Law on International Commercial Arbitration 1985. It is notable
that these rules do not bind the parties unless they choose them as their arbitration rules.
These model rules are designed to assist states in reforming and modernizing their laws on
arbitral procedure so as to take into account the particular features and needs of international
commercial arbitration.
In terms of domestic legislation, there is currently no specific code of legislation for maritime
arbitration except the ICA Arbitration Rules. However, those special provisions for maritime
arbitration still can be found in other relative legislations. Arbitration Law, Civil Procedure
Law, Maritime Procedure Law and judicial opinions made by the Supreme Court of India
consist a systematic domestic legislation for regulating maritime arbitration.
Arbitration Law 1994 clearly has provided the basic principles of arbitration, arbitration
institution, arbitration agreement, arbitration supervision and other important issues. It has
fully reflected the general arbitration features like voluntary, independent and non-
governmental. However; there are still some issues in Arbitration Law that need to be
improved. These weak points include the excessively strict requirement of a valid arbitration
agreement; disallowing ad hoc arbitration; different treatments to the judicial supervision to
international arbitration and domestic arbitration, and so on. These are obviously not
conductive to India Maritime Arbitration.
There are sixteen articles in Maritime Procedure Law providing maritime arbitration and
arbitration concerning foreign affairs, and this is an important guide and protection for
maritime arbitration. The provision of property preservation before arbitration is enacted on
the base of international maritime custom. In addition, Civil Procedural Law and Arbitration
Law also have the provisions for property preservation in arbitration. However, these
provisions require the arbitration commission to submit an application to court with the prior
application from the parties. This kind of provisions is controversial with the developing
trend of maritime arbitration that the rights of arbitral tribunals should be strengthen and the
intervention by courts should lessen.


Convention on the Settlement of Investment Disputes between States and Nationals of Other State, also called
Washington Convention 1965.
Inter-American Convention on International Commercial Arbitration 1975.

Arbitrator is an essential part of the arbitral tribunal. Arbitrator, chosen by the parties, hears
case with his profession and discretion within the range of arbitration rules. Arbitrator plays a
decisive role for the impartiality and authority of arbitration award in the arbitration process.
India’s Arbitration Law provides that “members of an arbitration commission shall be
appointed from among the people who are fair and will serve justice. The Committee shall
maintain a Panel of Maritime Arbitrators who should have experience and reputation in
shipping and maritime practice, knowledge in maritime and shipping law and are persons of
integrity. The persons who have attained the age of more than 80 years will automatically
cease to be member of the Panel of Arbitrators. In case of a person, who has been appointed
as Arbitrator before attainment of the age of 80 years his panel membership will continue till
the pronouncement of the Award in pending arbitration matters referred to him.


The conciliation combined with arbitration is an important feature of ICA. It means arbitral
tribunal can promote the parties to reach a conciliation agreement according with the parties’
desire. An arbitration award can be made according with the conciliation agreement, and such
award can also be implemented by India’s Court the same as the normal one. According to
ICA Rules, in the process of maritime arbitration, on the basis of ascertain the essential facts,
with the application of one party, arbitral tribunal can with the assent of another party
mediate the case. Because this kind of conciliation is in process of arbitration, it can be also
called “conciliation in arbitration”. There are many advantages of such conciliation.

(1) More respect for party autonomy -

Conciliation is not a necessary procedure, but is under the premise of two parties consent.
The parties also can make contrary agreement like apply to withdraw the application for
arbitration. Even conciliation is unsuccessful, the statement by parties do not have any
validity for quotation.

(2) Efficient and economic -

Parties do not have to make a conciliation before submit the dispute to arbitration, which
means that conciliation is not a necessary process. If the conciliation is successful, arbitration
process will not be continued. If the conciliation is not successful, arbitration tribunal will

Id 89, Article 16, Optional Conciliation.

return to arbitration proceeding as soon as possible, and it won’t cause too much waste of
time. Meanwhile, no extra fee is paid.
(3) The possibility of success of conciliation is high -
Because the arbitrator has known the basic facts and clarified the legal issues before
conciliation, it is easier for arbitrator to act as a mediator to promote two parties’ conciliation.
Meanwhile, actually, most businessmen want to deal with disputes in a fast and amiable way.
It is proven that conciliation agreement is easier to be implemented because it is made by
consensus by both parties
(4) The settlement agreement is protected -
Simple settlement agreement is difficult to be implemented by People’s Court, but
conciliation agreement can be acknowledged and protected by People’s Court if arbitral
tribunal makes an arbitration award according with the content of settlement agreement. The
court can implement with such arbitration award directly without another extra litigation or
(5) Maintain friendly relations between two parties -
Conciliation in arbitration enables the parties to resolve the dispute amicably, which can
maintain friendly relation and cooperation.


India’s Maritime Arbitration has built up a complete regime through practice and
improvement. ICA has successfully resolved a number of domestic and international
maritime disputes. It is improving its status in the international community constantly, and
enjoying a certain reputation in the world.
However, India’s Maritime arbitration is still lagging in the world. Until now, the most
obvious problem in the practice of ICA is the number of cases. There is a big gap for the
number of annual accepted cases between India and other major international maritime
arbitration institution. According to a study, there are about thousand cases accepted and
heard by major maritime arbitration institutions in the world, but India can only deal with
only few of the total.



Disputes are common in almost every field. Similarly, it is present in every sphere. It is that
arbitration of disputes especially “institutional arbitration” that is becoming particularly
important for all the sectors where the dispute is involved. It has also gained its importance in
India. India has its own law in regards to arbitration.

Various sectors are characterized by their international transactions. The law in relation to it
or which are applicable to it varies from country to country and involve a high level of
specialization in the domain concerned. Also, confidentiality is important in every dispute.
One of the most popular ways to solve this dispute is by way of arbitration. It is supported by
various reasons which include less cost, less time duration, etc.

Along with this factors, another advantage includes attractive to disputants in general, in view
of which India enacted the Arbitration and Conciliation Act 1996, replacing the Arbitration
Act of 1940, to reduce the scope for court intervention in arbitral proceedings and awards and
to give a statutory backing to conciliation.

“Institutional arbitration” is a process of arbitration that is not “ad hoc” or decided arbitrators
chosen case-by-case by the parties to a dispute by mutual agreement or named by courts but
by arbitrators on the panel of institutions (like the Indian Council of Arbitration (ICA)) who
have been chosen for their in-depth knowledge of different fields, and have to follow norms,
including in relation to fees, set buy institution.

Justice V.S. Sirpurkar of the Madras High Court, who inaugurated the conference, appealed
to ICApublicize its code of conduct amongst disputants. He appealed to arbitration
professionals to offer their services to improve the efficacy of the Lok Adalat and mediation
systems through the Legal Aid Services Authority and deplored the negative attitude of bar
associations towards the amendments to the civil procedure code encouraging

V. Ramchandran, senior advocated said the personal value system of the arbitrator mattered
more than any code of conduct.

The Indian Council of Arbitration (ICA) is the leading arbitral institution in Delhi. It was
established in the year 1965. The ICA provides high class of infrastructure facilities for the
proceedings in relation the institutional arbitration. The ICA has also entered into mutual
cooperation agreements with various international permanent arbitral institutions including
International Chamber of Commerce (ICC), American Arbitration Association, etc.96
The ICA has also framed ICA Maritime Arbitration Rules for resolution of disputes.
Similarly, ICA has also formulated an ICA code of Conduct to be followed by the arbitration
committee, arbitrators, parties and their counsel. It has also issues a set of guidelines for
arbitrators and parties for speedy conduct of arbitration proceedings.


As mentioned above, after the enactment of the new law, Arbitration and Conciliation Act of
1996, various changes were made in the Act. Similarly the arbitration rules for various
spheres were made clear. In India, the rule for Maritime Arbitration also changes the scenario
of the arbitral proceeding. It was operated from 1st April 2016. It includes all the rules in
relation to maritime arbitration97. In this chapter, the researcher has tried to analyze the
functioning of Maritime Arbitration in India.

The main aim behind the Arbitration proceeding include the solving of dispute without
judicial intervention. It also is an money saving way of solving dispute. According to the Act,
the objective behind The Maritime Arbitration Rules includes,

“These rues shall be called Maritime Arbitration Rules of the Indian Council of
Arbitration. These Rules shall govern the conduct for domestic and international maritime
arbitrations in India.98”

The rules include the procedure which needs to be followed in order to accomplish the
arbitration proceeding both at domestic as well as at international level.


Indian Council of Arbitration, ̸ about-us.html.
The Maritime Arbitration Rules of The Indian Council of Arbitration, (July 1, 2018), available at
The Maritime Arbitration Rules of The Indian Council of Arbitration, (July 1, 2018) available

All parties desirous of making reference for maritime arbitration under these Rules may
provide following arbitration Clause in their contracts:
"All disputes arising under this charter party shall be settled in India in accordance with the
provisions of the Arbitration & Conciliation Act, 1996 (No. 26 of 1996), as amended and in
force from time to time, and under the Maritime Arbitration Rules of the Indian Council of
Arbitration. The Arbitrators shall be appointed from among the Maritime Panel of Arbitrators
of the Indian Council of Arbitration99".

Notwithstanding the aforesaid it is open to parties, to make a reference to the Registrar

by any other suitable provision in the contract, or by mutual consent or agreement for
arbitration under these Rules.


With a view to make arbitration efficient, simple, just, user friendly, speedy, trust worthy,
equitable, serviceable and relatively low cost, this Code aims to establish a set of standards
for Maritime Arbitration Committee, Arbitrators, Parties and Counsel and they are expected
to conform to such standards while discharging their respective duties under the auspices of
the Indian Council of Arbitration100. This Code has been formulated in the wake of the
fundamental principle that only an arbitral institution can guarantee the enforcement of such
ethical norms, which is required at various stages of arbitration right from the appointment of
an arbitrator till the rendering of an arbitration award. However, ad hoc arbitration can, as a
self-regulatory measure, adopt this code of conduct to generate confidence in the institution
of arbitration in general. As this code evolves over the years, it would be a continuing
objective to revise and update it from time to time to keep pace with international standards


India is a signatory to the Convention on the Recognition and Enforcement of Foreign
Arbitral Awards, 1958 (New York Convention) as well as the Geneva Convention on the
Execution of Foreign Arbitral Awards 1927 (Geneva Convention). If a party receives a
binding award from a country which is signatory to the New York Convention or the Geneva
Convention and the award is made in a territory which has been notified as a convention
country by India, the award would then be enforceable in India.

The Maritime Arbitration Rules of The Indian Council of Arbitration, Article 23, Maritime Arbitration Clause.
The Maritime Arbitration Rules of The Indian Council of Arbitration ICA Code of Conduct, (July 1, 2018)
available at

Initially, the enforcement of award in India is a 2 stage process which is initiated by filing an
execution petition. A court would then determine whether the award holds to the
requirements of the Act. Once the award is found to be enforceable it may enforced like a
decree of that court. However at this stage parties would have to be mindful of the various
challenges that may arise such as frivolous objections taken by the opposite party and the
requirements such as filing original authenticated copy of the award and the underlying
agreement before the court.

Foreign Award

Application for Setting aside in the

foreign curial court Appeal

Enforcement of Award as a decree -



As far as the enforcement of foreign award is concerned, the Delhi High Court in Naval Gent
Maritime Ltd v Shivanath Harnarain (I) Ltd.101 , the Execution Petitioner/Decree holder filed
the petition for the enforcement of foreign award of foreign award dated 22.1.2001 under Part
II Chapter I of the Arbitration and Conciliation Act 1996 102. Along with it, he also filed the
related documents. According to the facts, the Respondent is an Indian company whose assets
are entirely located in India. The proceedings were initiated in England. There was a charter
party agreement between the parties and there was no controversy in relation to the award.
The main issue was regarding its enforceability in India. The learned Counsel said (that the

Naval Gent Maritime Limited v ShivnathRaiHarnarain (I) (2009) 174 DLT 391.
The Arbitration and Conciliation Act,1996, Part II Chapter IEnforcement of Certain Foreign Awards, New
York Convention Award.

award cannot be enforce in India as could be enforce by leave of England as per Section
48(1)(e) of the Arbitration and Conciliation Act 1996103.

Issue was whether foreign award sought to be enforced in India u/s 48104 has become binding
has to determine in accordance with the laws of the country where it was made. Hence court
can refuse to enforce the foreign award if it is has not become binding. It was against public
policy and was not enforceable. The owner threatened the respondent that if he did not add
the addendum then they would exercise the lien over the cargo. This threat created breach of
contract. It was null and void. Arbitrator observed this but still favored the owner resulted
against the public policy.

Part 2 of the Act deals with the awards. Even defined in the New York Convention in Chapter
I Section 44105 defines foreign award.

When an award is given between the parties outside India, the validity of award can be
challenged in that country. If the award is challenged in that country and it is set aside, the
award cannot be set out in India as Foreign Award. However, if it is not, challenged in that
country of origin and is allowed to stand and become final in the country of origin, the award
can be set out in India as foreign award. Once set out in India, Its enforceability is as per the
laws of India. Section 46 deals with this provision. Same issues of enforceability of award
has been dealt in Madras High Court in Comapania Naviera SODNOC Greece v Bharat
Refineries Ltd106

It was concluded that the award is not binding so that it can be considered for the
enforceability in India. Also it is settled that a foreign award can be enforced or executed in
the same proceedings was held by Supreme court as it was also mentioned in Forest day
Lawson Ltd v Jindal Exports Ltd 107 which was decided by the Supreme Court.


Award may be refused at the request of the party against whom it is invoked only if that party furnishes to the
court the proof that parties or has been set aside or suspended by a competent authority of the country in which
or under the law of which the award was made.
The provision of the Act shall not apply to any reference pending as the commencement of this Act to which
the law in force immediately before the commencement of this Act shall, notwithstanding any repeal effected by
this Act, continue to apply.
Id 102, Section 44, Definition.
CompaniaNaviera SODNOC Greece V Bharat refineries Ltd (2008) O.P No. 388 of 2005.
Fuerst Day Lawson Ltd v Jindal Exports Ltd (2001) 6 S.C.C. 356 (India)

An arbitration agreement is collateral to the substantial stipulation of the contract. It is merely
procedural and ancillary to the contract and it is a mode of settling the disputes, though the
agreement to do so is itself subject to the discretion of the court. It is distinguishable from
other clauses in the contract. It embodies an agreement of both parties with consensus ad
idem that if any dispute arises with regard to the obligations undertaken therein which one
party has undertaken towards the other, such a dispute shall be settled by a tribunal of their
own constitution3. It is the procedural machinery which is activated when disputes arise
between parties regarding their rights and liabilities
Valid Agreement plays an important role in any kind of dispute as well as complications that
could arise in future. Section 7 of The Indian Council of Arbitration108deals with the attribute
of an arbitration agreement.

1. The arbitration agreement must contemplate that the decision of the tribunal will be
binding on the parties to the agreement.
2. The jurisdiction of the tribunal to decide the rights of the parties must derive from
their consent, or from an order of the Court or from a statute, the terms of which make
it clear that the process is to be arbitration.
3. The agreement must contemplate that substantive rights of the parties will be
determined by the agreed tribunal.
4. The tribunal will determine the rights of the parties in an impartial and judicial
manner with the tribunal being fair and equal to both sides.
5. The agreement of the parties to refer their disputes to the decision of the tribunal must
be intended to be enforceable in law
6. The agreement must contemplate that the tribunal will make a decision upon a dispute
which is already formulated at the time when a reference is made to the tribunal.

Other important factors include whether the agreement contemplates that that tribunal will
receive evidence from both sides and give the parties opportunity to put forth their issues and
hear their contentions; whether the wording of the agreement is consistent with the view that
the process was intended to be an arbitration; and whether the agreement requires the tribunal
to decide the dispute according to law.

Indian Council of Arbitration, Section 7, Attribute of an arbitration agreement.

In Shakti Bhog Foods Limited vs Kola Shipping Limited109 Petitioner is in exporting business
who deals with the Government of Niger. Petitioner was looking for ship and Respondent
contacted him. Petitioner told Respondent that they will be in the business only if the
Government of Niger came through. He informed Respondent about it. But his business
transaction was cancelled with the Government of Niger. Instead he offered the Respondent
to export the goods to Columbia. There was no Arbitration Agreement between the parties.
Similarly there was no signing about the Condition Precedent. But the Respondent maintains
that there was a Condition Precedent agreement between them. The exchange of signature on
condition precedent was done through e-mails. In the previous preceding the issue of
Condition Precedent was been raised but was nullified by the court. According to the
respondent, there was exchange of Condition Precedent between both the parties. Respondent
was relied upon the Arbitration clause of the said agreement. The procedures were followed
in accordance with it. Arbitrator was appointed. The documents were presented in accordance
with it. It was cleared that there was a charter party agreement as per Section 45 110. There
were transactions through emails which also included the signature on condition precedent.
So the Court shall refer the parties to the arbitration. In the present case the agreement was
null and void. Reference was given of Section 30 which talks about the settlement and
Section 31 which talks about the forms and contents of arbitral awards. It was concluded that
the agreement was properly constituted.

While contending against the filing of an application under Section 9 of the Act for interim
measures by the respondent. Appellant never raised any objection as to the existence of the
Charter Party Agreement between the parties. As per the provisions of the Section 45 of the
Act, at the request of one of the parties or any person claiming through or under him the court
shall refer the parties to arbitration unless it finds that the said agreement is null and void,
inoperative or incapable of being performed. In the present case, there appears to be no such
thing to say that the so called agreement entered into by the parties is in any way to be termed

Shakti Bhog Foods Ltd. V Kola Shipping Ltd. Civil Appeal No. 5796 of 2008 (India)

Id 102, Section 8, Power of the judicial authority to refer the parties to arbitration. At the request of one of the
parties or any person claiming through or under him, the court shall refer the parties to arbitration unless the said
agreement is null and void.
Id 102, Section 7, the existence of an arbitration agreement can be inferred from a document signed by the
parties, or an exchange of letters, telex, telegrams or other means of telecommunication providing a record of
the agreement.

as null and void or inoperative or incapable of being performed. There was a charter party
agreement existing between the parties and, that as per the provisions of Section 45 of the
Act, High Court as well as the trial court were fully justified in allowing the application
preferred by the Respondent and accordingly, the impugned order must be affirmed.


“Once an Arbitral award is set aside by a court of law, the parties can initiate fresh
arbitration on the same cause of action.” – Delhi High Court

On 28th of March 2016, the Division Bench of Delhi High Court while disposing of Steel
Authority of India limited Vs Indian Council of Arbitration, held as follows:

 If an arbitral award is set aside by the Court under a proceeding u ̸ s.34 of the Act112,

the parties can invoke the same arbitration clause and proceed with a fresh arbitration.

 The Court while exercising powers under S.34(4) of the Arbitration & Conciliation

Act,1996113 has the power to remand the matter for fresh consideration to the same

Agreement was between GE shipping and SAIL. Dispute arose in relation to charter party
that led GE shipping invoke ADR mechanism of Arbitration in terms of Charter Party.
Claims were made by GE shipping but were rejected. A writ Petition was filed in the High
Court of Delhi, by the SAIL seeking to set aside the order passed by Indian Council of
Arbitration. The said appointment arose since the earlier arbitral award passed by an
arbitrator was set aside, by the High Court under a proceeding filed by the Losing party,
SAIL under S.34 of the Act seeking to set aside the award. The appointment of a new
arbitrator was appointed by the arbitral Institution as per the provisions of the arbitration
clause. The Single Bench of the High Court dismissed the Writ Petition. SAIL choose to file
an appeal before the Division Bench of the Delhi High Court. The Division Bench of the
High Court consisting of Justice Mrs. G Rohini and Justice Mr. V.P. Vaish dismissed the
above said Writ Appeal holding that the above stated points are the correct law.

Id 102, Section 31Application for setting aside Arbitral award.
Id 102, Section 34(4),On the receipt of application for setting aside of arbitral award, the Court may, where it
is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in
order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action
as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

Similarly in Watersweet Limited and Anr.v The Fertilisers and Chemicals and
Ors.114objection was filed against award under Section 34(2) of Act115 - Petitioners contended
that clause of agreement should be read in a manner wherein the word 'assist' in respect of
settlement of claims of petitioners by supplier, must be construed to imply that respondent is
liable to petitioners and seller would in turn be liable to respondent - Held, contract between
parties itself envisages absence of liability of respondent and responsibility on petitioners to
settle matter with seller - Petitioners were not remediless but had to invoke its remedy against
seller and not against respondent - Contract between respondent and seller envisaged that in
case of delay and demurrage arising at port of loading, seller was bound under contract with
respondent to settle claim with purchaser - Charter party agreement in turn has made said
provisions - Therefore it is in pursuance of contract that seller has conferred rights on
respondent to enter into a charter party agreement with a vessel owner where seller would be
responsible to settle claim with vessel owner - Therefore petitioners were not remediless for
grievance - In case petitioner were to initiate any proceeding against seller in accordance with
law, respondent would be duty-bound under contract to render assistance for recovery of such
dues of petitioners - Hence, petition dismissed.


The Arbitration and Conciliation (Amendment) Act, 2015 grants the liberty to the parties to
appoint an arbitrator mutually.
The Act provides that the parties are free to determine the number of arbitrators, provided
that such number shall not be an even number. However, if the parties fail to do so, the
arbitral tribunal shall consist of a sole arbitrator.1
The procedure in relation to appointment of arbitrator(s) is provided under Section 11 of the
Act116. A person of any nationality may be an arbitrator, unless otherwise agreed by the
parties. The aforesaid section also deals with the contingency wherein the parties fail to
appoint an arbitrator mutually. In such a situation, the appointment shall be made, upon
request of a party, by the Supreme Court or any person or institution designated by such
Court, in the case of an International Commercial arbitration or by High Court or any person
or institution designated by such Court, in case of a domestic arbitration.
Before the appointment of arbitrator is made, the concerned Court or the person or institution
designated by such Court is required to seek a disclosure in writing from the prospective

Watersweet Ltd v The Fertilisers and Chemicals,OMP No. 344 of 2005 (India).
Id 102, Section 34 (2),Power of the Court to set aside the Arbitral Award.
Id 102, Section 11, Appointment of Arbitrator.

arbitrator in terms of Section 12(1) of the Act and also give due regard to any qualifications
required for the arbitrator by the agreement of the parties and the contents of the disclosure
and other considerations as are likely to secure the appointment of an independent and
impartial arbitrator.
It may be noted that under Section 12(1) of the Act117, an obligation has been cast upon the
prospective arbitrator to make an express disclosure on
(a) circumstances which are likely to give rise to justifiable doubts regarding his
independence or impartiality; or
(b) grounds which may affect his ability to complete the arbitration within 12 (twelve)
The purpose of this provision is to secure the appointment of an unbiased and impartial
Fifth Schedule to the Act (Annexure-A)118 contains a list of grounds giving rise to justifiable
doubts as to the independence or impartiality of an arbitrator. The Seventh Schedule
(Annexure-B) lays the grounds which make a person ineligible to be appointed as an

The Act provides that in an International Commercial Arbitration, an arbitrator of a

nationality other than the nationalities of the parties may be appointed where the parties
belong to different nationalities.

Expeditious disposal of application for appointment of an arbitrator(s) is emphasized by the

Act and an endeavour shall be made to dispose of the matter within a period of sixty days
from the date of service of notice on the opposite party.

In Southern petrochemical v The Great Eastern Shipping Company , a petition was filed
u/s 34 of the Arbitration and Conciliation Act to assail the arbitral award. Dispute arose
between the parties about the calculation and payment of discharge port demurrage. The
respondent invoked the arbitration agreement between the parties contained in Clause 51 of
the charter Party and nominated an Arbitrator. According to the Petitioner the invocation of
the arbitration by the respondent was not in accordance with the arbitration agreement and

Id 102, Section 12(1), When a person is approached in connection with his possible appointment as an
arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his
independence or impartiality.
Id 102, Annexure A,Grounds for removal of Arbitrators.
Southern Petrochemical v The Great Eastern Shipping Company, O.M.P. 482/2010 (India).

consequently the claim of the respondent was barred by limitation .In this regard he places
regards on clause 51 of the charter party which contains the arbitration agreement. The said
clause provides that the disputes arising under the charter party shall be settled under the
provision of the Arbitration Act under the Maritime Arbitration Rules of the Indian Council
of Arbitration each party appointing an arbitrator from out of the maritime panel of arbitrators
and 2 arbitrators in the event of disagreement, appoint an umpire whose decision shall be
final and binding on both the parties.


A bill of lading serves as an evidence for a contract of affreightment. This usually arises
when a ship owner or other person authorized to act on his behalf employs his vessels as a
general ship by advertising that he is willing to accept cargo from people for a particular
In The Owners & Parties v State of Trading Corporation, the appellants were the owners and
the respondent was the chartered of the ship under the Time Charter Party Agreement. There
were 5 Bills of Lading issued by the appellants herein the respondent agreed and undertook to
carry on board the said ship. The Respondent filed Admiralty suit in the High court of
Calcutta in its admiralty jurisdiction against the appellants alleging that the defendant
breached the contract and also failed to deliver goods in good condition. Due to which the
Respondent has suffered loss. The appellants and respondent in the suit filed an application
under Section 45 of the Arbitration and Conciliation Act, 1996120 praying inter alia for
staying of the proceedings in the suit and for referring the disputes to arbitration in terms of
Clause 62 of the Charter Party Agreement which was specifically incorporated as a condition
of the Bills of Lading. The question that arises for determination is, whether the High Court,
on construction of the terms and conditions of the Charter Party Agreement and the condition
in the Bills of Lading incorporating the terms and conditions of the Charter Party Agreement
into it was right, in holding that the parties in the suit are not bound by the agreement
contained in the Charter Party Agreement for purpose of arbitration of the disputes raised in
the suit.

Id 102, Section 45,Power of judicial authority to refer the parties to arbitration.



The led back phenomenon in India’s Maritime Arbitration is caused by several reasons. It
includes challenges from LMAA, challenge from India’s Maritime Arbitration, lacking
enough attention by relevant authorities, imperfect legislation. The researcher in the
following chapter has discussed the problem in India’s Maritime Arbitration regime. The
researcher has given reasonable suggestions with the considerations of the development trend
mentioned in the previous chapters.

Indian Maritime Arbitration is an emerging concept in the present era. Unlike other
International Arbitral Institutions like the London Maritime Arbitration, Society of Maritime
Arbitration or the Singapore Maritime Arbitration, Indian Maritime Arbitration has not
gained that much popularity on the International level.

In this era of Globalization, every nation is trying to develop in all the fields. All countries
are trying to maintain relationship with one another. Law is dynamic in nature and needs to
be molded as per the changes in the society.

Maritime disputes have rocked the oceans and countries over the decades. There are various
disasters that cause great damage. If the dispute is within the countries, the matter is solved as
per the laws and rules of that country. But when there is involvement of countries, the
situation becomes worst. At that time, arbitration proves to be a great mechanism in solving
the dispute. This has even led to a topic of discussion and debate on “Resolving Disputes
through Arbitration.” by various expert and committees in the maritime industry121.

According to Dr Vishwapati Trivedi, Secretary, Ministry of Shipping, who also released the
ICA’s “Rules of International Arbitration” in Mumbai during the conference 122, said that one
needs to lead an outburst against all sorts of delays in settling these kinds of disputes. When
the Arbitration in India is concerned, the high costs and delay in this regard are so much that
sometimes it feels that the cost is very high and one is scared to go for arbitration.
Institutional Arbitration is probably the best way to go as cases suffer due to delay, loss of
cargo, etc besides correct decisions taken with full of honesty and diligence often being
challenged in court. In some cases there is involvement of the government. Hence,
Arbitration is the only way out and a very good idea. Similarly, India needs to have ample
number of arbitration center as well.

Various other points in relation to arbitration have also been discussed. There needs to be a
self-disciplined working. There must be some hard hitting law that arbitration should be non-
appealable unless very necessary. There should be some kind of buffer for the judiciary to act
upon the maritime arbitration. The Indian Bilateral Trade Agreement is so expensive
andamenable to misuse. One such contract failed and the original company has taken the

Dominick Rodrigues, Better Maritime Arbitration must for 8% growth,(July 2 2018),available
SIAC, (July 2, 2018) available at

Government up in the international courts. Much of the amount is append on deciding the
arbitrator and the venue of the arbitration. Most of the port contracts have a standard
reference but the mechanism should be there in accordance with it.

Speaking in the Conference held in Mumbai, N.G. Khaitan, President, Indian Council of
Arbitration (ICA) said that that was the first conference that happened in Mumbai in relation
to Maritime Arbitration123. But he raised a question in regards to the position of Indian
Maritime Arbitration in the rest of the world. He pointed out that there are 1200 institutions
in the world. With the world’s 40 % population in China and India -besides 60% global
population in Asia itself - trade is shifting.

India is still very poor as far as shipping is concerned. In the USA, 90% of shipping disputes
are resolved through arbitration. In the present era, India is a global player where 30% of
domestic business comes from abroad. Our court is lately appreciating arbitration as it helps
to promote trade and commerce. Our Arbitration fees are cheapest in the world. Majority of
the disputes are solved either by litigation or by conciliation. But if the rules are strong, them
there is no reason why arbitration will not succeed. Arbitration in India is prohibitive and
time consuming. The Law Commission states that arbitration fees should not exceed Rs 30
lakh (thus capping these fees) and that the award must be given in two years’ time limit. But
the main issue is how to make India the hub of international arbitration, as our lawyers,
judges are “cited” in judgments around the world.

Deepak Shetty, Joint Director-General, Directorate of Shipping, Ministry of Shipping, said

India’s legal system is choked and there is a crying need for reforms. “With India being one
of the “litigist” countries in the world, there is a need to tap into alternate solutions in this
regard and arbitration is the best solution. The law commission has proposed that a
mechanism of institutional arbitration should be encouraged before knocking on the doors of
the judiciary124.

Commenting on Shetty’s observations, Khaitan said “There is a need for relook into
legislations and the government has recommended 270 acts to be scrapped. Today there is
new sense of confidence where we start speaking and things will happen.

Since the dawn of humanity, the sea has been a source of sustenance, providing food and
avenues of trade where earliest civilizations used it as an avenue to search for wealth in the
form of spices, minerals and other natural resources. This search resulted in the establishment
of the maritime industry whose long history is dotted with both success and disputes. In the
maritime industry, arbitration has served as a common tool for the settlement of disputes for
several decades.
Presently, the shipping industry is no longer made up of a small number of people or
concentrated in one country and this result in a loss of the close personal contact that
facilitated arbitration in the past. These changes in the shipping industry led to the immediate

Ibid 122.
Ibid 122.

consultation of lawyers as a necessity when problems arise, and the continued presence of
lawyers through the resolution of those problems. Despite any changes, maritime arbitration
remains a popular way to resolve maritime disputes that arise, in part because of the often-
lower costs involved and the ability to mould the process to the needs of the parties involved.
Charter parties facilitate world trade, have a broad international scope and are numerous –
making them remarkable contracts. They are also a major source of maritime arbitration.

With Malaysia introducing its Fast Track Rules, 2010, arbitrators feel there is urgent need to
promote Fast Track Arbitration (FTA) in India. The Indian judiciary also realized the
importance of FTA as an expedient, economical and efficient means of dispute resolution. In
fact, the Supreme Court observed in one case that “Litigation in courts can be compared to an
overcrowded old bus, arbitration to a new car and FTA to an aeroplane charging nominal
fare.” However, while the Indian arbitral awards match the best quality in the world, India
lags behind in respect to time and cost, cumbersome procedures – thus eclipsing its potential
to become a preferred venue for commercial arbitration.


There needs a lot of change in the present Indian Maritime Arbitration System. These
changes are very much necessary as India is still not at a position to reflect its work at the
international level. Some of the changes that help in changing the scenario can be mentioned
as follows:

1. Widening the scope of Arbitration Agreement –

It is too strict for Arbitration Law to require the precise name of arbitration institution in
arbitration agreement or clause. In practice, India’s judicial institutions have admitted a vague
expression of arbitration institution. It still leaves some possible controversies for scholars
and parties of disputes. When practice doesn’t correspond with the legislation, it means the
practice is wrong or the legislation should be amended. Consideringthe custom of widening
interpretation by UK, India may amend this provision nexttime. To widen the interpretation
of the arbitration agreement or clause shows more respect of the parties ‘autonomy. When
Arbitration in India is agreed by both parties, it is obvious that the parties would like to
choose arbitration as their resolution method.If this arbitration agreement or clause is
regarded as invalid, it will be a big frustrationto parties’ autonomy. Therefore, to amend the
legislation to fit with the practice is requirednecessarily.

2. Professional training
There are some disputes that require an arbitrator to have a working knowledge of the sector
concerned. It is common in shipping and construction arbitrations for the parties to appoint
arbitrators who have first-hand expertise in those fields.

It is easier to understand the parties and resolve a dispute if the arbitrator is well-versed with
the knowledge and expertise in a particular business sector or industry. Therefore, creating
specialized arbitral institutions along similar lines as that of the London Maritime Arbitrators
Association (LMAA) should also be considered. Non-governmental bodies need to step up
their efforts to help reinforce the government’s reform agenda.

3. Promoting Maritime Arbitration India

It is effective for promoting India’s maritime arbitration to use and promote India’s Maritime
Arbitration Clause. In practice, especially in voyage charter party, the parties usually sign one
piece of paper by fax that is called voyage charter party confirmation. In such confirmation,
the wording is very brief and abbreviations are extensively used. Only key provisions are set
out, and the other provisions are invoked from the standard contract. Without the
consideration of history, the main reason for London to be the world maritime arbitration
center is because that the British Government has been paying a great attention in promoting
maritime arbitration in international shipping field including active participating in world
maritime conferences by assembled delegations, and recommending London Maritime
Arbitration clause. UK Protection and Indemnity Club (P&I Club) also have every effort to
promote British Maritime Arbitration, they require the members use the London Arbitration
Clause in relevant shipping contacts.. For dealing the common situation that the Indian
parties generally neglect the importance of arbitration clause in shipping contracts, the Indian
government and relevant industry associations have responsibilities to review all types of
extant shipping contracts and thereafter to recommend the corresponding India’s arbitration
standard arbitration contracts. In addition, Indian maritime lawyers should also do efforts in
the promotion of Indian maritime arbitration. Actually, they are supposed to strive for the
advantages in arbitration place for their parties in contract negotiation. Therefore, they should
introduce the India’s Arbitration Clause to clients and draft shipping contracts with such
arbitration clause. To promote the universal application of India’s Arbitration Clause, Indian
government, relevant associations and Lawyers all play an essential role, and their vigorous
efforts will certainly change the present status of Indian Maritime Arbitration in the recent
4. Promoting and developing Institutional Maritime Arbitration -
Institutional arbitration refers to ‘the administration of arbitration by an institution in
accordance with its rules of procedure’. The institution provides appointment of arbitrators,
case management services including oversight of the arbitral process, venues for
holdinghearings, etc. A large number of well-known and internationally recognized

institutional arbitration centers such as the International Chamber of Commerce, the London
Court of International Arbitration and the Permanent Court of Arbitration have opened
centers in India. Presently there are over 35 arbitral institutions in India, which are domestic,
international arbitral institutions, arbitration facilities by PSUs, trade and merchant
associations, and city-specific chambers of commerce and industry. Many have their own
rules and some follow the arbitration rules of the UNCITRAL
In an Institutional Arbitration, the arbitration agreement designates an arbitral institution to
administer the arbitration. The parties then submit their disputes to the institution that
intervenes and administers the arbitral process as provided by the rules of that institution. The
institution does not arbitrate the dispute. It is the arbitral panel which arbitrates the dispute.

India is in dire need to promote and develop the Institutional Maritime Arbitration. Though
the ICA has issued some guidelines regarding Indian Maritime Arbitration, the laws in
relations to Maritime Arbitration are still not much cleared. This institution will help in
resolving various confusion as well as complexities which will help in solving the dispute

5. Awareness Generation
Strengthening of arbitration in the country would have to be coupled with promoting
arbitration as a mode for dispute resolution. This would include preventing tendency of
private players to rush to the courts without resorting to the relevant provisions of arbitration
in the contract whereby the commencement/continuation of the work was stalled. This can be
done through creatingawareness as to better understanding of commercial matters and an eco-
system wherein the awards were passed by neutral umpires to ensure that it is a win-win
situation for all the stake holders leaving a limited scope of the award being challenged under
Section 34 of the Arbitration Act, 1996.

Since twenty century, with the fast development of international trade and shipping industry,
maritime arbitration has shown the new development trend. Respecting the parties autonomy,
raising the efficiency, limiting the interference by court have become the same goal for most
countries in the maritime arbitration industry. It can be concluded that, with the hardworking
by practitioners of international shipping industry and maritime law, a culture of maritime
arbitration is gradually generated.

It cannot be denied that although India has developed its maritime arbitration for several
decades, the situation is still not as good as expected, which is not correspondent with its
image of large maritime country. Some practicable ideas should be raised by Indian lawyers
or practitioners in shipping industry to change the present situation and enhance the influence
of India’s Maritime Arbitration. It is undoubted that it will be a long and hard period for
Indian lawyers and shipping practitioners to improve India’s maritime arbitration. Indian
Arbitration should learn more from LMAA that participates in different kinds of conferences
actively, and voluntarily gives advices for drafting standard form contract. It should continue
to strengthen the bond with different countries and different non-governmental institutions
for promoting the development of the world maritime arbitration.




 Arbitration & Conciliation Act 1996

 Maritime Arbitration Rules of Society Maritime Arbitration Rules
 The Maritime Arbitration Rules of the Indian Council of Arbitration
 The US Arbitration Act 1925
 United States Code


 Convention on the Settlement of Investment Disputes between States and Nationals of

Other States
 Inter-American Convention on International Commercial Arbitration 1975
 The New York Convention on the Recognition and Enforcement of Foreign Awards
 The UNCITRAL Model Law on International Commercial Arbitration (1985)
 United Nations Conventions on the Carriage of Goods by Sea (UNCOGSA)



 H.K.Saharay&Salil K Chaudhary, Law of Arbitration and Conciliation (3rd. ed. 2001)

 Halbury’sLawsofEngland, Butterworths Publication London (4th. Ed. 1991)

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 RachelLousie Carson, The Sea Around Us, Oxford university Press (1989)
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 Ronald Bernstein& Derek Wood, Arbitration International(3rd ed. 1999).

 William Tetley, Mixed Jurisdictions: Common Law v. Civil Law (Codified
&Uncodified) (2008)
 William Tetley, The General Maritime Law- The LexMaritima, (1994)


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 Michael Marks Cohen, A New Yorker Looks at London Maritime Arbitration, 1986
Lloyd’s Mar. & Com. L.Q. (2014).
 Patric Martin, Why is Arbitration Getting Much Too Legalistic? Can the Old Method
be revived?, 8th International Maritime Arbitration. (1987).

 Richard S. Sommer, Maritime Arbitration - Some of the Legal Aspects, 49 Tul. L.

Rev. (1974-1975).
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 William Tetley, The General Maritime Law-The Lex Maritima20Syrcuse J. Int’L&
Com. (1994).


 Bruce Harris, Maritime Arbitration in the U.S and the U.K, Past, Present and Future:
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 EddaFrankot, Medieval Maritime Law from Oleron to Wisby: Jurisdictions in the Law
of the Sea, (June 28, 2018) available at
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 London Maritime Arbitrators Association, available at “Guidelines for Full
 Marco Gregori, Maritime Arbitration Among Past, Present and Future, (June 27,
2018), available at

 NoussiaKyriaki, The History, Importance and Modern use of Arbitration, (May 30,
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 The London Maritime Arbitrators Association, available at