What are the benefits of opting for arbitration with the LMAA?
Generally as above, particularly the number of experienced maritime arbitrators and the maritime law experience of Commercial Court judges.
Specifically in the maritime field, the availability of a right of appeal to the Commercial Court from arbitration awards on points of law. This is available almost nowhere else and is generally welcomed by the international maritime community (if not others, for example in engineering or construction cases, who often exclude the right of appeal by choice.)
How flexible is the arbitration process in adapting to each case?
Arbitrators have the right and duty under the English Arbitration Act 1996 to devise procedures suitable to the case. They are not bound by the more rigid rules applicable in the Commercial Court, for example regarding evidence and disclosure of documents. Nevertheless the LMAA Terms and Procedures set out procedural guidelines. These are flexible and are regularly updated.
What does an LMAA panel look like and what criteria are used for its formation?
It is up to the parties to decide if they want a panel of three arbitrators or if they can agree on a sole arbitrator. 80 percent of cases are decided on documents only without a hearing and if the two party-appointed arbitrators can agree on the result, it is not necessary under the LMAA Terms to appoint a third.
In many cases the arbitrators appointed will be members of the LMAA (full or aspiring) but, in general, there is no restriction on whom the parties may appoint. Sometimes though there will be qualifications built into the arbitration agreement such that the arbitrators appointed must be members of the Baltic Exchange or “commercial men or women” or “regularly involved in shipping operations.”
Please describe the types of arbitration and what factors determine which one is used in each case:
The LMAA has three principal sets of procedural terms. The
choice of which one will apply will normally depend on the amount in dispute (including the amount of a counterclaim). The Small Claims Procedure which mandates a sole arbitrator and eliminates the right of appeal is particularly popular for claims of up to $100,000.
For larger claims, over say $400,000 the main LMAA Terms provide that there will normally be three arbitrators and make provision for more formal submissions and evidence, and possibly an oral hearing. The Intermediate Claims Procedure sits in the middle and is generally considered suitable for claims of between $100,000 and $400,000.
What are the elements of an arbitration agreement?
An arbitration agreement is normally included in the body of the main contract but may be considered separately if there is an issue as to whether the main contract is itself valid (for example because of fraud or some other illegality). The arbitration agreement should ideally provide for the number of arbitrators and how they are to be appointed and
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