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• The Intermediate Procedure. • An arbitration under the LMAA Rules which does not fall into either the Small Claims Procedure or the Intermediate Procedure.


For the Small Claims Procedure, the parties


must expressly agree to this procedure in their contract document, unless they decide to follow it voluntarily by agreement. 1. It is used for claims under US$100,000 or such other sum as the parties may agree.


2. The parties agree on a single arbitrator. If they cannot agree the, LMAA will appoint an arbitrator.


The advantages of opting for arbitration


The following article has been provided by BIFA Associate member LA Marine Solicitors. It should be read in conjunction with the article on page 16 about Arbitration and the BIFA STC


Arbitration is used by shipping and logistics companies worldwide to have their disputes resolved. Aside from having the advantage of being a private and confidential process, it is often less adversarial than court proceedings. One of the greatest benefits though is that an


arbitration is easy to start and arbitration awards can be enforced relatively easily in many parts of the world. Court cases, on the other hand, are often not a private affair. There can be obstacles to serving legal proceedings issued in one country on a defendant in another country, and some considerable challenges in trying to enforce a court order, issued by a court in one country, on a company in another country. Across the globe, many countries have their


own designated arbitration services and there is a considerable range of options open to companies in the choice of arbitration forums. In the UK, there are many specialised


arbitration bodies that deal with particular types of specialised disputes. The London Maritime Arbitrators Association (LMAA) is one of them. It has been up and running since the 1960s and there are a considerable number of arbitrators,


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drawn from all walks of life in the shipping and logistics sector, on its books. It is probably one of the best known maritime and logistics arbitration forums. As maritime and logistics lawyers, here at LA Marine, we see its name in a whole raft of contracts entered into across the world. The parties to a contract must agree to use an


arbitration process to resolve disputes in their contract. The agreement has to be in writing. Companies are free to agree which country’s law they want to use in their contracts. When it comes to arbitration, many contracts will also specify the rules of which arbitration organisation they want to use. Many shipping contracts specify the LMAA and which set of rules operated by that organisation are going to be used. Increasingly, logistics providers are also inserting the LMAA rules into their contracts, although the choice of whether to use arbitration, is often decided by one of the parties, rather than both parties. The LMAA runs three types of arbitration:


• The London Maritime Arbitration Small Claims Procedure.


3. The arbitrator is paid a fixed fee when he is appointed. At the moment that fee is £4,000. The party that starts the arbitration pays this fee. If that party wins the arbitration, the losing party will reimburse this fee to the winning party.


4. There is a strict and limited timetable in which to serve submissions. Claim submissions must be served 28 days after the arbitrator is appointed attaching all the evidence. A defence must be served within 28 days with evidence and then the party who started the arbitration has the final say by serving reply submissions. The defendant has only one opportunity to explain its case. If there is a counter-claim, the timetable is adjusted.


5.Witness evidence and expert evidence are not allowed, unless the arbitrator agrees. This is very rare.


6. That is then the end of the arbitration. There is a right to ask the arbitrator for an oral hearing, but this is unusual and is discouraged.


7. The arbitration award is then issued. 8. There is no right of appeal. 9. The winning party will generally be able to recover the arbitrator’s fee (if that party paid the arbitrator’s fee) and its legal costs up to £5,000 from the losing party.


10.Generally, these arbitrations take two to three months from start to finish.


Intermediate Procedure 1. This is for claims between US$100,000 and US$400,000 or such other sum as the parties may agree.


2. The parties’ contracts must specify that they agree to use this procedure.


3. Arbitration is started by appointing an arbitrator and giving notice of the appointment to the other party.


4. Arbitration submissions are exchanged according to a strict timetable, although the parties can agree to give time extensions to each other.


Continued on page 16 April 2021


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