REUTERS | Bazuki Muhammad

ICMA: valuable insights into maritime arbitration

Hej! I have just returned from the International Congress of Maritime Arbitrators (ICMA), held last week in wonderful Copenhagen and hosted over five days by the Danish Institute of Arbitration. ICMA is held every two to three years and provides a forum for maritime arbitrators, lawyers and others in the shipping industry to exchange views and news.

As well as numerous opportunities to eat, drink and be merry (skol!), the Congress featured a packed programme of talks and presentations by lawyers, arbitrators and representatives of the shipping industry from many jurisdictions. Some of the talks focused on topical substantive shipping law issues, but many were concerned with maritime arbitration; for example, sessions on arbitration clauses, third parties, funding, security for costs, ethics, document production and interim measures. I spoke at the interim measures session with two colleagues from 20 Essex Street, Clare Ambrose and Michael Collet QC. There was some interesting discussion in our session about emergency arbitrators – the London Maritime Arbitration Association (LMAA) considered whether the new rules should include emergency arbitrator provisions but decided against it, a decision which appears to be vindicated by the judgment of Leggatt J in Gerald Metals, in which the London Court of International Arbitration (LCIA) arbitrator provisions were held to exclude the power of the court to grant a freezing injunction.

IT developments provided a fertile topic of discussion. In addition to a number of sessions devoted to developments in the use of IT in arbitration generally, there was a sobering analysis of arbitration as a potential target of cyber crime. This featured a slightly mesmerising real-time demonstration of cyber-attacks taking place minute by minute worldwide, represented by exploding coloured blobs on a map of the world.

I found the sessions on damages to be some of the most interesting and thought-provoking, particularly some fascinating presentations on the impact of derivatives and hedging on damages in charterparty claims, and the related issue of whether parties to such claims might be expected to put hedging in place as part of the duty to mitigate. This is a question that I suspect is relatively neglected by lawyers, and where the law may need to catch up with commercial practice. I will certainly be doing some reading and research in this area.

One of the highlights of the Congress was the Tenth Cedric Barclay Lecture, delivered this year by eminent maritime arbitrator, and expert on English arbitration law, Bruce Harris. Cedric Barclay was a renowned maritime arbitrator, and one of the founders of ICMA. He was also a ship owner before becoming a full time arbitrator: he is reported to have said that:

“To be a really good maritime arbitrator, one must have gone through a £3 million loss in a shipping downturn, withstood the loss, and made £5 million in the following upturn.”

I think what he was getting at here was the necessity of never losing sight of the commercial background of the parties and the dispute. This theme was reflected in the lecture (which is now available on YouTube for those who are interested), which took as its topic the changes in maritime arbitration over the last 40 years. One such change is the growing involvement of lawyers. In the 1970s, parties often represented themselves; they would appoint arbitrators who would discuss the case and, if unable to agree, appoint an umpire to decide the case – all on the basis of a small clip of documents. That, of course, has changed beyond recognition, largely because of the involvement of lawyers in representing the parties to maritime arbitration, and the corresponding growth of procedures that mimic court proceedings, vituperative correspondence and the “tyranny of time sheets”. More recently, there has been a growing trend for QCs and ex-judges to seek appointment as arbitrators, meaning that the tribunals, as well as the parties, are well and truly “lawyered-up”. This, of course, has potential impact in terms of ramping up costs and delays, as well as, perhaps, a less tangible loss in terms of a deep understanding of the commercial significance of an agreement.

I don’t think this can be dismissed as grumbling: I felt that the tensions and issues arising from the increased “legalisation” of arbitration could also be detected in several comments made by commercial delegates throughout the conference. I suppose you could say that this is hardly new, and, of course, arbitration remains the leading dispute resolution mechanism for maritime disputes. But from the point of view of London maritime arbitration, the growth of competing arbitral seats, particularly in the Far East, makes it important for the wishes and aspirations of the consumers of maritime arbitration to be kept well to the fore, and to keep our less appealing lawyers’ habits under control. Events like ICMA give us “service-providers” an invaluable opportunity to hear first-hand feedback from those consumers, as well as gaining insights from other experienced lawyers and arbitrators. Mange tak for a very enjoyable and interesting week!

20 Essex Street Karen Maxwell

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