Notes on the drafting of arbitration agreements in shipping and transport related contracts

1. Notes on the drafting of arbitration agreements in shipping and transport related contracts • Fredrik Andersson • 16 June 2014

2. Arbitration agreements appointing the arbitrator of the claimant as sole arbitrator in case the respondent is passive • “If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement” (BIMCO standard dispute resolution clause). • vs. sole arbitrator appointed by an institute (cf. equal treatment principle acc. to Ducto)

3. Arbitration agreement including a procedure for appointing the third arbitrator at a later stage in the proceedings • “If the parties are unable or unwilling to agree the appointment of a sole arbitrator in accordance with (i) then each party shall appoint one arbitrator, in any event not later than 14 days after receipt of a further request in writing by either party to do so. The two arbitrators so appointed shall appoint a third arbitrator before any substantive hearing or forthwith if they cannot agree on a matter relating to the arbitration” (Shell time 4, clause 46). • vs. standard procedure under established institutional rules and domestic arbitration laws where the chairman is to be appointed within a given time limit

4. Arbitration agreements linking the procedural rule to the amount in dispute • “In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced” (BIMCO standard dispute resolution clause). • vs. standard combination clause where the institute is given the power to decide procedure taking a number of parameters into account

5. Arbitration agreements including qualification requirements • ..”shall have at least 5 years experience of marine insurance law…” (P&I and Hull) • vs. clean model clause

6. Questions • Why do we see these type of special solutions? • Aretheygood solutions? • Why not keep it simple?