Maritime arbitration: the dispute resolution cornerstone of the global shipping sector

Daniella Horton FCIArb considers the reach of maritime arbitration, its widespread adoption, and proven successes.  

In the context of the wider international arbitration world, maritime arbitration is sometimes described as “sectoral”. It is identified in the International Bar Association (IBA) Guidelines[1] as a specific category of arbitration, reflecting the fact that relatively few law firms specialise in maritime arbitration and tend to favour a core of experienced arbitrators. However, “niche” it is not. Rather, it is the chosen forum of dispute resolution for shipping entities worldwide, both domestically and internationally, making it a veritable powerhouse of international arbitration, especially in London.

Maritime-related activity can take the form of local commerce and construction, river or coastal shipments. Disputes in this realm tend to be referred predominantly to domestic maritime arbitration.  However, all major cargo movements, many vessel construction contracts, the vast majority of contracts for the hire and use of vessels all tend to be international in nature, both in relation to the parties involved and the geographical locations between which vessels are built and sold, sail and berth, and the cargoes carried. These factors, in turn, render the vast majority of maritime arbitration references wholly international in nature.

The shipping industry is a global business. A large number of maritime arbitration centres have been developed over the last 70 years to cater to the specific needs of maritime arbitration.  Amongst the first maritime-specific arbitral bodies to be set up were CMAC, followed, in chronological order, by the bodies set up to serve international maritime arbitration in Paris, London and New York, namely CAMP[4], the LMAA[5] and the SMA,[6] respectively. In the 1980s and 1990s, now well-established maritime arbitration bodies such as the GMAA[7], the VMAA[8], TAMARA[9] (now UNUM[10]) were set up, with yet further maritime-specific arbitration bodies, particularly in Asia, following in the 2000s.  These included SCMA[11], AMTAC[12] and HKMAG[13].

These maritime arbitration bodies facilitate and support maritime arbitration in their relevant locations. In many cases, they also publish their own procedural rules, the most widely known and most frequently adopted of which are the London Maritime Arbitrators Association (LMAA) Terms and Procedures.

Putting maritime arbitration into context in the London market, its caseload of, on average, 1,700 new references each year makes up by far the majority (approximately 75%) of London-seated arbitrations commenced annually[14]. London maritime arbitration is synonymous with ad hoc arbitrations applying the procedural rules of the LMAA (on average, 1,600 new references are commenced under LMAA Terms and Procedures every year, which figure increased to 1,800 in 2022), with the LCIA[15] administering a further approximately 100-125 cases (representing some 37% of its caseload in 2022). To put this figure into the context of the wider international arbitration figures, the annual volume of London-seated maritime arbitrations exceeds that of ICC arbitrations two-fold year on year.

Internationally, the preferred seat of maritime arbitration is indisputably London. A recent industry report[16] concluded that London was “by far the most popular seat for maritime arbitration in 2022, handling over 85% of the world’s maritime arbitration”. A theme which has remained a constant throughout the 25 years the LMAA has gathered statistics in relation to LMAA arbitrations.  After London, the long-standing maritime community in Hong Kong and the developing maritime cluster in Singapore, also serve the burgeoning Asian shipping market, in particular.

However, whilst the appeal of London maritime arbitration remains a constant, it now extends far beyond the core shipping contracts of charter parties and bills of lading with which the brokers of the Baltic Exchange (who made up the founding members of the LMAA) dealt. The commodities sector has for decades now readily adopted London arbitration combined with LMAA Terms and Procedures as their dispute resolution mechanism of choice, even in some cases where the entities involved have their own trade body to whom their disputes could be referred.  More recently, the offshore energy sector has followed suit and now frequently refers disputes to London maritime arbitration. The flexibility of an ad hoc regime, the breadth of experience and expertise of London maritime arbitrators and the wider London maritime cluster, and long-standing faith in the English legal system are just a few reasons why. The suite of BIMCO contracts covering myriad aspects of maritime transactions, from core shipping contracts through to offshore operations, provide for London arbitration on LMAA Terms as the default choice, as does the BIMCO Dispute Resolution Clause. 

In order to support both current and upcoming maritime arbitration practitioners, maritime arbitration has its own biennial conference. ICMA, the International Congress of Maritime Arbitrators, founded in 1972, has quite literally travelled around the globe over the years, from Vancouver to Hong Kong, Sydney to New York, and most recently in Rio de Janeiro (just pre-COVID) in 2020. The next Congress will take place in Dubai later this year, in November 2023. Since 2020, Ciarb has run an international maritime arbitration diploma. The industry even has its own mooting competition: IMLAM, the International Maritime Law Arbitration Moot, hosted rotationally in Asia, Australia and Europe, most recently in Wales by Swansea University, with teams from no less than 35 universities worldwide having participated in recent years.

Looking to the future development of maritime arbitration, the industry’s green credentials and its ability to adapt to new technologies have already been established.  Your average maritime arbitration reference is already a largely digital experience.  Submissions and documents are routinely served solely by email.  Post COVID, hearings, where needed, are now frequently hybrid or fully virtual in nature, readily supported by technologically advanced arbitration centres such as the IDRC in London and Maxwell Chambers in Singapore.  Hearing bundles are increasingly electronic, and digital platforms on which to conduct maritime arbitration are increasingly being used.

In conclusion, whilst its technical description may be sectoral and its nature unashamedly specialist, maritime arbitration is a dispute resolution powerhouse without equal, primarily based in London, serving the world and ready to adapt to future technologies to continue doing so. 

About the author:

Daniella Horton FCIArb is a maritime arbitrator, a Full Member of the LMAA and the Association’s immediate past Honorary Secretary, which position she held between 2015 and 2021. She began her career as an English-qualified solicitor in 1995 and has specialised in shipping and international trade since qualification.  Having been involved in maritime arbitration throughout her career, subsequently as in-house counsel and a consultant, Daniella started sitting as an arbitrator in 2015, became a Fellow of Ciarb in 2018 and a Full Member of the LMAA in 2020. Daniella has expertise in charter party, commodities, bill of lading and shipbuilding disputes. She has operational experience in South Africa, The Netherlands, South Korea and Ukraine. Daniella is a member of the Baltic Exchange.

Ciarb’s 2024 diploma in International Maritime Arbitration commences on 3 April 2024. Register your interest with our team: education@ciarb.org   

[1] IBA Guidelines on Conflicts of Interest in International Arbitration

[2] It is estimated that 85-90% of all shipping-related disputes are referred to arbitration

[3] The China Maritime Arbitration Commission set up in 1956

[4] Chambre Arbitrale Maritime de Paris established in 1959

[5] London Maritime Arbitrators Association formed in 1960

[6] Society of Maritime Arbitrators set up in 1963

[7] German Maritime Arbitration Association established in 1983

[8] Vancouver Maritime Arbitrators Association set up in 1988

[9] Transport and Maritime Arbitration Rotterdam-Amsterdam formed in 1988

[10] UNUM Transport Arbitration and Mediation established in

[11] Singapore Chamber of Maritime Arbitration established in 2004

[12] Australian Maritime and Transport Arbitration Commission set up in 2007

[13] Hong Kong Maritime Arbitration Group, originally formed in 2000

[14] From the available statistics the total annual number of London seated arbitrations are estimated to be around 2,300 new cases across all areas of law)

[15] London Court of International Arbitration

[16] The Maritime Arbitration Universe in Numbers, HFW September 2023