Belt and Road Summit Hong Kong as the Deal Maker and Dispute Resolver : Maritime Dispute Resolution Hong Kong 28 June 2018 MARY THOMSON Chartered Arbitrator, Mediator, Adjudicator, Barrister & Former Solicitor Pacific Chambers Hong Kong Associate, Stone Chambers London & Singapore Pacific Chambers 901 Dina House 11 Duddell Street, Central, Hong Kong T: (852) 2521 5544 F: (852) 2524 5912 E: mary.thomson@pacificchambers.com 1
INTERNATIONAL MARITIME ARBITRATION : OVERVIEW Unique aspects of maritime arbitration compared with other types of commercial arbitration : 1. Specialist maritime arbitration associations 2. Standard maritime arbitration clauses 3. Incorporation of arbitration clauses 4. Small claims and expedited procedures 5. Interim measures This Photo by Unknown Author is licensed under CC BY-SA 2
1. SPECIALIST MARITIME ARBITRATION ASSOCIATIONS Tokyo Maritime Arbitration Commission of the Japan Shipping Exchange, Inc (TOMAC) -1926 China Maritime Arbitration Centre (CMAC) - 1959 London Maritime Arbitrator s Association (LMAA) -1960 Hong Kong Maritime Arbitration Group (HKMAG) - 2000 Singapore Chamber of Maritime Arbitration (SCMA) 2004 Australia Maritime and Transport Arbitration Commission (AMTAC) -2007 Emirates Maritime Arbitration Association (EMAC) - 2016 3
2. STANDARD MARITIME ARBITRATION CLAUSES LMAA This Contract is governed by English law and all disputes arising under or in connection with it shall be referred to arbitration in London. Arbitration shall be conducted in accordance with one of the following LMAA procedures applicable at the date of the commencement of the arbitration proceedings:- (i) Where the amount claimed by the Claimants is less than US$400,000 the reference shall be to a tribunal of three arbitrators and the arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure. (ii) Where the amount claimed by the Claimants is less than US$100,000 the reference shall be to a sole arbitrator and the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure. (iii) In any case where the LMAA procedures referred to above do not apply, the reference shall be to three arbitrators in accordance with the LMAA Terms current at the date of commencement of the arbitration proceedings. 4
2. STANDARD MARITIME ARBITRATION CLAUSES - HKMAG This Contract shall be governed by and construed in accordance with English / Hong Kong* law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in Hong Kong in accordance with the Arbitration Ordinance Cap. 609. The arbitration reference shall beto three arbitrators: (i) A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice, and stating it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so.. 5
2. STANDARD MARITIME ARBITRATION CLAUSES HKMAG CONT D If the other party does not appoint its own arbitrator and give notice that it has done so..the party referring a dispute to arbitration may appoint its own arbitrator as sole arbitrator... The award of a sole arbitrator shall be binding on both parties as if he/she had been appointed by agreement. (i) Where each party appoints its own arbitrator, then the two arbitrators so appointed may proceed with the arbitration and at any time thereafter appoint a third arbitrator so long as they do so before any substantive hearing or forthwith in the event that they cannot agree on any matter relating to the arbitration.. This arbitration shall be conducted in accordance with the HKIAC Small Claims Procedure..provided that neither the claim nor any counterclaim exceeds the limit provided for in such procedure Default appointment is by HKIAC 6
2. STANDARD MARITIME ARBITRATION CLAUSES SHAGANG SOUTH-ASIA (HONG KONG) TRADING CO LTD V DAEWOO LOGISTICS (THE NIKOLAOS A) [2015] EWHC 194 (Comm) Parties agreed in fixture note: 23. ARBITRATION: ARBITRATION TO BE HELD IN HONG KONG, ENGLISH LAW TO BE APPLIED. 24. OTHER TERMS/CONDITIONS AND CHARTER PARTY DETAILS BASE ON GENCON 1994CHARTER PARTY. GENCON 1994: Clause 19 Law and Arbitration (a) This Charter Party shall be governed by and construed in accordance with English law and any dispute arising out of this Charter Party shall be referred to arbitration in London in accordance with the Arbitrations Acts (c) Any dispute arising out of this Charter Party shall be referred to arbitration at the place indicated in Box 25 subject to the procedures applicable there. The laws of the place indicated in Box 25 shall govern this Charter Party. (d) If Box 25 in Part 1 is not filled in, sub-clause (a) of this clause shall apply. 7
2. STANDARD MARITIME ARBITRATION CLAUSES Cont d SHAGANG SOUTH-ASIA (HONG KONG) TRADING CO LTD V DAEWOO LOGISTICS (THE NIKOLAOS A) [2015] EWHC 194 (Comm) Cont d Daewoo appointed an arbitrator and later appointed him as sole arbitrator pursuant to 19(a) and Arbitration Act 1996. Shagang suggested seat was HK and applicable procedural law therefore HK Arbitrator ruled on own jurisdiction and decided arbitration subject to English Arbitration Act 1996and Gencon clause 19(a) applied. Charterers appealed and English High Court held: to be held in Hong Kong implied choice of HK as seat of arbitration HK and of HK law as the curial law. Clear words required to displace presumption that law of the seat to be applicable procedural law. English law to be applied referred to the substantive law applicable to govern the substantive disputes under the Charterparty Award set aside English Court described HK as..a well known and respected arbitration forum with a reputation for neutrality, not least because of its supervising courts. 8
2. STANDARD MARITIME ARBITRATION CLAUSES Cont d Arbitration Clauses requiring Commercial men, Shipping Men, engaged in shipping. Example New York Produce Exchange (NYPE) time charterparty, Line 109 Lord Donaldson in Pando v Filmo [1975] 1 Lloyd s Rep.560 where commercial men clause: Lawyers practising in commercial matters are not commercial men Full time arbitrators, although originally qualified as lawyers, are Vincor Shipping v Transatlantic Schiffahrtsknotor [1986] where commercial shipping man clause: Solicitor who had not practised for 12 years but has been engaged full time at a P&I Club was a commercial shipping man U.S. Ship Management v Maersk Line [SDNY 2002] where shall be a commercial person knowledgeable in the operation and chartering of container ships The practical commercial experience a lawyer gains doing non legal work in the industry cannot fall away the moment he is a practising lawyer 9
3. INCORPORATION OF ARBITRATION Example Congenbill 2016, cl. 1 CLAUSES All terms and conditions, liberties and exception of the Charter party, dated as overleaf, including the Law and Arbitration Clause / Dispute Resolution Clause are herewith incorporated. 10
3. INCORPORATION OF ARBITRATION CLAUSES Cont d THE FEDERAL BULKER [1989] 1 Lloyd s Rep 103 Clause in the charterparty required bills of lading to provide for arbitration of all disputes arising out of this contract Incorporation Clause in Bills of Lading: all terms as per charterparty to be considered as fully incorporated as if fully written. Held: The arbitration clause was not incorporated. The bill of lading is a negotiable commercial instrument which may come into the hands of a foreign party with no knowledge of the terms of the charterparty. Specific words of incorporation are required to incorporate an arbitration clause. 11
LMAA 4. SMALL CLAIMS AND EXPEDITED Small Claims Procedure (SMP) (1989, 2002, 2006, 2012, 2017) Claims or counterclaim not exceeding US$100,000 Fast and Low Cost Arbitration (FALCA) (1996) Claims not exceeding US$250,000 if no figure agreed HKIAC Documents Only Procedure (2000) PROCEDURES Small Claims Procedure (2003) - Claims not exceeding US$50,000 HKMAG Hong Kong Maritime Arbitration Clause arbitration conducted according to the HKIAC Small Claims Procedure SCMA Rule 46 Small Claims Procedure (2009, 2015) claims not exceeding US$150,000 12
4. SMALL CLAIMS AND EXPEDITED LMAA s Small Claims Procedure: PROCEDURES Sole Arbitrator fee fixed at Stg3,000, additional Stg2,000 if counterclaim Within 2 weeks of notice of arbitrator appointment, Letter of Claim not exceeding 2,500 words with supporting documents Within 4 weeks, Letter of Defence, and Counterclaim, not exceeding 2,500 words each with supporting documents Letter of Reply not exceeding 1,000 words, Defence to Counterclaim not exceeding 2,500 words within 3 weeks Experts reports not to exceed 2,500 words with arbitrator s permission No oral hearing unless arbitrator requires in exceptional circumstances Award to be published within one month Recoverable costs Stg4,000, if with Counterclaim Stg4,500 13
5. INTERIM MEASURES & OTHER Available measures : Arrest of ship to secure a potential arbitration award. Ship arrest in an action in rem for the purpose of obtaining security does not constitute a breach of the arbitration agreement - s 20(6) AO Arrest of ship to obtain security for the enforcement of an arbitration award - THE ALAS [2014] 4 HKLRD 160 HKCFI affirmed by HKCA Other interim measures to aid maritime arbitration Injunctions (including Mareva Injunction) Ship Inspection Orders Preservation of Evidence Orders Taking of samples JUDICIAL MEASURES Sale of Property Under Dispute (e.g. Sale of Cargo to Preserve its Value) 14
THE END THANK YOU MARY THOMSON Chartered Arbitrator, Adjudicator, Mediator & Barrister E mary.thomson@pacificchambers.com Mary.thomson@stonechambers.com 15