Originally from Navigating Maritime Arbitration: The Experts Speak - Second Edition

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I. ATTORNEYS’ FEES ARE AWARDED TO THE PREVAILING PARTY IN US MARITIME ARBITRATIONS

Under U.S. law each party bears its own costs, including attorneys’ fees. This is sometimes referred to as “the American Rule” in contrast to “the English Rule” pursuant to which the prevailing party on the merits is awarded its costs, including attorneys’ fees.  

However, it is and was always the case that a tribunal in the U.S. (whether a court or arbitration panel) could award attorneys’ fees to the prevailing party if a contractual provision or statute or court rule allowed it to do so.  

As discussed below, based on contractual provisions and case law holdings, maritime arbitrators in the U.S. are now authorized to and routinely do award attorneys’ fees to the prevailing party.

Some charter party forms, such as the Asbatankvoy and those derived from it, always authorized an award of fees.  Clause 24 of the Asbatankvoy provides: “Awards made in pursuance to this clause may include costs, including a reasonable allowance for attorney’s fees . . . .” Clause 23 further provides: “Damages for breach of this Charter shall include all provable damages, and all costs of suit and attorney’s fees incurred in any action hereunder.”
In 1994, the Society of Maritime Arbitrators (“SMA”) amended Section 30 of its rules to state: “The Panel is empowered to award reasonable attorneys’ fees and expenses or costs incurred by a party or parties in the prosecution or defense of the case.”  Accordingly, if the arbitration clause in the charter or contract incorporates the SMA Rules by reference, the Rules provide the contractual provision which authorizes the panel to award attorneys’ fees to the prevailing party.