Originially from: World Arbitration and Mediation Review (WAMR)

New Rules for London Maritime Arbitration
by G. Hans Sperling

Maritime Arbitration
Maritime arbitration is not what it used to be, we are told by those
who are regularly involved in it. Most maritime arbitrations are still held
in London, and typically involve disputes over charter parties, that is, ship
leases. There was a time, however, when these disputes were settled
informally by two senior and experienced shipbrokers. After about a half
an hour's discussion in one of the cubicles on the floor of London's Baltic
Exchange, the two gentlemen would reach a decision and then retire to the
Baltic Restaurant for refreshments. If they were unable to agree, they
would likely impose on a third broker, who happened to be passing by, to
serve as an umpire and resolve the dispute. The three of them would then
retire to the Baltic Restaurant for refreshments. Arbitrators needed only
common sense, varied commercial shipping experience, a sense of fair
play, and a working knowledge of contract law as it affected shipping.
"There were no fundamental principles of law involved or needed." Cases
too close to call were split down the middle. Justice was rough, but the
parties got what they wanted: expert adjudication of their dispute with a
minimum of expense and procedural delay.
Times have changed. Arbitration has become slow and expensive.
Many users of arbitration complain that the old "commercial approach"
has given way to a "legalistic approach," that no longer fulfills their
expectations. Arbitrating parties search the globe for vital witnesses to be
"delivered by Concorde" to the hearing. Teams of barristers and solicitors
are linked-up by satellite. "The old informality has...yielded to a somewhat
more rigid courtroom atmosphere." Discovery is extensive, proceedings
are structured and formal. One commentator suggests that sight may have
been lost of what arbitration is all about, "not a close shadow of the
Courts," but rather "a flexible means of settling disputes quickly, fairly
and at minimum cost to the parties."

Arbitration is slow. One commentator points to statistics indicating
that international arbitrations last between one and six years. Another cites
as typical an arbitration lasting just over four years. This does not include
the time required to form the arbitral tribunal, execute its terms of
reference, resolve post-award disputes, or pursue enforcement in another
country. All accounted for, an arbitration can last as long as seven years.
Arbitration is also expensive. One commentator offers an example in
which the arbitration of a $49,345 claim resulted in arbitration costs
totaling $43,017. This includes only the direct expenses of arbitration: