Introduction:
Arbitration according to many is the most efficient Dispute Resolution mechanism in the World. Arbitration involves an Arbitrator who calls the parties of the dispute to the table to talk in terms and to resolve the dispute. Maritime Arbitration, in particular, has been used as one of the major forms of arbitration especially between the countries and private parties. There are several international institutions and other organizations which deal specifically with Maritime Arbitration including the United Nations Commission on Laws of Seas (UNCLOS), International Court of Maritime and Air Arbitration (CIMA), and other regional organizations including the Emirates Maritime Arbitration Center which was established in the United Arab Emirates in 2016 to name a few. These organizations help in the resolution of maritime conflicts. The difficulty of today is in understanding the modus operandi of these organizations and also the methodologies used by these organizations to resolve the conflicts. These aspects will be looked at in detail in the following sections.
History
There are several theories to when did the first Maritime Arbitration start. One of the most plausible and evidence-based theories of the beginning of the Arbitration of the Maritime matter traces back to Ancient Athens. Ancient Athens used lex Maritima or the Admiral Law which was a part of the customary law to resolve disputes arising between the traders and merchants who were involved in the trade. The reason for this type of dispute resolution in the Ancient times is the reluctance of the traders to bring the case to the courts of law which existed in Athens. This led to a growth in the use of maritime Arbitration which was seen with the expansion of trade in the Mediterranean Sea. The increase in maritime trade in the Mediterranean Sea led to the more use of the Maritime Arbitration which was based on the lex Maritima which got a new interpretation as a set of codes and conventions which referred to the settlement of the disputes between the Roman and the Non-Roman traders. This phase of the Maritime Arbitration has been continued in several parts of Europe including the Republic of Venice.
The Dispute Resolution Mechanism in the Republic of Venice was adopted in 1229 which involved the measures to resolve the conflicts that had arisen between Venetian traders to be referred to three Arbitrators which continues to even this day with many arbitrations involving the presence of a single to a maximum of three Arbitrators.
The modern-day maritime arbitration according to many historians started after the American Civil War (1861-1865). This involved a case of Naval blockade of the South to the English Cotton trading company Liverpool Cotton Association, which imposed crunching restriction on the arbitration process by inserting new clauses into the same. This has led to more use of arbitration which culminated in the formation of many International organizations and institutions handling the maritime disputes.
Advantages of Maritime Arbitration
Maritime Arbitration has many advantages which have attributed to the high usage of this form of arbitration over other dispute settlement mechanisms. One of the major advantages which as stated earlier is the involvement of various organizations and centres which provides the opportunity for increased specification and also can cater to lower costs. Some of these centres include the Emirates Maritime Arbitration Center, London Society of Maritime Arbitration of New York (SMAA), The Tokyo Maritime Arbitration Commission (TOMAC), Chambre
Arbitral Maritime de Paris (CAMP) and so on. These centres provide an opportunity to resolve conflicts peacefully and coherently which can help in better Dispute Resolution.
The second advantage of Maritime Arbitration over other forms of Dispute Resolution is that this form of arbitration goes beyond state lines and can involve Arbiters who can be flexible with the procedures and rules to be followed during the arbitration. In a court setting for an example can lead to Magistrate or the Judge of the court who may not know the Maritime Laws Internationally can use National laws and Rules which cannot provide favourable or neutral judgments. This bias and lack of expertise are avoided in the case of Maritime Arbitration because the Arbitrators involved are specialized in the Maritime laws and also Maritime organizations which provide for a fairer deal which can help in the better settlement of the dispute. This is useful in the case of disputes involving companies and manufacturers.
Another major advantage of Maritime Arbitration is the possibility of confidentiality of the procedure and rules to be followed in the Arbitration which allows for more trust. According to many Arbitration practices, the laws and the procedures cannot be disclosed outside of the Arbitration court without the consent of the parties which allows for more leeway in terms of how the laws can be framed and also provides for more confidence in the process.
The Third major advantage corresponds to the final judgment. This advantage is the uniformity in the enforcement of the Arbitral awards which acts with the same weight as other court judgments. This can allow for a reduction in the judicial review of the award which allows for more enforcement. The reason for such a universality of the Arbitral award is the New York Convention which was signed and ratified by the major countries.
The last major advantage involves the process of Arbitration. The parties who call for the Arbitration has a leeway to decide the solutions before the arbitration process begins. This allows for more leeway as said earlier as compared to referring the dispute to a court. In the national court, there cannot be the opportunity for resolution of a dispute early on as the courts will have the final say and there cannot be an underhand decision-making process allowed.
These major advantages have allowed for an increase in the use of Maritime Arbitration over other forms of dispute Settlement Mechanism.
Maritime Arbitration in India
The Maritime Arbitration in India is taken care of by the Indian Council of Arbitration, which was founded in 1965 by the Government of India. This council looks into the Arbitration between private parties such as companies and individuals.
Every Maritime Arbitration in India starts with the establishment of the Maritime Arbitration committee which according to Article 3 of the International and Domestic Arbitration Centre consisting of eleven members which include the :
The above committee shall consist of the nominees of the following. The number of committee members will be eleven:
IDAC India Vadodara Representative 2. Shipping Corporation 3. Representative of Law & Justice Government of Gujarat 4. Representative of Gujarat Maritime Board 5. Representative of Adani Port 6. Representative of Kandla Port 7. Representative of Mundra Port 8. Representative of Dahej Port[1]
This committee will decide on all cases which involve the arbitration of maritime rules which has been changed over several years to accommodate the standards put forward by the Permanent Court of Arbitration of Hague (PCA). These rules have also been amended due to several cases which will be discussed below.
Case Laws
1. BGS SGS Soma JV Vs. NHPC Ltd Case,2019
The present case was a petition against the Arbitral Award by the BGS Soma who had contended that the Arbitration was taken up illegally and without the permission of both the parties. The case was decided by the Supreme Court headed by Rohinton Fali Nariman who said that the seat of the Arbitration is the venue of the Arbitration and Faridabad cannot be considered as the seat of the Arbitration according to the Section 20(1) of the Arbitration and the Conciliation Act,1996. The case was a landmark in the sense that this provided a definition for the venue of Arbitration and also said that there cannot be arbitration without the finalization of the venue of Arbitration.[2]
2. Garware Wall Ropers Ltd. vs Coastal Marine Constructions, April 2019
The Present case was a dispute in the Arbitration between the Garware Wall Roppers Limited and also the Coastal Marine Constructions. This arbitration involved as sole Arbitrator which was challenged in the Supreme Court on 10th April 2019. The Case was decided by the Supreme Court Headed by Rohinton Fali Nariman who said that there needs to be more arbitrators and also that the arbitral awards which are unstamped cannot be considered as an evidence and is in violation of several laws of Arbitration. The case was a landmark in the Indian Maritime Arbitration history as it provided for the issuance of further rules and regulations which need to be followed during an Arbitration.[3]
Conclusion
Maritime Arbitration has been used as one of the most important forms of Arbitration in India and around the world for many ages. This has led to an increase in institutions and centres which handle cases related to Maritime Arbitration within Private parties and also countries. This hasn’t come about within certain issues including secrecy of the process and also the fewer chances of Judicial review especially in India which was addressed through various cases which have made the process smoother and more efficient than direct recourse to the courts.
References:
[1] Article-3, IDAC Maritime Arbitration Rules, 2019
[2] Bgs Sgs Soma Jv vs NHPC Ltd. (2019) Civil Appeal N0. 9307 SCC
[3] Garware Wall Ropers Ltd. vs Coastal Marine Constructions (2019) Civil Appeal no. 3631SCC
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