Cracking maritime disputes

When it comes to disputes, winning a case is just the start of the battle. In the maritime world, very often the ruling, or award in the case of arbitration, has to be enforced in a different jurisdiction, and that is where local legal knowledge – and enormous reserves of patience – is in demand.

Pursuing what the winning party sees as justice can now be such a complex process that 250 lawyers, underwriters, claims handlers and other service providers gathered in London recently to discuss the many intricacies involved in enforcement and recognition of awards.

Port and terminal authorities often have a keen interest in the efficient resolution of shipping altercations, as part of the drama is played out on their home field. For instance, the Panama Canal is a favourite place to arrest ships and restrain cargo and bunkers because it is one of the shipping crossroads of the world. Most of these proceedings are not against companies with assets in Panama, but arise because a ship at issue happens to pass through the Panama Canal. No port authority wants to have a ship tied up for months while claimant and counter-claimants argue over such matters as security and distress sales, matters that are nothing to do with the port.

Speakers from 14 jurisdictions made it clear at the International Maritime Law Seminar 2012 that there are many variants in conditions set by territories for recognition. What the party who was successful in a hearing needs is to avoid having to fight it out all over again if a court overseas refuses to accept the findings. The Netherlands, for instance, will only institute enforcement on the basis of EU regulations, while foreign decisions on ship arrests are not enforceable in Poland.

What gets frustrating for bystanders, such as the ports interests, is the time it takes to bring finality to cases. In Mexico it often takes between 18 to 24 months to obtain recognition and enforcement, but this is a trifle compared to the three to five years this might require in India – following on from up to 10 years of substantive proceedings.

Some positive news was brought to the London seminar by a leading Mumbai lawyer, Amitava Majumdar of Bose & Mitra. Mr Majumdar said that just a few days earlier, the Indian Supreme Court in a judgment involving an Indian charterer had decreed that in future the district courts, which are empowered to enforce arbitral awards, will have much less scope to interfere with them. It will, however, take some time for this change to work through the system, for the old rules will still apply to arbitrations concluded before September 2012.

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