James Clanchy of the Lexis®PSL Arbitration team attended the 20th International Congress of Maritime Arbitrators (ICMA) in Copenhagen during the last week of September. Here he reflects on lessons from the congress for the wider world of commercial arbitration.
It was the legendary English arbitrator, Cedric Barclay, who established ICMA with a group of like-minded colleagues from France, Russia and the US, originally as a diversion during a boring part of the 4th ICCA congress in Moscow in 1972. The first meeting took place in the offices of the Soviet ministry of merchant marine.
ICMA has taken place every two or three years since then at venues all over the world. At the end of September this year, 250 delegates from 35 countries gathered in Copenhagen for ICMA XX, hosted by the Danish Institute of Arbitration.
Maritime arbitration’s diversity and international reach
Maritime arbitration continues to thrive. It comes in every shape and size and is present at more seats and in more institutions than any other type of international commercial arbitration. By their very nature, shipping disputes involve parties, lawyers, experts and arbitrators from diverse parts of the world. Papers were presented at the congress about arbitration in Brazil, Nigeria, China, India, Malaysia, Indonesia, Qatar, Turkey, Australia, the US, and, of course, Denmark.
As with arbitration in other sectors in which industry knowledge is key, such as TMT and construction, its users like to keep up to date with developments not only in arbitration procedure but also in substantive law and business practices.
Topics popular at other arbitration conferences appeared alongside more specialist subjects. Third party funding was discussed, of course, including the new legislation in Singapore and the recovery of funding costs in Essar v Norscot, an ICC arbitration which had been handled, on the successful funded party’s side, by a firm of maritime solicitors in Plymouth and a QC from leading shipping chambers in London (see Chirag Karia QC’s blog post on the case here).
Shipowners formed their own mutual funding schemes in the 19th century: we had an interesting paper on the history of freight, demurrage and defence clubs. See my blog post, Third party funding in arbitration: the first 125 years
Cold winds and double hatting
Maritime arbitration is buffeted by the same chill winds that led Gary Born to declare last year, ‘Winter is coming for international commercial arbitration’. He warned that the arbitration community should be prepared to defend itself against its critics, a metaphorical ‘army of undead’ who could demand more government control of the arbitration process.
ICMA opened its doors to a cold wind of its own on the final day of the congress by inviting in local representatives of the shipping industry and, importantly, insurers who assume some of the industry’s risks and pay some of its legal expenses. They were asked to tell us what they thought about arbitration. The message was clear: if they had to use arbitration, they would like it to be simpler, quicker and cheaper. Arbitrators should focus on resolving the disputes before them and not on being custodians of the process. Lawyers had to realise that parties had businesses to run; time spent on disclosure exercises was time not spent on that commercial purpose. Both arbitrators and lawyers should be ready to provide budgets for the arbitration.
The Danish answer to the cold winds of winter is hygge, a sort of cosy contentment, taking pleasure in the simple things of life in the company of friends. Plenty of candlelight and opportunities for conviviality (and excellent Danish beer) were present at ICMA but, in a way, this session with the industry was hygge of a kind as well: it was a no-nonsense conversation between longstanding partners in the business of dispute resolution, which got back to basics.
It was a refreshing change from lawyers talking about lawyers’ problems, which occupies so much time at international arbitration conferences. In this company, double hatting was simply another method of protecting against the cold.
The voice of maritime arbitration must be heard
In his Cedric Barclay lecture, which opened the congress, Bruce Harris reflected on his first 40 years as a maritime arbitrator and on the changes which he had seen during that time in the industry and in the practice of arbitration. He noted that arbitration, in London at least, had become ‘substantially more formal and lawyer-controlled, and very considerably more expensive than ever it was’. He warned, ‘we cannot expect that the increasing use of professional lawyers and ex-judges as arbitrators is going to reverse that tendency’.
Maritime arbitration’s proximity to its users, its continuing (if dwindling) tradition of drawing commercial arbitrators from a range of professions outside of the law, the high standards and experience of the insurer-funders who pay for so much of it, and its adaptability and readiness to innovate, these factors have all contributed to its longevity and its continued success.
In the first Cedric Barclay lecture in Vancouver in September 1991, Lord Mustill, the distinguished judge and co-author of the leading textbook on commercial arbitration (published by LexisNexis), said, ‘The voice of maritime arbitration is not heard as it should be. Too little is said to those who ought to be listening, about its practices, its importance and its theory.’ That observation remains as true today as it was more than 25 years ago.
However, judging by the enthusiasm of the Brazilian delegation in Copenhagen, maritime arbitration’s voice will be heard loudly in Rio de Janeiro, ICMA’s next port of call.
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