The London Maritime Arbitrators Association was founded in 1960, and as its name suggests, it is an association of practising maritime arbitrators.
That means that it is an arbitral association which facilitates ad hoc arbitration, as opposed to an arbitration institution which supervises and administers arbitration (like the LCIA or ICC for example).
Types of Disputes
The LMAA is focused primarily on the shipping sector. It hears disputes in three main categories; maritime, international trade & commodities, and offshore energy.
Examples of disputes in those categories include:
- Maritime Disputes: Charterparties, bills of lading, ship sale and purchase, marine insurance and P&I coverage, bunkering.
- International Trade and Commodities: Late or non-delivery, demurrage, letters of credit, performance guarantees.
- Offshore Energy: Drilling contracts, heavy lift contracts, offshore construction, boat charters for wind farms.
Some members of the LMAA also accept appointments to sit on Dispute Resolution Boards for construction and decommissioning projects.
While the primary focus of the LMAA is shipping, the LMAA rules can be incorporated for all types of disputes.
Size of Cases
The LMAA hears cases of all values, and the LMAA Terms are designed to be applied to claims without a financial limit.
However, there are expedited procedures available for smaller claims.
Claims that are under $100,000 may be referred to the Small Claims Procedure. Claims which fall between $100,000 and $400,000 in value can use the Intermediate Claims Procedure.
Arbitrators
Arbitrators of the LMAA are specialist maritime arbitrators, with specific shipping and logistics backgrounds. There is a high bar to be accepted as an arbitrator in the LMAA and to do so, arbitrators must have at least 15 years’ experience in shipping, and they must have knowledge of English contract law, tort law and arbitration procedures.
Their shipping experience does not necessarily need to be legal; commercial or technical experience is also considered.
Given that arbitrators are drawn largely from a specialised pool of individuals and the number of specialised law firms and other representatives who appoint arbitrators is relatively small, there is a higher potential for perceived or real conflicts of interest and potential bias.
Parties or representatives may frequently appoint the same arbitrator in different cases.
To help parties and arbitrators navigate this particular challenge, there is a specified custom for LMAA arbitrations. It includes guidance such as:
- The arbitrator cannot be currently connected with the parties.
- There should be no recent commercial relationship between the arbitrator and one of the parties.
- Where regular relationships occur, the test is one of time. If the last appointment was during a period of less than three years, it will usually require disclosure by the arbitrator.
The full guidance on the practice that parties and arbitrators should abide by is on the LMAA website.
Unique Features
The LMAA is primarily used within the shipping industry, so it is one of the few arbitral associations that is sector specific.
Due to that, it has highly specialised arbitrators that have particular knowledge and experience in the maritime industry.
As it is not an arbitral institution, it does not charge administration fees, and this is often an attractive feature for parties in dispute.
Arbitration Rules
Arbitrations that are subject to LMAA Rules will follow the LMAA Terms 2021.
If the parties have opted for the Small Claims Procedure or the Intermediate Procedure, they will follow separate specific rules that allow for a truncated arbitration.
Costs
As the LMAA is not an institution, no administrative fees are charged.
Arbitrations that are subject to LMAA terms will be charged for the Arbitrators’ time by the hour.
However, costs are capped in the Intermediate and Small Claims Procedures.
For disputes that are referred to the Intermediate Procedure, the arbitration fee should not exceed one third of the claimant’s legal costs.
In small claims the arbitration fee is fixed at £4,000 and an additional £2,500 if a counterclaim is filed in excess of the claim.
Parties will pay an additional £350 for the appointment of each arbitrator.
Language
The language of LMAA arbitrations is usually English, but the LMAA terms and Small and Intermediate Claim Procedure are also available on the website in Chinese.
