Doyin Rhodes, president of the Maritime Arbitrators Association of Nigeria, highlights the benefits of adopting arbitration to resolve maritime disputes.
Why should companies in the Middle East use arbitration to resolve their maritime disputes?
In terms of settling disputes, arbitration is a relatively quick process and that's very important for commercial shipping companies, since time is money at the end of the day. In addition to the cost benefits, clients have exclusivity and privacy with arbitration, while a courtroom is a very public spectacle.
Is arbitration more prominent in certain parts of the world?
In various cultures, including the Middle East and Africa, arbitration has been the traditional method of resolving maritime disputes for years, instead of court litigation.
For example, it's popular in African society because people have traditionally called on their elders to resolve disputes and the culture therefore approves this method in a professional context too.
In arbitration you call on a person of your choice, someone who you respect. In the shipping world, many prefer to use a commercial arbitrator to resolve any grievances as their financial and commercial background means they have a better understanding on the issues involved.
Arbitration has a strong presence in Nigeria and customary arbitration is still recognised under a legal system. Arbitration's presence is also emphasised by the Chartered Institute of Arbitrators in the UK, which has been practicing for over 100 years.
How is the Maritime Arbitrators Association of Nigeria helping to increase the popularity of arbitration?
Our focus is building a suitable talent pool of qualified people, who know the process of arbitration and understand how it's best utilised. It is essential to comply with the highest standards in arbitration, because shipping companies will never compromise their ethics, regardless of the situation.
An arbitrator should therefore be independence and posses the highest levels of integrity.
More specifically, what steps can be taken for the Middle East to develop into a larger arbitration centre?
I think arbitration can have a very strong presence in the Middle East shipping industry; it will simply take a little dedication to achieve this goal. The region is already heading in the right direction and Dubai has established its own arbitration centre, which is a very encouraging sign.
Of course, some critics believe the Middle East does not have enough expertise in this field, but you don't need millions of experts to become a successful arbitration centre.
Dubai already has a fantastic infrastructure and with the development of Dubai Maritime City, the region can truly become a major arbitration centre with worldclass standards.
I would like to be part of Dubai's arbitration centre in the future as the growth in the maritime sector is very exciting for the industry as a whole.
What challenges are currently being faced by the maritime industry in terms of global arbitration?
Presently many disputes are settled by arbitrators in London, Paris or New York for example. However this defeats the point for parties who have to travel far to these destinations as arbitration is meant to be cost effective for the customer.
We need to accept that the world is becoming more and more globalised and therefore there needs to be more confidence and trust between international arbitrators so that the process becomes more viable internationally.
Claims made are not always successful, each case is different, but if you have a good case with lots of evidence then you are more likely to have a successful outcome. Another issue is that we are seeing a lot of arbitration processes that are unduly delayed for multiple reasons.
It could be because parties are based out of a jurisdiction or because clients are reluctant to travel abroad, or it could be issues with costs.
Do you believe arbitration will continue to increase in popularity?
There are currently some concerns that arbitration will lose its popularity in the next 15 to 20 years. To avoid this happening, we need to safeguard our future. For example, the market will suffer if the costs involved continue to rise. A priority is therefore to develop more arbitration centres around the world.