FOCUS: Resolution of tanker disputes through arbitration
SEE ALSO: COMMENT: VAT and the Supply Chain
By Maali Khader, Case Manager, EMAC
Tanker shipping and trade constitutes a large portion of the maritime sector. Disputes in this area can come in a variety of forms including, distress and salvage, environmental damage, performance of speed and fuel consumption.
No matter the economic climate, it is essential for tanker and shipping companies to maintain relationships with key customers and retain business. Disputes, no matter the size, have the potential to damage these relationships, tarnish reputations and consume large amounts of money, time and talent. As a result, it is important for disputes to be resolved in a timely fashion to enable charterers, ship owners and cargo owners to continue their trade.
Today, there are numerous alternatives to litigation which can help resolve long-standing disputes and produce win-win solutions for cases which otherwise could potentially leave both sides negatively affected. Alternatives to litigation include arbitration, mediation and other forms of conciliation. While a number of these forums exist in the region, there has been an increase in the demand for a dedicated maritime arbitration service with both sector and legal know-how, to meet the needs of the growing sector. Therefore, the introduction of a specialised maritime arbitration centre was the next logical step. Thus, the Emirates Maritime Arbitration Centre was established by Decree in April 2016.
For the region’s tanker shipping sector, the benefits of a specialised maritime arbitration centre are its informality, speed, cost and flexibility. In addition, with a specific understanding of the regional and international maritime sector, deliberations through a sector-specific centre ensure outcomes that reflect the sector and regional nuances. Ultimately, the outcomes from using arbitration and/or mediation are aimed at obtaining value-added, future orientated solutions for all parties involved.
Essential to the speed and efficiency of alternative dispute resolution methods is the mediation and arbitration rules used. EMAC’s rules incorporate international standards, such as UNCITRAL 2010 which ensures a neutral framework for the resolution of disputes. EMAC’s rules cover key topics including access to fast-track arbitration, application for emergency arbitration, the ability to issue interim measures and accessibility to common law jurisdiction.
Resolving disputes in a swift manner allows tanker and shipping companies, and their clients, to continue business as usual. In EMAC’s case, one of the first priorities is to ensure that parties to a dispute have access to a directory of well vetted arbitrators, mediators and experts, generally referred to as the panel. Additional nuances with this Centre in particular is the offer of fast track arbitration to expedite the deliberation process, with resolutions occurring within days and weeks, as opposed to lengthy litigation proceedings which can often be timely. Furthermore, the mediation rules allow parties reaching an amicable settlement to request for the settlement to be registered in the form of an arbitral award. This enables settlements to be enforced as arbitral awards without the need for additional proceedings in the event of a default.
For the region’s tanker shipping and trade sector, and for those operating in the region, the introduction of a regional maritime arbitration centre provides a means for settling disputes swiftly and efficiently. This allows the sector to continue day-to-day operations without the burden of lengthy legal disputes, in turn, saving valuable time, money and resources.