Somewhat surprising that four centuries of shipping litigation in London should not have returned a definitive answer to this question before now.
The recognition and enforcement of arbitration awards will remain unchanged between the UK and EU/EEA states because the New York Convention (on recognition and enforcement of arbitration awards) operates independently of the EU/EEA regimes and Britain continues to be a party of the New York Convention.
There will be changes however in civil and commercial cooperation on the recognition and enforcement of court judgments should the UK leave without having reached an agreement with the EU by 29 March 2019:
Optional for Nordic leads – Mandatory for non-Nordic leads.
The new version of the Plan now includes an arbitration clause referring disputes to arbitration under NOMA Rules (Nordic Offshore & Maritime Arbitration Association). This is optional for a Nordic claims leader but the default for a non-Nordic claims leader. This may come as a surprise to some.
The head office of the claims leader will determine the choice of law and jurisdiction. So, if the claims leader is Norwegian then Norwegian law will govern the insurance contract, and any dispute will be subject to the jurisdiction of the court where the claims leader has its head office. Correspondingly, if the claims leader is Danish with its head office in Copenhagen, the insurance contract is governed by Danish law and disputes must be referred to the court which according to Danish law is the competent court.
It is automatically agreed that Norwegian law and Clause 1-4B on Nordic Arbitration applies. The text of the arbitration clause is available here.
Brexit and questions of enforcement of a Norwegian court judgment in England provide a partial explanation for the change to arbitration.
Changes could be made to the choice of law or jurisdiction including altering the agreement to arbitrate. An agreement to mediate in case of dispute could also be chosen. Any agreement must be in writing.
A non-Nordic lead or a non-Nordic assured might prefer a non-Nordic choice of law or different venue but that would undermine the point of insuring on Plan terms. Indeed, the Plan provides for Norwegian law if the lead is not in the Nordics.
Careful thought needs to be given to alternative choices.
In my view, it would not be appropriate to choose non-Nordic law to govern a Plan insurance contract. There are significant underlying differences from English law for example. The Plan is an ‘all risks’ rather than ‘named perils’ cover, and there are significant differences of the effect of breach of warranty. The English Marine Insurance Act could have a detrimental impact and there would be friction between interpretation of the Plan and the English statute. The same would also follow for other choices of law outside the Nordics.
The default of Norwegian law (or choosing another Nordic law) with a non-Nordic venue would certainly increase legal costs, expert evidence on the relevant law being required.
The Nordic Way
The Plan’s success lies in its history and in its continuous development by the Nordic Revision Committee: having been discussed and amended over time to create a standard contract between the insurer and the insured, without much interference from statute. There is a Nordic tradition of reliance on local average adjusters, which works well although some non-Nordic assureds (and their brokers) view this with scepticism. There is also reliance on the Commentary to the Plan which is also discussed and approved by the Revision Committee. The Commentary is therefore regarded as an integral component of the standard contract which the Plan constitutes. (In the event of conflict, the Plan text prevails as the primary legal source over the Commentary.)
Similarly, Nordic Arbitration builds on a pragmatic approach to dispute resolution with focus on efficiency and impartiality.
Nordic Arbitration is Nordic Offshore & Maritime Association (NOMA).
There may be some scepticism internationally to a new arbitration forum and a new set of rules. However, in practice, many disputes that have been arbitrated in the Nordics have done so based on loosely agreed principles that have now been reproduced in the ‘Best Practice Guidelines’. The Rules themselves are based on the UNCITRAL Arbitration Rules which are familiar to many. The reference is to three arbitrators, although a sole may also be agreed. A detailed notice of arbitration is recommended although not mandatory.
The parties are expected to appoint the arbitrators (all three) jointly. NOMA Rules require that NOMA is copied in to the appointment so that they receive information on the type of dispute and can consider a suitable arbitrator in case of lack of agreement. The aim is to appoint a diverse Tribunal with complementary competencies. If unable to agree, each party shall appoint one arbitrator and the two appointed shall try to agree on the third arbitrator who will act as chair of the tribunal. In case of default, the party having appointed its arbitrator may request NOMA to appoint the second arbitrator, and/or may request NOMA to appoint the chair.
Note that in arbitrations where the parties are of different nationalities, NOMA shall, unless the parties agree otherwise, not appoint an arbitrator of the same nationality as one of the parties.
An arbitrator considered for appointment is expected to confirm availability within the time frame required, declare possible conflicts of interest and their applicable rates.
There is an immediate commitment to a case management conference (as soon as possible) to agree a timetable, the discovery process is limited and a speedy path to an award is promised. There is power to remove an arbitrator if the arbitrator is not able to prepare for and attend a hearing within a reasonable time.
There is no right of appeal – attractive to some, not to others.
More information is available on the website: https://www.nordicarbitration.org/
There is not yet a panel of independent arbitrators to choose from on the NOMA website. There is no requirement that the arbitrator has to be Nordic or a lawyer although it makes sense to appoint an arbitrator that is familiar with the Plan, its Commentary and marine insurance in the Nordics.
For those overseas that may have concerns about independence and neutrality, there are non-Nordics (including myself) that are very familiar with the Plan and its working who could be appointed under NOMA Rules.
Mediation is always a viable alternative, by agreement. I can also assist with a mediated resolution of a dispute as well as arbitration, as can many other mediators (Nordic or not) that I could recommend.
A floater from The Ocean Cleanup.Pollution of the marine environment by plastic is stoppable and reversible.
We can all use less plastic, we can recycle and we can take our own trash home with us rather than toss it away for someone else to clean up!
Anna Wollin of BIMCO gives a brief summary of the changes in Bimco’s Bulletin, May 2018. Read the full article here
No surprise that London is still the most popular spot for international arbitration for cross border disputes.
According to the 2018 International Arbitration Survey (published by the School of International Arbitration, Queen Mary University of London, in partnership with White & Case), 55% of respondents also predicted London’s appeal would remain unchanged after Brexit. The next most favoured locations were Singapore, Hong Kong and Geneva respectively.
Download the full report published on 9 May:
https://www.whitecase.com/publications/insight/2018-international-arbitration-survey-evolution-international-arbitration
In Lukoil Asia Pacific Pte Limited v. Ocean Tankers (Pte) Limited (“Ocean Neptune”)[2018] EWHC 163 (Comm), on appeal from an arbitration award, the Commercial Court dismissed Owners’ attempt to re-label a demurrage claim as a breach of charter party for loss of time waiting for Charterers orders. Popplewell J. considered the wide definition of demurrage in the charter party went beyond the normal loading and discharging delays and extended to loss of time time waiting for orders. The Charterers Club have published this Bulletin: https://www.themecogroup.co.uk/charterers-liability-insurance/publication/demurrage-time-bars-revisited/.
Sound advice from Louis Shepherd at Gard on switching BLs: there are often legitimate commercial reasons to switch bills of lading and it is possible to solve without delay or dispute. Just needs some sensible dialogue and understanding of the issues. Read the full article from Gard here.
Interview of Ian Gaunt, President of LMAA, by Lloyds List on 31 January 2018:
Speculation that London maritime arbitration awards would become unenforceable in Europe post-Brexit is groundless, LMAA president Ian Gaunt said.
Read the full article here
Sara Gillingham Aukner 