May, 2021 - LMAA terms and procedures revised
- Date: 04/05/2021
The London Maritime Arbitrators Association (“LMAA”) has recently updated its terms of procedure. The new terms came into effect on 1st May, 2021 and apply to arbitrations started on or after that date.
The LMAA is unarguably the most commonly used forum for arbitrating maritime disputes in England. Its terms govern the procedure of the arbitration reference where the parties have incorporated them into a dispute resolution clause in their contract and/or where the tribunal accept their appointment on the LMAA terms. We discuss this further below.
The new terms are known respectively as the LMAA Terms 2021, the LMAA Intermediate Claims Procedure 2021 and the LMAA Small Claims Procedure 2021. Which terms will apply depends on the value of the claim and what the relevant dispute resolution clause provides.
The updated terms, together with explanatory notes, can be found here
The LMAA explains that the drafting committee’s approach has been “pragmatic and practical”. The intention has been to “update wording to reflect changing procedures and to address specific issues which have arisen in recent years, whilst retaining the flexibility and “light touch” approaches which are characteristic of LMAA arbitration”.
Many of the alterations involve only minor updates, but we draw attention to those others that are of considerable importance and have been made necessary by recent developments.
One is the recognition of virtual and semi-virtual hearings. Not only are these now newly provided for, but a detailed protocol for their conduct is set out in the Sixth Schedule to the new LMAA Terms 2021. The need for remote hearings has of course arisen due to the COVID-19 pandemic but, despite the anticipated return to “normality” in due course, it is likely that they will continue to be utilised in appropriate circumstances. Although they lack the obvious benefits of the normal approach, they have generally been found to be a highly effective replacement. In particular, they offer more flexibility and the potential to reduce costs (and carbon foot prints) by avoiding long-distance travel for the attending parties. In the very international world of shipping, where parties are often based far from London, this can be particularly beneficial. This important initiative by the LMAA is therefore to be welcomed.
Another change concerns witness statements. In particular, the new terms outline that witness statements should, so far as possible, be in a witness’s own words, should be confined to the evidence that the witness can give and should not seek to argue a case. Arbitrators will be able to impose costs sanctions if these requirements are ignored. This move seeks to address a concern that witness statements have become a vehicle for parties to argue their case, rather than their original purpose of simply presenting factual evidence. The new rules also reflect the recent changes to English court procedures relating to witness statements.
Finally, other changes include a procedure for the appointment of arbitrators more rapidly than that provided for in the Arbitration Act 1996; a provision allowing the LMAA President to appoint a replacement arbitrator where an original arbitrator is unable to act but is not replaced by the appointer (thus saving the time and cost of asking the court to make an appointment); and confirmation that awards may be signed electronically.
By way of final general comment, parties intending to adopt the LMAA terms, should consider using a standard form clause to ensure their incorporation into their contracts where required, to avoid uncertainty as to the applicable law and forum for any dispute. For further UKDC commentary on such clauses, please follow these links:
As always if Members have any questions in relation to the above issues, they are invited to contact the Club for further information