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Monday, June 14, 2021

Maritime Logistics Professional

March 1, 2021

Maritime Arbitration? Read These Recommendations Before You Start

Photo courtesy The Synergy Partner

Photo courtesy The Synergy Partner

Let we get straight to the point. Cases of maritime arbitration are annoying. There are no winners. And yet, unfortunately, it also happens in the maritime sector that maritime companies go to court. Are you also about to start an arbitration? Read these three tips first.

First of all, grab your calculator

Do you disagree with, let’s say, a supplier or even a client? Of course, you are right, but bear in mind that the other party thinks that they are. So, what to do? Go to court and hope for the best? Stop! 

Before starting an arbitration, grab your calculator (preferably together with the other party) and ask yourself the following questions:

  1. What is the financial volume of the contents of the case?
  2. What are the costs of the employees that I need to support the case properly?
  3. Due to the arbitration, how many man-hours (in money) will not be available for other projects?
  4. What are the expected fees of a lawyer?

The follow-up question you should ask as a maritime company: if you subtract B, C and D from A, is there any money left? Usually there isn’t.
Maritime Arbitration Project Management: often overlooked and yet so important

Imagine it does lead to arbitration anyway, what do you need to know? 

Cases of arbitration take a long time and the processes are slow. Second, it is important that you check whether you have sufficient experience to guide an arbitration case because, mind you, your lawyer will not do that for you: he will only support you with the legal aspects of the case. The advice is to hire an experienced entity to, as I call it, handle your maritime arbitration project management. An entity that understands both the complex (technical) maritime and the legal language to ensure that the whole process runs as smoothly and clearly as possible.

You definitely don’t want this: complex and long processes that will cost a fortune.

In order to understand what point D above means, let’s explore how arbitration works and why it takes so long. First, a court must be appointed to review the arbitration. That alone can take months. Obviously the court needs to know exactly what the dispute is about, which is why you, together with maritime legal experts, will have to draw up the exact list of issues. But then the court will rapidly make a decision, right? No, unfortunately not. The court will put maximum pressure on you and the opposing party to still come to an agreement. This agreement can sometimes take years. And yes, your lawyers, the court and the maritime legal experts won’t stop sending you invoices in the meantime. The costs: hundreds of euros per person per hour.

It can be done: success within one day

Above all, it is important to first discuss the dispute with an external adviser who can actually assess the case and advise you within a day on the best route to sail. The Synergy Partner can help in this regard. And in case it does come to arbitration, make sure that your Maritime Arbitration Management is up to date.