VOLUME 36 JANUARY 2005 NUMBER 2
THE PRESIDENT'S CORNER
Welcome to 2005 which will see the Society's participation in a number of events:
January 27-28 - Maritime Arbitration in New York - A two day course taught by Professor Jeffrey Weiss, sponsored by the Society of Maritime Arbitrators, The Yale Club, 50 Vanderbilt Avenue, NYC
February 3 - A Primer on Conducting Arbitrations with the SMA - An introduction to the SMA Rules and a mock arbitration, co-sponsored by the Admiralty and Maritime Law and the Arbitration and ADR Committees of the New York County Lawyers' Association (NYCLA), The Arbitration and ADR Committee of the Maritime Law Association (MLA) and the Society of Maritime Arbitrators (SMA); NYCLA, 14 Vesey Street, NYC
February 17 - Dispute Resolution: The New York Arbitration Alternative - An in depth review of New York arbitration and mediation practice and procedure highlighted by a mock arbitration, sponsored by Poten & Partners and New York Law Firms, The Warwick Hotel, 5701 Main Street, Houston, Texas
February 20-23 - The PALERMO SENATOR Scenario - Mock Arbitration - New York arbitral practice and procedure under the SMA Rules, Panama Maritime VII World Conference & Exhibition, Riande Continental Hotel, Panama City, Republic of Panama
March 10-11 - A Comparative Analysis of Mexican/US Law & Practice - An introduction to New York arbitration with a mock arbitration, sponsored by the Mexican Maritime Law Association, Society of Maritime Arbitrators and New York admiralty firms, The Las Hadas Golf Resort & Marina, Manzanillo, Mexico
May 8-9 - BIMCO Seminar on Tanker Practice & Procedure - Alternative Dispute Resolution with a mock mediation, New York City venue to be announced
For further details contact the SMA website at www.smany.org.
Please also plan on joining your friends and colleagues at the SMA luncheons on January 12th, February 9th, March 16th and April 13th.
With best wishes for a happy, healthy and prosperous New Year,
David Martowski
MARITIME ARBITRATION IN
NEW YORK - A COURSE
The Society of Maritime Arbitrators, Inc. recently was pleased to announce a two day course to be presented at the Yale Club, 50 Vanderbilt Avenue, New
York, NY on January 27 and 28, 2005. Consistent with its charter as an educational organization, the SMA is offering this two day program to help further
and promote the fair, just, ethical and cost efficient resolution of charter party and other maritime contract disputes via arbitration in New York. Jeffrey
Weiss, Esq., Professor of Maritime Law at New York Maritime College, who has over 20 years of college and graduate level teaching experience, will be the
lead instructor. Members of the SMA will assist in discussing selected topics. Course content will include:
* Arbitration Overview, Commencing the Arbitration, the Federal Arbitration Act and SMA Rules
* The Arbitration Award: Interim Awards; Final Awards; Majority Decision; Dissenting Opinions
* Confirmation, Vacatur and Enforcement of Award
* Panel Members and Ethical Considerations
* Discovery in Aid of Arbitration
* Hearing Procedures
* Security in Aid of an Award
* Evidentiary Considerations in Arbitration, the Federal Rules of Evidence and Related Issues
* Time Bar, Defaults and Consolidation of Arbitrations.
This course will be especially valuable to professionals in the shipping business who are users of the maritime arbitration process. Attendees from shipowners, chartered vessel operators, maritime claims adjustors, insurers, traders and export/import companies should find the course an efficient way to gain an understanding of the current practices in New York maritime arbitration proceedings.
The course will also be uniquely beneficial to newly admitted maritime attorneys or lawyers with less than two years practice or those seeking a more comprehensive understanding of the process. (Application for CLE accreditation of this course in New York is currently pending.)
Please communicate with the SMA for application and registration information. Address, telephone numbers and other contact details may be found at the
end of each issue of THE ARBITRATOR.
MISDECLARED CARGOES
By Captain James J. McNamara
Intentional misdeclaring of cargoes is not a new phenomenon. It has gone on for ages. The practice can be intentional or accidental. It can occur in the container, dry bulk, liquid bulk and even the break bulk trades. If cargo is intentionally misdeclared it can be done for many reasons. In the past, the usual reason was to obtain a cheaper freight rate, or insurance premium. Although that was not an innocent deed, it was far less serious than avoiding a safety consideration, or worse yet, a security consideration. While misdeclaring cargoes is not new, the liability of the practice is. Courts and insurance companies, via subrogation, are recognizing the shippers' (and their agents') traditional responsibilities of properly declaring cargoes. Additionally, a Customs Official recently mentioned to me that Customs views misdeclared cargoes as being smuggled, and those persons involved as smugglers.
Cargoes were misdeclared for hundreds of years, but it wasn't until the days of prohibition when alcoholic beverages were being manifested as olives (in barrels) or other various innocuous commodities shipped in drums or barrels that the public became aware of the practice. Then beginning in the 1960's we heard about drug smugglers hiding their consignments in a whole array of innocent cargoes, diverting attention from their forbidden commodity.
As time went on, we entered the age of unitization and then containerization. The Non-Vessel Operating Common Carrier (or NVOCC) was born. This group acting as a cargo or freight consolidator in ocean trades buys space from a carrier and sub-sells it to smaller shippers. The NVOCC issues Bills of Lading, publishes tariffs and otherwise conducts itself as an ocean common carrier, except that it will not provide the actual ocean or intermodal service. Thus, yet another party is added to the chain of responsibility in a shipment possibly obscuring the original shipper or contents of a shipment.
One simple way used to misdeclare a shipment was through the use of descriptive but vague terms such as household goods, oil well supplies, building materials, machine parts, or even freight, all kinds. One example of the practice, very common in the 1970's, was the use of the term "oil well supplies." Most every ship leaving the ports of New Orleans and Houston had on their manifest, and carried, "oil well supplies." This term frequently included drilling mud, vehicles, explosives, alcoholic beverages, hair spray, pipe, lube oil and even drums of gasoline. It should be noted that all of those named items were actually used by the personnel while drilling for oil. Consolidators in order to expedite shipments utilized such terminology to excess until the 1980's. Various authorities and administrations such as the U.S. Coast Guard, and the International Maritime Organization acted prohibiting the use of these general terms for reasons relating to safety of carriage (such as firefighting). Now at least this practice is no longer prevalent. However, with the tremendous increase in imports to our country coming from a growing number of underdeveloped countries, there are far more means of and reasons for misdeclaration. It is quite common in the dry bulk trades, and particularly in the carriage of bulk metal commodities. Such cargoes are frequently given names which are not listed in the IMO Code of Safe Practice for Solid Bulk Cargoes. This international code describes all bulk commodities, details the risks of carriage, and recommends practices and procedures for their safe carriage. When a cargo is being fixed for a ship, the ship owner, charterer or ship master will research the characteristics in the IMO publication to determine any hazard or characteristic which may require special care. If the cargo is not listed, the assumption will be "there is no risk." Then the cargo will be loaded aboard. Should the cargo emit hydrogen when wetted, such as the case with Direct Reduced Iron, an explosion may result. This has occurred a number of times recently resulting in loss of life. Rather than the cargo being declared and loaded under the IMO requirements for Direct Reduced Iron, the cargo was declared under the alias names of Orinoco Iron Remet Fines, Metallic HBI Fines, Remet Fines, Orinoco Iron Remet, Hot Briquetted Iron Fines, Metallized Fines or even Iron Sands.
Other cargoes may be subject to liquefaction and must be tested by a laboratory to determine a moisture content. Should the laboratory falsify the test to the advantage of the shipper, the ship will be at risk and be subject to shifting cargo and capsize. This occurred recently in a U.S. port and the ship sank in the North Atlantic. Should a falsified certificate accompany the documentation of a cargo, the cargo is misdeclared.
Since September 11, 2001 our government has been most concerned with containerized cargoes, and their potential for aiding the terrorist. Containerized cargoes have always presented an easy opportunity for misdeclaring or smuggling cargoes into or out of a country as the contents are shipped in a sealed metal box. With the emphasis on "just in time delivery" and the constant pressure of speed in delivery, security in this mode of transportation has become a major concern for us all, and there are no easy answers.
Although misdeclared cargoes have always been a reason for concern for the safety of the ship's crew, the ramifications in today's world make this issue a threat to the security of the nation.
(Captain McNamara is President of the National Cargo Bureau. He delivered the foregoing at the November 17, 2004 SMA luncheon. He augmented his
presentation by detailing a number of examples of misdeclared cargoes and their disastrous results.)
RECENT CASES
ADMIRALTY JURISDICTION
David Martin-Clark recently posted another interesting Court decision on his website - DMC's CaseNotes at http://www.onlinedmc.co.uk In this important decision, the United States Supreme Court held that the United States Federal maritime law, not state law, governs disputes arising under a multi-modal ocean bill of lading which includes a "substantial" maritime leg, irrespective of whether the carriage also includes a substantial over-land carriage and irrespective of the leg of the voyage on which the claimed damage occurred.
The Court held that claims arising under multi-modal ocean bills of lading are not "inherently local" such that state law should govern. Applying Federal
maritime law, the Supreme Court concluded that defendant rail carrier was covered by Himalaya Clauses contained in two multi-modal bills of lading issued
in respect of the subject cargo and thus was entitled to the US Carriage of Goods by Sea Act 1936 (COGSA)'s US$500 per package limitation of liability in
respect of damage to a cargo of machinery which occurred as a result of a train derailment on the final leg of the delivery. In so doing, the Court held that, for
the narrow purposes of accepting limitations of liabilities in the bill of lading, at least, the cargo interests were bound by the terms in the bill of lading of the
actual carrier through the agency of the contracting carrier.
Facts
As Justice O'Connor aptly observed in the Court's opinion, "this is a maritime case about a train wreck." Kirby, an Australian manufacturing company, sold ten containers of machinery to a General Motors plant located outside Huntsville, Alabama. Kirby hired International Cargo Control (ICC) to arrange for delivery. ICC issued a through bill of lading to Kirby designating Sydney, Australia as the port of loading, Savannah, Georgia as the port of discharge, and Huntsville, Alabama as the place of delivery. The ICC bill incorporated the COGSA package limitation in respect of the sea leg and, for the land portions of the carriage, adopted the Hague-Visby limitation of liability.
ICC in turn arranged for carriage through Hamburg Süd, and Hamburg Süd issued a bill of lading to ICC which also designated Sydney as the port of loading, Savannah as the port of discharge, and Huntsville as the ultimate delivery destination. The Hamburg Süd bill also incorporated COGSA's package limitation and extended the application of that limitation to all portions of the carriage, whether at sea or on land.
Both bills of lading contained Himalaya Clauses. The ICC bill provided that the limitations of liability in the bill would apply in respect of claims against "any servant, agent or other person (including any independent contractor) whose services have been used in order to perform the contract." The Hamburg Süd bill was worded slightly differently and extended the benefit of its liability limitation to "all agents … (including inland) carriers … and all independent contractors whatsoever."
Hamburg Süd contracted with Norfolk Southern Railroad to transport the machinery from Savannah to Huntsville. During this leg of the carriage, the train derailed causing US$1.5 million in damages. Kirby sued Norfolk Southern in the District Court for the Northern District of Georgia, and Norfolk Southern subsequently applied to the court to limit its liability to US$500 per container pursuant to the Hamburg Süd bill or, alternatively, to the somewhat higher Hague-Visby limitation in the ICC bill. The District Court granted the motion, but the Eleventh Circuit Court of Appeals reversed the District Court decision, holding that the Himalaya Clause in the ICC bill did not extend to parties, such as Norfolk Southern, who were not in privity of contract with ICC and that, in any event, the clause was not broad enough to cover inland carriers. The Eleventh Circuit further concluded that the Hamburg Süd bill's Himalaya Clause was not binding on Kirby because ICC could not be construed as having been acting as an agent for Kirby when it obtained the Hamburg Süd bill.
Judgment
The Supreme Court first considered the issue, raised by Kirby, of whether the claim was governed by Federal maritime law or by state law. The Court concluded that the bills of lading were maritime contracts "because their primary objective is to accomplish the transportation of goods by sea from Australia to the eastern coast of the United States." The court acknowledged that the bills called for some performance on land but concluded that "under a conceptual rather than spatial approach, this fact does not alter the essentially maritime nature of the contract." In sum, the Supreme Court concluded that only where a bill of lading's sea components are "insubstantial" will it not be considered a maritime contract.
The Court further considered whether the case was "inherently local" such that state law should nevertheless apply. In concluding that the Federal maritime law should apply, the Court observed "our touchstone is a concern for the uniform meaning of maritime contracts like the ICC and Hamburg Süd bills."
Turning to the merits of the dispute, the Supreme Court first considered the ICC bill of lading. Rejecting the Eleventh Circuit's strict construction of the ICC Himalaya Clause, the Court concluded that the natural meaning of the language in this bill was to extend the limitations of liability to "any" party whose services contributed to the performing of the contract. Given that the contract called for delivery of the cargo at Huntsville, an inland city, the Court concluded that the parties must have anticipated that an over-land carrier's services would be necessary for the contract's performance. Thus, the Court concluded, it was clear that a railroad such as Norfolk Southern must have been an intended beneficiary of the ICC bill's "broadly written Himalaya Clause."
Turning to the Hamburg Süd bill, which extended COGSA's limitation of liability to the land portion of the carriage, the Supreme Court rejected the Eleventh
Circuit's strict reliance on agency law principles to determine the question of whether Kirby should be subject to the limitation of liability in the Hamburg Süd
bill issued to ICC. The court acknowledged that "the traditional indicia of agency, a fiduciary relationship and effective control by the principal, did not exist
between Kirby and ICC." Nevertheless, the Court concluded, for the narrow purpose of contracting for liability limitations with carriers downstream, it was
appropriate to hold that an intermediary binds a cargo owner to limitations of liability contained in contracts between the intermediary and the ultimate carrier.
This was appropriate, the Court held, for three reasons: (1) a limited agency rule tracks industry practice; (2) if liability limitations negotiated directly with
cargo owners were reliable whereas limitations negotiated with intermediaries were not, carriers likely would charge higher rates to intermediaries; and (3) the
result is equitable because Kirby retains the right to sue ICC for any loss that exceeds the liability limitation to which they agreed (i.e., here the difference
between the COGSA package limitation and the somewhat higher Hague-Visby limitation contained in the ICC bill). Thus, the Court held, Norfolk Southern
was entitled to limit its liability to US$500 per package (which in this case was the container) pursuant to the Hamburg Süd bill of lading.
Mr. Martin-Clark's Comment
This decision is significant for at least three reasons: (1) it broadens and clarifies the application of the Federal maritime law to all bills of lading involving
multi-modal transportation which includes a "substantial" maritime leg; (2) it makes clear that Himalaya Clauses in bills of lading are subject to the same rules
of construction as other contract terms and should be enforced if a plain reading of the language indicates that it was intended to apply in a given situation; and
(3) it makes clear that an intermediate carrier or NVOCC can bind the shipper to the actual carrier's limitation of liability contained in its bill of lading.
Case note contributed by Thomas H. Belknap, Jr., partner at Healy & Baillie, LLP in New York. Healy & Baillie are the International Contributors to the site
for the USA. (You can access the case notes at http://www.onlinedmc.co.uk where you will find the cases listed. Click on the name of the case and that will
take you directly to the case note.)
MISDIRECTED CARGO
David Martin-Clark recently uploaded another COGSA case note on the website DMC's CaseNotes @ http://www.onlinedmc.co.uk
Summary
The New York City Civil Court granted summary judgment against an insurance company pursuing a subrogated claim against a container line. The insurer
sought damages for the line's misplacement of a New York-bound shipment of doors and windows from Germany. The shipping company had represented to
the cargo owner that its shipment could not be located and had been apparently stolen, but it later located the cargo and delivered the shipment in good
condition. The court ruled the carrier's failure to unload the container at New York and its on-carriage of the container to Japan and back was not an
unreasonable deviation because the carrier's actions were not undertaken voluntarily. The court rejected the insurer's claim for negligent misrepresentation on
the ground that the shipping company owed the cargo owner no duties except those created by and arising out of the shipping contract, a bill of lading.
Moreover, the court found that the alleged negligent misrepresentation was not a misrepresentation in the first instance because the shipping company had
never definitely advised the cargo owner that its container had been "stolen."
Background
On February 9, 2000, Tischler und Sohn ("Tischler") contracted with Orient Overseas Container Line, Ltd. ("OOCL") for the carriage of a container of custom doors and windows from Germany to New York. The shipment arrived in New York on February 17, 2000, but OOCL was unable to locate the container. After repeated searches failed to unearth the missing cargo, OOCL advised Tischler on February 29, 2000, that it appeared the shipment had been stolen, but that it would delay reporting the theft to the authorities until an additional twenty four hours had elapsed. Tischler gave the carrier a preliminary notice of claim on March 5, 2000. Apparently, the container was never actually reported stolen to the authorities.
On March 24, 2000, the container was located: it had not been unloaded in New York but had instead traveled first to Japan and then to California. When the container finally was discharged in New York its cargo was apparently undamaged. No claim for cargo damage was presented in the suit against OOCL.
Fireman's Fund Insurance Co. ("Fireman's Fund"), as subrogee of Tischler, brought an action against OOCL claiming damages resulting from the delayed
delivery. OOCL applied to the court for summary judgment on the ground that the bill of lading provided no particular delivery time and, further, that it had
disclaimed any liability resulting from delay. Fireman's Fund argued that OOCL could not disclaim damages for delay because it had unreasonably deviated
from the contract voyage. Fireman's Fund also claimed that OOCL's February 29 statement (that the container was apparently stolen but that OOCL would
wait to report the theft to the authorities) was a negligent misrepresentation sufficient to create a liability in tort, and it applied to the court for summary
judgment on this ground.
Judgment
Judge Eileen A. Rakower of the New York City Civil Court ruled that Fireman's Fund was not entitled to recover damages under the unreasonable deviation concept. An unreasonable deviation "must be both voluntary and intentional" and there was "no allegation" of voluntary deviation in the ship's route. Instead, the facts of the case indicated the container had been inadvertently left on the ship and carried on to subsequent ports, until it was found and returned to Tischler. "It is obvious . . . that [OOCL] had no intention of diverting the cargo, and indeed was actively searching for it. Thus, there was no unreasonable deviation within the meaning of COGSA."
As to Fireman's Fund's negligent misrepresentation claim, the court ruled that Fireman's Fund had "failed to identify an independent duty on which to base its tort claim." Instead, "the parties' legal duties and correlative responsibilities arose entirely from" the contract for carriage. Because OOCL owed no duties beyond those contained within the Tischler-OOCL contract, Fireman's Fund (as Tischler's subrogee) could not "circumvent the provisions of the contract" by recovering under a tort theory.
Even though the court had ruled that the claim was not tortious, it nevertheless analyzed the merits of Fireman's Fund's negligent misrepresentation allegation.
Judge Rakower ruled that the statement was insufficient to create such liability because "there is nothing to indicate that [OOCL] definitely told Tischler that
its container was stolen." OOCL's communications on the matter "remained equivocal" until OOCL advised Tischler that its container had been located and
was being returned to New York. The court stated "the statement that the carrier was requesting 24 hours before taking further action was not alleged to be
false" and thus could not give rise to a cause of action for negligent misrepresentation.
Comment
This decision presents an unusual twist on the "unreasonable deviation" doctrine. Here, although the container clearly was diverted by the carrier from its
intended route of carriage, the carrier's lack of subjective knowledge that the container was in fact being carried on to Japan--and, thus, its lack of
"voluntariness" in that particular act of carriage--was sufficient to defeat the shipper's claim. In this way, it illustrates the subjective nature of the doctrine's
"voluntary" requirement.
Case note contributed by David Jensen of the firm Healy & Baillie, LLP in New York. Healy & Baillie are the International Contributors to the site for the United States.
(You can access the case notes at http://www.onlinedmc.co.uk where you will find the cases listed. Click on the name of the case and that will take you
directly to the case note.)
BUNKER QUALITY DISPUTES
More Onus on Charterers
On Friday, October 8, 2004 the UK P&I Club circulated the following:
In a recent dispute concerning damage caused to main engines by bunkers, the key defence raised was that the bunkers were on spec. In a finding with important implications for future bunker disputes, the tribunal held that under English law a term would be implied to the effect that any bunkers supplied would have to be of a reasonable general and merchantable quality, reasonably suitable for the particular vessel's engines and reasonably fit for the purpose intended.
Significantly, this is in addition to any obligation to provide bunkers which comply with the express terms of the specification set out in the relevant charter or bunker supply contract.
In this particular case, the tribunal found on the balance of probabilities that the bunkers supplied exhibited poor ignition and combustion qualities and that it was these qualities which caused (or were the principal cause of) the damage to the main engine, thereby constituting a breach of the implied term. The tribunal found that the damage sustained by the vessel's main engine was more likely than not to have been caused by the poor ignition qualities of the fuel supplied. The charterers were therefore found liable not only for extensive engine damage, but also for consequential loss, including loss of time.
The application of this approach will certainly considerably increase the exposure to liability of charterers who are responsible for supplying bunkers to a vessel, particularly in the light of the ignition quality aspect discussed below. They can no longer simply rely on the fact that the bunkers supplied complied with their technical specification: there is a further and more onerous duty to ensure that the on spec bunkers supplied will not cause damage to the particular engine on board the particular vessel.
Charterers' potential liability will remain substantial, even though they are often many times removed in the contractual chain from the ultimate supplier (whose sale contract may, in any event, be subject to a different law and jurisdiction). In addition, charterers' exposure may also be affected by the fact that it is now very tempting for owners to blame any damage to their vessel's main engine on unfit bunkers, knowing that the fact that the bunkers supplied were on spec may not be a sufficient defence.
An aspect of this case of particular interest is that it centred on ignition quality, a property of fuel which is of major importance in diesel engines, affecting the time between injection and the start of the combustion phase.
If the ignition process is delayed for too long a period by virtue of some chemical quality of the fuel, too large a quantity of fuel will be injected into the engine cylinders and will ignite at once, producing a rapid pressure and heat rise and causing associated damage to the piston rings and cylinder liners of the engine.
In many vessels the effects of poor ignition quality are negligible, but in this case the particular engine was nearing its overhaul period and was less resilient than would perhaps otherwise have been the case. It would seem that charterers have to have regard to the susceptibility of the particular engine.
The problem for charterers is that there is at present no standard test for poor ignition quality. Charterers will increasingly find themselves between a rock and a hard place: on the one hand, marine fuel oils may be technically on specification, although actually not fit, and on the other hand owners now have the basis for a legal remedy. Charterers will be squeezed and they may not have the necessary insurance coverage in place, nor be able to seek legal redress down the contractual chain.
So what is the answer for charterers? It would clearly be desirable to have a standardised form of bunker supply contract which places on bunker suppliers the same contractual requirements as those on the parties immediately above them in the contractual chain, but that seems unlikely.
An obvious solution for charterers is to ensure that their contracts down the contractual chain (be it with a bunker broker or the actual supplier), are also subject to English law and jurisdiction, which will afford them the remedy of seeking an indemnity. Furthermore, it will now be essential for charterers to ensure that they inform their immediate contractual counterparts not only of the exact specification of bunkers to be supplied, but also the particular vessel and the particular engine to be supplied (and its overhaul record), expressly placing the contractual obligation on the supplier to ensure that the bunkers supplied are not only within the specification ordered, but also fit for the purpose of the vessel and the engine to be supplied.
Charterers will also have to insist on a widening of the scope of the analysis performed by the bunker analysis agencies employed by owners to include analysis of ignition quality, and such a specification should become a standard specification tested for in any analysis results.
Such analysis can be performed by the Fuel Ignition Analyser currently supplied by Fueltech AS. To achieve this, it is obviously an absolute necessity for
charterers to ensure that the relevant charter parties impose such an obligation upon owners, including an obligation that owners properly satisfy themselves
through their engine manufacturer that the ignition quality exhibited is fit for the purpose of the particular engine on board, both in relation to its specification
and in relation to its particular condition. Such a clause will help charterers to divest themselves of some of the responsibility for ensuring fitness for purpose.
Only then will charterers be able to identify, contain and minimise their exposure, an exposure which has the potential to put them out of business. Finally,
charterers should also investigate what products are available in the insurance market to properly protect them against this sort of liability.
Source of information: Mark O'Neil, (Partner), Stephenson Harwood
SMA AWARDS PUBLICATION POLICY
Several members of the SMA recently had an exchange of views regarding the society's policy not to print awards issued under the auspices of arbitral organizations other than the SMA. The discussion arose from a request by a member that the SMA include an award that he had recently issued as a sole arbitrator. The matter involved a procedure governed by the MLAA Terms.
SMA Board Member A.J. Siciliano, explaining the general policy of the SMA, noted that it has been the long-standing policy of the SMA not to publish awards issued under the auspices or pursuant to a foreign or competing forums. That is the reason why awards of members sitting on AAA, Miami, Vancouver, San Francisco, New Orleans, ICC, Chamber Abitrale, and London panels are not found in the modern SMA Awards Service. For the particular request under consideration, Mr. Siciliano observed that, since it was an MLAA matter under discussion, he cautioned that a separate and potential additional difficulty is the parties' expectations of privacy. The prevailing policy of the LMAA is to not publish awards issued under or pursuant to its auspices. Indeed, the English courts afford such awards and the information derived therefrom an unusually high degree of confidentiality.
SMA Board Member Lucienne Bulow explained further. Under English law, an agreement to arbitrate is considered a private agreement. Awards issued under such an agreement are thought to only concern the parties involved in the arbitration.
Section 22 of the current LMAA Terms states very clearly that, in a situation where the parties have not specifically asked for reasons to a decision with the possible intention of lodging an appeal in court, the arbitrators may issue an outline of the reasons on a confidential basis which is called "privileged reasons." Such reasons are not considered part of the award. This type of an award is not to be shared with any party other than the parties involved in the arbitration.
Recently, the LMAA has tried to stem the criticism of its not publishing its members' awards and has added Section 26 of its current Terms. This section provides that if a tribunal considers that an arbitration decision merits publication and obtains the agreement of the parties to release the award for publication, "the award may be publicized under such arrangements as the Association may effect from time to time." It goes on to state, "The publication will be so drafted as to preserve anonymity as regards the identity of the parties, of their legal or other representatives and of the tribunal."
The LMAA clearly reserves the right to publish decisions made under its Terms and clearly intends to protect the anonymity of the parties, legal and other
representatives and of the tribunal.
SEMINAR IN MEXICO
SAVE THE DATE
The Mexican Maritime Law Association, the Society of Maritime Arbitrators, Inc. New York and select New York admiralty firms are pleased to announce a
two-day seminar on Maritime Law and Arbitration Issues. The seminar will take place at Las Hadas Golf Resort and Marina in Manzanillo, Mexico on March
10 - 11, 2005, preceded by a cocktail reception on Wednesday, March 9, 2005. The program will include a comparative presentation of Mexican/U.S. law on
practice and procedures, marine insurance, offshore operations, security/ISPS, and LNG port development. There will be a presentation of U.S. ADR and an
introduction into U.S. arbitration, followed by a mock arbitration. There will also be an Official Dinner midway through the seminar on Thursday evening,
March 10, 2005. More information will be forthcoming as the plans are developed.
CMA'S MARCH PROGRAM
The Connecticut Maritime Association reports it is always a pleasure to introduce to the market the Connecticut Maritime Association's annual Conference Program. A pleasure because once again a team of industry participants have created a program packed with substance, energy and a schedule designed to maximize your business opportunities. The following link will take you to their show website and the first release of the program:
www.shipping2005.com/confer2005.html
The CMA looks forward to seeing you in Stamford, Connecticut March 21-23 for CMA Shipping 2005 and wish to thank the many professionals who have
contributed so much already to the program and activities. Please don't hesitate to contact them for questions or more information on how you too can participate.
CMA Shipping 2005
One Stamford Landing, Suite 214
62 Southfield Avenue
Stamford, CT 06902
Tel: +1.203.406.0109 Ext 3717
Fax: +1.203.406.0110
Email: conferences@cmaconnect.com
Web: www.shipping2005.com
AWARD DIGESTS 5 & 6
We continue to advise that the INDEX AND DIGEST OF S.M.A. AWARD SERVICE - VOLUME 5 has been digitized into Adobe Acrobat PDF format. A
CD-ROM combining Digests 5 and 6 is available for purchase from the SMA. The files are fully searchable, depending upon the version of Adobe Acrobat
Reader used to access it. As a bonus, the complete SMA website is also incorporated on the CD-ROM which includes the Rules and the Roster of Members.
If you haven't yet gotten your copy simply click on this link:
http://www.smany.org/sma/orderForm.html
Complete the form, copy it and mail it along with your payment to the SMA offices. Please remember, particularly our non-U.S. subscribers, payment must be
made in U.S. funds. We would be happy to provide our banking instructions for wiring payment direct to our account.
HUMOR FOR THE QUARTER
Arbitrators, often faced with the dilemma of reconciling facts and truth, need subjective intuition, not unlike how Ogden Nash must have felt when he wrote:
SAMSON AGONISTES
I test my bath before I sit,
And I'm always moved to wonderment
That what chills the finger not a bit
Is so frigid upon the fundament.
Which often leads to a quandary when awards are to be calculated. Many a counselor adheres to the following Robert Frost theory:
THE HARDSHIP OF ACCOUNTING
Never ask of money spent
Where the spender thinks it went.
Nobody was ever meant
To remember or invent
What he did with every cent.
For THE ARBITRATOR
Donald J. Szostak
djszostak@hotmail.com
Society Of Maritime Arbitrators, Inc.
30 Broad Street, 7th Floor
New York, NY 10004-2402
(212) 344-2400 • FAX: (212) 344-2402
E-mail: info@smany.org