Society of Maritime Arbitrators, Inc.

New York maritime arbitrators, along with the United States District Court for the Southern District of New York, offer an efficient, practical system for fair disposition of maritime disputes.

Practicality

Maritime arbitration panels normally are comprised of one's peers in the industry--commercial people who apply their knowledge and understanding in what are often specialized areas.

The arbitral process encourages practical decisions by commercial people well-versed in such maritime areas as charter parties, vessel and terminal operations, ship sales and purchases, cargo sales and purchases, ship construction and repairs, stevedoring, cargo loss or damage, brokerage, agency, finance, engineering, naval architecture, surveying, salvage, towage, maritime insurance and general average, collisions, liner agreements, management agreements, small craft and offshore drilling, to name a few. Expertise in more obscure or specialized areas is more easily found from such a "pool" of professionals.

Consolidation

Until 1983, unless prejudice could be shown, the Federal District Court for the Southern District of New York, following its Appellate Division, the U.S. Court of Appeals for the Second District, would usually order the consolidation of arbitration proceedings involving similar factual or legal issues arising under separate but related contracts. In order to preserve consolidation, which simplifies the arbitration process, saves time and expense and avoids the possibility of inconsistent results from separate arbitration proceedings, Section 2 of the current SMA Rules provides for the consolidation of such proceedings. Parties, who do not wish to include this provision in their agreement to arbitrate may do so by simply excluding Section 2 of the Rules from their contracts.

Security

One of the most important features of American maritime arbitration is contained in Section 8 of the Act which permits a claimant to obtain security for his claim by arrest or attachment of the other party's vessel or assets, including bank accounts. The courts have confirmed the arbitrators' power to order security. Attachment may be obtained at the start of the arbitration or at any time during its course.

Speed

Speedy and immediate resolution of a dispute is often essential under particular circumstances such as impending bankruptcy of the other party, problems with cash flow, or a contractual crisis requiring immediate disposition to avoid ongoing or catastrophic financial consequences deriving from a breach of contract. Such immediate resolution is usually not available through the court system. New York arbitration panels can easily be formed and briefed so as to render declaratory relief on short notice. In those special instances where time is of the essence, these panels are of invaluable assistance.

Remedies

Arbitrators have various powers which allow them to provide a fair hearing and grant relief to the disputants. Arbitrators have the power to subpoena recalcitrant witnesses and documents and to otherwise order discovery in the same manner as judges. They also have the power to award interest and may, at their discretion, set a rate at an amount which exceeds statutory limits for interest on judgments. Maritime arbitration panels consistently attempt to provide an aggrieved party with full relief by awarding interest at the prime commercial lending rate to businesses during the period in question.

New York arbitrators also have the power to order the parties to bear attorneys' fees, where permitted, and costs of the proceeding in whatever apportionment they consider fair under the circumstances. Under SMA rules, arbitrators are empowered to award attorney fees and party costs whether or not the arbitration clause provides for such relief.

Reasoned Awards

Awards rendered by SMA members are always supported by fully reasoned written opinions which serve as a body of "precedent," indispensable to the maritime community for future commercial conduct. Written awards also provide for a degree of predictability in the outcome of many disputes, even though arbitrators are not bound by precedents.

Finality

Another important benefit of New York arbitration is the finality of the award which is subject to judicial review only under the most limited of circumstances. Courts in New York enforce arbitration awards in a simple summary procedure with the resulting judgment enforceable in the same manner as a court decision.

This finality puts an end to a dispute, frees the disputants from being entangled in years of appellate proceedings and helps contain the expenses of obtaining a final, binding decision.

Enforceability Abroad

Because the United States is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and to the Inter-American Convention on International Commercial Arbitration, awards in arbitrations held in New York are enforceable in any country which is a signatory to these Conventions.

Cost-efficiency

Justice in New York arbitration is swift and final. Such speed and finality can effectively reduce costs, particularly when compared to court proceedings, because the parties do not have to submit to overly lengthy and expensive discovery. The benefits of New York arbitration to the maritime community are many. After more than forty years, the Society of Maritime Arbitrators, Inc. continues to provide an essential service in the adjudication of disputes.