Starting out

Starting out

IN this issue of the Maritime Advocate you can read how all maritime disputes referred to arbitration in London after January 31, 1997 are subject to a radical restatement of the law as set out in the new Arbitration Act 1996. And the commercial court in London has already been asked to consider two important points - when are arbitrations commenced, and how will the new test for a time extension to start proceedings under the Act be applied?

It is fundamental to establish when arbitration proceedings start, not least because of the need to stop time running under statute or under a contractual time bar provision. It is normal for parties seeking to start arbitration to send a notice to the other party. But what happens when a notice which is clearly intended to start arbitration proceedings is shown to be clearly deficient in some way?

We are indebted to London law firm Richards Butler which has drawn our attention to the case of Vosnoc Ltd v Trans Global Projects, which came before Judge Jack QC in the English commercial court at the end of July. In this case, the one-year time bar for the commencement of arbitration proceedings was about to expire when Vosnoc sent a message to TGP pointing out that, under the contract of affreightment, it was provided that all disputes should be referred to three London arbitrators, adding, "By this letter the dispute between our respective companies is referred to the three arbitrators in London..."

Vosnoc clearly intended to start arbitration proceedings, but apparently made no express request in the notice of arbitration for TGP to do anything. In fact arbitrators were not appointed by the parties until eighteen months after the letter was sent. Vosnoc argued that there was an implied reference to a notice to appoint by its express reference to the relevant clause in the contract of affreightment.

Judge Jack, however, ruled that something more had to be done than to request that the matter be referred to arbitration. A step had to be taken to get the arbitration under way, a step towards the appointment of a tribunal. In doing so, he chose not to follow earlier rulings by, among others, Lord Denning. This, is must be said, would not be a new sensation for Lord Denning.

This decision will have important implications in that it shows a disparity between English law and the UNCITRAL model law, which will not best please parties in other jurisdictions where the model law applies who might fall foul of the English system.

Judge Jack went on to grant Vosnoc a time extension to begin arbitration proceedings under the new test in the Arbitration Act 1996. No longer is there any reference to "undue hardship", as there was in the old Act, as a reason for granting an extension. The Vosnoc decision is not final in this regard, since the courts will consider each case on its own facts. But it has given an early insight into the type of circumstances which are likely to affect the court’s discretion under the new Act.

There will be a sharp learning curve for everybody involved in arbitration under the new Act. There have been substantial changes in the law. But the Act has been well received, not least because there is a clear intent that arbitrators should take the initiative away from the courts where this is practical. And, if nothing else, parties to disputes should be sure that they are starting an arbitration, rather than simply setting in chain a course of events leading to unnecessary delay and an appearance before the courts.

Anything but average

THE forthcoming takeover by Lindleys of the Richards Hogg Group Limited, if approved by the UK Mergers and Monopolies Commission, should prove anything but the average takeover. The consequences are potentially far-reaching. In one fell swoop, upwards of fifty per cent of competitive adjusters could disappear. Both Lindleys and Richards Hogg have significant offices in London, New York, Piraeus, Hong Kong, Singapore, Rotterdam and Seoul. The inevitable amalgamation of offices will leave shipowners with even less of a choice when it comes to adjusters.

While the market capacity may not be there to support large offices manned by expensive expatriots, survival of independent offices manned by skilled locals could become the order of the day. Indeed, it would not be surprising to see the re- emergence of some old names, or a number of a new smaller and more localised firms appearing on the scene. In the current market, big (or even bigger) is not necessarily beautiful.

With the Charles Taylor Group Plc - manager of the Standard P & I Club - behind the new Lindleys/Hogg combination, many brokers may be reluctant to expose their clients to potential competitors, particularly on the P & I side. Hull underwriters may also show a reluctance to approve the appointment of the new group as adjusters where the vessel in question is entered with the Standard Club. Questions of conflict of interest may well arise. Will other P & I clubs, particularly those retaining a quarter RDC cover, wish their members to instruct the Lindley Hogg Group? All these factors may not bode well for the new group. It must be said, though, that by combining the two firms a new tiger has emerged. It may, however, need to get leaner and hungrier in the short term.

It is not surprising, in light of the present state of the adjusting industry, that the proposed Lindleys/Richards Hogg deal cannot be viewed as a run-of-the-mill average takeover. It is one which will impact the adjusting field worldwide and has the potential to generate intrigue in the future.

Another recent reported development is that Vanguard Adjusters will be taking over the management of Manley Hopkins Greece. This follows the establishment of INDECS HELLAS by ex-senior adjusters from Manleys. What happens next?

With hindsight

I AM happy and proud to be a supporting member of the London Maritime Arbitrators Association. One of the rather quirky spin-offs from this is that I get the president’s report each year, together with the minutes of the previous year’s agm. So, earlier this year, I was able to read what had transpired in March 1996 on the subject of ADR. I quote.

"Q Bargate raised the issue of ADR, and what had the LMAA done to encourage it. The president said that really nothing was being done at the moment but he would like to hear from C Aston. C Aston said that there had been very little movement over the last eighteen months...He felt there was a risk in trying to flog a dead horse."

It is easy to be wise after the event, of course, but Lord Wolff this isn’t.

Familiar warning

ELSEWHERE, the LMAA president’s report for this year contains a sound, if familiar, warning. Pointing out that the publication of the names of 24 potential new arbitrators had brought forth little response from appointers, the president warned, "If we are going to maintain our position as the leading centre for maritime arbitration, we must get more shipbrokers, engineers and master mariners into the LMAA. Certain standards have to be met before an applicant is admitted to full membership. Those who have put their names forward meet some but not all of the required criteria. One thing they all have in common is a lack of practical experience of sitting as arbitrators. We must therefore try to ensure that these people secure appointments."

This is good, sound, common sense from the LMAA. You could argue that, if you are good enough, you will make it as an arbitrator, and there are plenty of living examples of that. But maybe things are more competitive now than ever before, and maybe the law firms and the clubs should update their contact directories. Cedric Barclay said there are no slim arbitrators, but he said nothing about there being no young ones.

Speed count

YOU may have noticed some recent adverse comment about the time taken to prosecute a big New York maritime arbitration, with allegations that both sides had been dragging their feet.

There are those who have tried to make some mischief out of this, claiming that London is quicker than New York, and vice versa. There is large element of baloney in all this. In most cases it is not the arbitrators who are responsible for delay, although it might be argued that they could be tougher on wilful slowcoaches. And those who continue to score points for either New York or London, the one over the other, are missing the point. Most arbitrators in New York are no more obsessed with what is happening in London than are London arbitrators continually looking over their shoulders at what New York is doing. Keeping your eye on the hole, and not on the doughnut, just invites the business to go elsewhere.

Justice delayed is justice denied. Arbitrators everywhere have a duty to prosecute disputes with the utmost despatch. They must not, however, be pressured to sign off their awards without proper consideration. One arbitrator told me that this is exactly what happened to him in a recent case. He was unhappy with the haste with which the award was made. Because he is a busy arbitrator, he didn’t have the time to repent at leisure. But he is unlikely to be hurried again.

Silent minority

DISSENTS are often the most entertaining part of arbitrations and court decisions, and it is no secret that there have been people who over the years have earned justifiable reputations - and nice livings - as professional dissenters. Dissenters are entitled to their opinions, as are majorities. But what are we to make of a recent arbitration in which the dissenting arbitrator did not even write an opinion? Had he perhaps listened to his master’s voice, but not wanted to have to explain it, or been too lazy to do so?

Lars orders

AS I am writing this, I see that Lars Lindfelt, the man who has guided the fortunes of the Swedish Club so ably for so many years, is to be a key speaker at the International Union of Marine Insurance conference in Paris, which will be over by the time the Maritime Advocate appears in print. I just wonder if anybody else noticed the rich irony in this news. IUMI has refused Lars permission to attend its conferences as a delegate in recent years, never mind - or perhaps because - he has for a long time been writing a book of direct hull business which has been the envy of many a Lloyd’s underwriter, this in addition to running a P&I club. It seems that Lars had to announce his retirement before he was allowed entry to the tedious IUMI bunfight. Knowing him as I do, I am sure he will enjoy the moment.

Golden rules

A RECENT analysis by the International Transport Intermediaries Club has revealed that delivery of cargo without bills of lading remains the largest single cause of claims against both liner and port agents. This comes as no surprise, of course, and neither does the fact that ITIC says the first golden rule for ship agents is to always to obtain the original bill of lading. But it as well to remember that rules - even golden ones - are there to be broken. I understand that, in the Netherlands for example, the law now allows carriers more freedom as to whether or not they issue a bill of lading at all and, if they do, what they put in it.

This is hardly any comfort to ship agents, whose best interests are in any case seldom if ever in the thoughts of the architects of national legislation. Agents can have their ten golden rules, but they know there is really one rule for them and one for everybody else.

WELCOME to the first issue of the Maritime Advocate. We hope you enjoy it. It is a magazine for the providers of maritime dispute resolution services, and for the people who use those services. There is also, we hope, something to appeal to everybody who has an interest in modern, commercial shipping.

Launching a new publication can be a fraught business. Optimism and hard work were the main ingredients which went into producing this inaugural issue, but reader support will be the only true test of the magazine’s longevity. We are happy to leave that decision in your hands.

The Maritime Advocate is not a vanity publication. We like unglamorous people just as much as we like glamorous ones. Pomade carries no weight in our editorial offices. Nor is this a heavyweight legal journal. You won’t find any footnotes. We leave such matters to other, more worthy publications. We have tried to produce a magazine which is informative, practical and entertaining. And we are relying on you to tell us whether we have achieved that.

Shipping is a truly international industry, as are the support industries which serve it. London and New York are currently the pre-emininent centres for maritime dispute resolution services, but there are many other centres of expertise throughout the world which are quickly growing in expertise, experience and ambition. The Maritime Advocate will reflect that in its pages, with regular coverage from around the world.

We would like to thank all those contributors who have provided either copy or inspiration for this first issue. You will see that our round-up of law cases and arbitrations in Issue One is dominated by London and New York respectively. But there are items also from Japan and Dubai, and we have been promised more from dispute resolution centres around the world for future issues.

We invite law firms and arbitrators everywhere to send us details of their cases and awards. We will treat them carefully, and disseminate them to a wider audience. We are relying on your input to make the magazine a success.

We even live in hope that we may carry some London arbitration awards. In an issue which carries news of the favourably received Arbitration Act 1996, we refuse to believe that a little matter like publication cannot be addressed. It used to be that you could count on the fingers of one hand the number of arbitration centres which shared London’s views on publication. Now it seems you can count them on the fingers of one finger.

We encourage London to take a decision to publish its awards. We took a decision to publish the Maritime Advocate. We are relying on you to let us know if it was the right one.

Eat your words

I AM reliably informed by a US law firm that "recent court decisions have given ISPs the upper hand in the battle against unsolicited commercial e-mail, or ‘spam’." Why spam, for heaven’s sake? In the great lexicon of the world, spam has already been taken. It is a name for a cheap sort of luncheon meat which formed a staple part of my diet when I was growing up. It is especially nice with chips and brown sauce.

I’m sorry, but I will not refer to e-mail as spam. I have already been robbed of too many words I have to come to love. I can no longer describe people as gay, although it is a lovely and descriptive word when used in its original sense. And I can no more tell people who haver incurred my wrath to go and eat coke. I’m blowed if I am going to give up my spam.

Pause for thought

THE trend towards mergers between law firms, large and small, continues apace. Haight, Gardner, Poor & Havens, one of New York’s finest, merged with Holland & Knight of Florida earlier this year. Soon, nobody will remember poor old Poor and Havens. Fine names disappear, Faber & Dumas are subsumed by Corroon, but the world continues to turn, advised by ever-bigger law firms.

So what do lawyers talk about when they are discussing the finer points of a merger? Client profile? Numbers of fee earners? Turnover? Possibly, but we are reliably informed that a good four or five hours was spent in the Haight Holland negotiations discussing commas. The crucial issue was apparently whether there should be a comma after Haight Gardner and before Holland & Knight. I could have told them for nothing.

Commas in proper names are a waste of time. Putting one in Haight Gardner Holland & Knight might serve as a sop to old timers who remember the firms before they merged, but in a few years there will be a whole new generation of people who never knew any different and who will just regard the comma as an affectation. Not that there is anything wrong with affectation. It is a must for some people. But it is not to be confused with punctuation.

Whole articles have been written about the humble comma. The truth is that few people know how to use it. My advice to those who don’t know how to use commas is not to use them at all. Semi-colons, meanwhile, like semi-quavers, should not be used under any circumstances, particularly by lawyers. The world would be a better place without them. Semi-colons, that is.

Numerically challenged

SOMETIMES, things are better left misunderstood. I spend my life in a netherworld, not quite sure of the difference between gross tonnage and gross registered tonnage. I have tried very hard to register the distinction, even going to the extreme of sitting in a darkened room with a vinegar bandage on my head chanting the mantra that the tonnage gurus have tried to drum into me. Nothing works.

The truth is I don’t care enough to take the intelligence on board. And I’m happy that way. I also pondered for thirty years why Sam Cooke would be singing about "dancing with the chicken slacks" before I discovered that the lyrics to Twistin’ the Night Away refer to "the chick in slacks". I still sing it my way.

Similarly, I have held the coats of several people who have engaged in bare knuckle fighting over the question of whether or not the US bankruptcy code should be written as Chapter 11 or Chapter X1. Now we know. According to William Hagendorn, a New York lawyer, it should be Chapter 11. Arabic, not Roman. Mr Hagendorn feels so strongly about the subject that he wrote to a national newspaper about it. They ignored him the first time, and ridiculed him the second.

I am gratified to see that Mr Hagendorn concurs with my thinking on the subject, never mind that my reason for writing Chapter 11 is that I can never remember the Roman numerals for eleven. But I suppose the truth is that, if you’re bankrupt, you don’t give a fig anyway.

On the dial

I HEAR there is a big fuss going on in New York about Manhattan telephone area code numbers. There are now too many phone subscribers to continue using the familiar 212 prefix, and various schemes have been hatched to accommodate a burgeoning Big Apple. At the time of writing, the favourite was a plan to give everybody south of 23rd Street a new area code. This seems uncontroversial unless - like most of the big maritime law firms in Manhattan - you live south of 23rd.

There is some kudos attached to the 212 area code. It seems that, in the days when area codes were first given out, it was prestigious to have one with low numbers. All the phones had rotary dials so, the lower the number, the quicker it was to dial. Hence, Manhattan was very much out of the top box. (The US must presumably have some influence overseas, too, with an international code of 1). So don’t expect the south of the island to sit idly by while it is reprogrammed to a 646 area code. There should - and might yet - be a law against it.

Burning issue

HOLY smoke. It is reported that Carnival is to have the world’s first non-smoking cruiseship. It is called the Paradise. Not for me, it isn’t. More like Paradise Lost, with apologies to John Milton.

Carnival is confident that the Paradise will be a success. There are, after all, plenty of other cruiseships where you can smoke. But what about travelling parties made up of people who smoke and people who don’t smoke? Hard cheddar, I suppose.

There will be those who will deem me guilty of over-reacting. I don’t care. This may be only one little cruiseship, but what it really is is the thin end of the wedge. Mark my words. Shipping is hardly the most innovative industry in the world. Just as atriums quickly became de rigeur on cruiseships, so too will the lack of freedom to smoke. Within months there will be several no-smoking cruiseships, and travel agents will be taking on legions of extra staff to cope with the increased paperwork generated by having special smoking and no-smoking booking forms, the whole process slowed by having to free from police custody those same booking clerks who have been arrested for polluting the air outside thousands of travel agents around the world while taking a much needed pull on their Rothmans to cope with the angst generated by the extra work involved in filling in the new booking forms..

This is not the way forward for the cruise industry. It may work on trains and aeroplanes, but cruise travel is no casual boke into the countryside or headlong rush through the air at five hundred miles an hour. It is - or so I have always believed - a leisurely mode of conveyance, to be savoured on the basis that it is better to travel hopefully than to arrive. Why else bother with it? Banning smoking will achieve nothing, beyond giving power to the international bully.

We can all think of things we would like to ban. I , personally, would like to see cruiseships ban noisy eaters who sit at my table and imitate the sound of a horse eating a pound of cooking apples. Whatever happened to live and let live?

Reeling in the years

IT’S hard to believe, but Jim Davis, head of the International Maritime Industries Forum and arguably the best-known figure in the international shipping industry, is seventy next year. And it is likely to be something of a triple celebration. Jim’s wife will be fifty, and they will have been married for twenty-five years. Jim says he is toying with the idea of throwing a party for all the friends he has made down the years. It will have to be a huge venue.