Common sense and good faith

IN France, maritime arbitration is part of general arbitration, and is governed by domestic laws and by the New York Convention.

Firstly, arbitration is vested with judicial authority. In France, an arbitration award is a genuine judgment. Arbitration is therefore subject to all legal provisions governing judiciary procedures before the courts, including, for example, the principle of due process, discovery, the independence of the judge and consequently, for the parties, the right to challenge the appointment of an arbitrator, and the rules governing evidence.

Secondly, arbitration itself is subject to legal provisions related to public order. The rules are binding on the parties, whatever the nature of the arbitration. Accordingly, maritime arbitration is strictly governed throughout by compulsorily applicable legal provisions.

French law provides that "...the arbitrator's functions can only be entrusted to an individual body". Thus the Chambre Arbitrale Maritime de Paris (CAMP) exists to organise and supervise arbitration proceedings concerned with disputes involving international maritime trade.

The arbitration rules of CAMP have been drawn up in accordance with the provisions of the New Civil Procedure Code and the fundamental rules of civil proceedings such as the due hearing of both parties before judgment, discovery, independence and the impartiality of the arbitrators.

Since 1995, the rules have included a fast-track arbitration procedure which, in cases of emergency, and provided it is accepted by the CAMP committee, can be used for speedy dispute resolution.

Conciliation rules have also recently been adopted which allow the parties to a dispute the opportunity to reach an amicable settlement without proceeding to arbitration.

Arbitrators make awards in their own names. The names and professions of all arbitrators appear on a published list, which currently includes about eighty entries. These arbitrators are professionals, but they are not professional arbitrators. They either work or have worked in some capacity for companies whose principal activities involve international maritime trade.

There are three principal categories of arbitrator:

• Professionals engaged in maritime trade, including shipowners, charterers, shipbrokers, insurers, cargo agents and forwarders.
• Lawyers, including maritime law professors, inhouse lawyers, attorneys, and judges.
• Technicians, including naval architects, master mariners, and maritime experts.

The diversity of knowledge and skills of each of the arbitrators on the CAMP list means that arbitration tribunals can be chosen to meet the particular requirements of each dispute. In this way, each case is judged by specialists, and decisions are taken on an objective basis. The range of expertise available means that the likes of professional surveyors, for example, are rarely nominated as arbitrators.

Arbitration proceedings are initiated by a request for arbitration lodged with the secretariat of CAMP. After an exchange of statements and documents and the payment by each party of the sum necessary to cover the costs and fees of the arbitration, the arbitration tribunal is appointed. The deposit is calculated according to a schedule annexed to the rules.

The tribunal usually consists of three arbitrators. One is chosen by each party, while the third arbitrator who chairs the tribunal is chosen by the CAMP committee. In exceptional cases, persons not included on the list of arbitrators can be chosen by the parties in disputes of a specific nature,subject to acceptance by the CAMP committee. At the request of the parties, some disputes may be settled by a sole arbitrator.

During the arbitration proceedings, the tribunal holds a hearing which the parties or their lawyers are invited to attend. After the hearing the arbitrators fix the date for the close of submissions and the start of their deliberations, which remain confidential.

The award is normally made within six months of the commencement of the arbitration proceedings, unless an extension is granted by the CAMP president. Having been submitted to the committee, which has the power to suggest amendments to the award or the decision itself without undermining the independence of the arbitrators, the award is immediately served on the parties.

Awards are binding on the parties, who cannot appeal before the courts unless the arbitrators have violated the fundamental principles of the arbitration proceedings or a rule of public law, in which case the parties can request that the award be set aside by a competent court of appeal. The state judicial authority therefore retains some control over arbitration proceedings, although the request for setting aside does not give the appeal court the right to rule on the facts.

Unusually, parties submitting their disputes to CAMP have the opportunity for a so-called 'second degree' examination. In appropriate cases, the CAMP committee can nominate a tribunal of three arbitrators to make a final award within three months of submission of new statements by the parties. This final award overrides the first one, which is then considered null and void.

CAMP considers that this unusual provision provides the parties to a dispute with a guarantee that arbitral justice will be rendered in an objective and independent manner, with each party able to challenge any of the three designated arbitrators.

French arbitrators are largely free of the rules established for the French courts. They may rule according to the law chosen by the parties, so that French arbitrators, for example, may be requested to apply English law if such is the wish of the parties.

Arbitrators are required to refer to the practice of international maritime trade. This represents a major difference compared to the practice adopted in some other leading arbitration centres. French law encourages this approach, and the code of civil procedure states that "the arbitrator should always take into account the customs of the trade". This permits a more flexible type of justice for the parties to a dispute.

The regular publication of summaries of awards enables those who are interested in maritime law and arbitration to follow the evolution of the decisions of CAMP. These summaries are compiled into a casebook which covers almost all aspects of maritime disputes.

Lawyers often refer to the Jurisprudence of the Chambre'. The use of the word 'jurisprudence' might seem inappropriate since the system of arbitration is not comparable in judicial and regulatory terms to, say, the Cour de Cassation, or French Supreme Court. But the use of the term nevertheless reflects the consistent and informed manner in which arbitrators settle maritime disputes.

The parties have a particular interest in the length and cost of arbitration proceedings. CAMP offers relatively speedy proceedings at a reasonable cost. It is often the parties themselves who delay the proceedings, either because they are late in submitting their evidence or because it is in their interests to engage in delaying tactics.

The total cost of an arbitration, including the administration costs of CAMP and the fees of the arbitrators, depends on the total amount of the claims and counterclaims advanced by the parties. A scale of costs for a tribunal of three arbitrators is attached to the rules, allowing the parties to determine exactly the amount required. For example, these costs amount to Frs17,500 for a total claim of 100,000 francs, or Fr79,500 for a million francs claimed, or Fr184,500 for five million francs claimed. In the case of a sole arbitrator, these costs are reduced by sixty per cent.

Disputes normally submitted to arbitrators include the following:

• LChartering of vessels or carriage of goods by sea executed under a contract such as a charter party, booking note, bill of lading etc
• Determination of the amount of freight or disbursements such as demurrage, despatch, deadfreight.
• Shipbuilding, repairs or classification.Casualties at sea, collision, general average, grounding.
• Sale and purchase.
• Ship supply and bunkering.
• Insurance.
• Relationships between ship operators and intermediaries such as ship agents, freight forwarders, stevedores etc.

The activities of the chambre are extremely varied. Statistically, about a hundred requests for arbitration are filed each year. While this does not imply that an equivalent number of awards is made, it does indicate the significant role played by CAMP in the conduct of international maritime arbitration.

French tradition confers primary importance on common sense and good faith. The civil code reflects this well, notably in its reference to the fact that, "In an agreement between the parties to a contract, one must look for their common intention rather than consider the literal meaning of its words".

Such a concept is fine in principle, but it must be kept under tight control so as to avoid it being used as an excuse for carelessness during the negotiation and drafting of contracts. Its strengths are perhaps best appreciated when the alternatives are considered.

In England, for example, strictness and respect for words prevails, often to the detriment of common sense and good faith. Parties to a contract are considered to have perfectly mastered the Queen's English and to know all relevant case law, failing which they will not be understood or excused.

Conclusion

Arbitration decisions naturally differ from venue to venue, with New York, London and Paris capable of handing down differing awards on similar issues. But it is noticeable that several awards published in Paris recently have corresponded to those handed down in other leading international maritime arbitration centres. There is then a definite general tendency in favour of unification of international maritime arbitration. And the Chambre Arbitrale Maritime de Paris will have an important ongoing role to play in that respect.