Disputes

Maritime arbitration

Published 28 August 2026 · updated 22 September 2026

Shipping disputes are not litigated. They are arbitrated, and overwhelmingly they are arbitrated on documents alone, without a hearing and without anybody giving evidence. Where that happens, under which rules, and how you start it are decided by a single line in the recap that is usually agreed last and read least carefully of anything on the page.

Why arbitration and not a court

Three reasons, and only one of them is the one people give.

Enforcement. The New York Convention of 1958 obliges the courts of its many contracting states to recognise and enforce arbitral awards made in other contracting states, on narrow grounds of refusal. There is no comparable global instrument for court judgments. An award is simply more collectible across borders than a judgment, and the counterparty is usually in another country.

Neither side will accept the other's courts. A Greek owner and a Chinese charterer agreeing to a neutral seat is a negotiation that ends; agreeing to each other's home courts is one that does not.

The tribunal knows the trade. Maritime arbitrators are drawn from broking, shipowning, average adjusting, the clubs and the bar. A tribunal that already understands what a notice of readiness is does not have to be taught, which is a real saving on a dispute that turns on a statement of facts.

Confidentiality is usually cited as well, and it is real, but the absence of a published body of decisions is also arbitration's main drawback for the industry.

The four seats

The ad hoc point is the one that confuses newcomers. Naming LMAA arbitration does not appoint anybody, does not open a file with an institution and does not produce an invoice from a secretariat. The parties appoint the arbitrators themselves and the tribunal runs the reference. That is why it is cheap for small claims and why nothing happens unless a party makes it happen.

Scale, and what it tells you

The LMAA reported 3,469 new appointments under its Terms and Procedures in 2025, across an estimated 2,015 references, with 563 awards published. Eighty-three of those awards followed an oral hearing.

Read the last two figures together. Well over four fifths of awards were made on the documents, without a hearing. That is the most useful fact here for anyone running a desk, because it means the case is the file. There is no cross-examination in which a weak statement of facts is rescued by a persuasive witness. The statements of facts, the notices of readiness, the recap, the bills of lading and the correspondence are the evidence, read cold by people who were not there.

The procedural ladder

Running a small claim on full procedure is how a party spends more on the argument than the argument is worth. The LMAA publishes three tiers, all in 2021 editions taking effect for arbitrations commenced on or after 1 May 2021:

• The Small Claims Procedure, for claims not exceeding 100,000 US dollars, with the limit applied separately to claim and counterclaim rather than aggregated. A sole arbitrator, a capped fee, a documents-only award.
• The Intermediate Claims Procedure, where claims exceed 100,000 US dollars but neither claim nor counterclaim exceeds 400,000, or such other figure as the parties agree. A compressed timetable with costs limits.
• The full Terms, for everything above that.

The tier is chosen in the arbitration clause or by agreement once the dispute exists. Choosing it at fixture, before anyone knows who will be claiming, is the honest moment to do it.

The clause, and what a bare one leaves out

A recap saying only "arbitration in London" has left several things unsaid: the seat and therefore the supervising court, the governing law of the contract, the number of arbitrators, and which procedure applies. Those gaps are filled later by argument or by default rules, both of which cost money.

Two further traps are specific to this trade. Old editions of some standard forms carried no law and arbitration clause at all, which is why one was among the commonest rider additions for decades; naming a form without checking whether it contains a clause is not safe. And incorporating a charterparty's arbitration clause into a bill of lading is not achieved by general words of incorporation under English law: express reference is required, and a bill that merely incorporates all terms of the charterparty will usually not carry the arbitration agreement with it.

Starting a claim, and the deadlines that end them

Commencing arbitration is a specific act, not a state of mind and not a letter complaining about the other side. Under the English regime it is generally done by serving a notice requiring the other party to appoint an arbitrator, or appointing your own and calling on them to do the same. A party who has been corresponding vigorously for months has not commenced anything.

Two clocks run and they are different. The charterparty's own time bar comes first and is usually short: many voyage charters bar a demurrage claim unless it is presented, with its supporting documents, within a stated period after completion of discharge. Behind that sits the general limitation period of the governing law, and behind cargo claims sits the one year bar under the Hague-Visby Rules. Missing the contractual bar ends a good claim without anyone reaching the merits, which is the most common way maritime money is lost.

The court in the background

An arbitration seated in England runs under the Arbitration Act 1996, which the Arbitration Act 2025 amended. The changes worth knowing are practical: an express disclosure duty on arbitrators, a power to make awards on a summary basis, provision for emergency arbitrators, and a revised procedure for challenges to the tribunal's jurisdiction. The court's role is otherwise unchanged and it is a supporting one: interim relief, security, enforcement, and a narrow appeal on a point of law that parties can and often do exclude.

What this means before there is a dispute

Everything above resolves into three habits. Write a complete arbitration clause naming law, seat, rules and tier. Keep the timestamped record, knowing most awards are made from the documents by people who were never at the berth. And diarise the contractual time bar from the date it actually runs from, because that deadline has ended more claims than every substantive argument in this library put together.

References

• London Maritime Arbitrators Association, Statistics of appointments and awards. lmaa.london
• London Maritime Arbitrators Association, The LMAA Small Claims Procedure 2021, 2021. lmaa.london
• London Maritime Arbitrators Association, The LMAA Intermediate Claims Procedure 2021, 2021. lmaa.london
• UK Parliament, Arbitration Act 1996, 1996. legislation.gov.uk
• UK Parliament, Arbitration Act 2025, 2025. legislation.gov.uk
• UNCITRAL, Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), 1958. uncitral.un.org

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