Maritime Arbitration as an effective tool in resolving

Maritime Arbitration as an effective tool in resolving cross-border shipping disputes in Sub-Sahara Africa by Andrew Pike, Head of the Ports, Terminals & Logistics Corridors Sector, Durban

MARITIME ARBITRATION AS AN EFFECTIVE TOOL IN RESOLVING CROSS-BORDER SHIPPING DISPUTES IN SUB-SAHARA AFRICA • The shipping industry has a long history of recognising and embracing arbitration as an alternative dispute resolution tool. • Arbitration is well suited for shipping disputes arising from breaches of contract between commercial parties who wish for a speedy resolution before an experienced specialist maritime arbitrator.

OVERVIEW • An introduction to maritime arbitration: The current position in a global context • Why do England Singapore feature in the global context? • The South African experience – Local arbitrations – Foreign arbitrations – Arrest and attachment regime – Enforcement • Some thoughts around the future of maritime arbitrations in sub-Saharan Africa – The possible introduction of a regional cabotage regime – The rise of the off-shore, ports and terminals industries – Review of existing legislative framework – Replication of South African’s admiralty regime? – And what about land-based logistics transport (rail and road)? • Conclusion

1. INTRODUCTION: THE CURRENT POSITION IN A GLOBAL CONTEXT Shipping disputes: • Most shipping contracts are concluded on standard forms, for example: – – – charter parties bills of lading ship building ship management salvage contracts • Many standard form shipping contracts provide for arbitration. • Arbitration offers the advantage of being a neutral and commercial forum, allowing parties to control who is appointed to resolve their disputes.

1. INTRODUCTION: THE CURRENT POSITION IN A GLOBAL CONTEXT BIMCO Dispute Resolution Clause 2015: • www. bimco. org • English law / London arbitration / LMAA • US law / New York arbitration • Singapore law / Singapore arbitration • Or at a mutually agreed place with a mutually agreed law to apply Used in: • Charterparties, ship building contracts, ship management contracts etc • Some bills of lading

1. INTRODUCTION: THE CURRENT POSITION IN A GLOBAL CONTEXT Choice of terms in maritime arbitrations: • London Maritime Arbitrators Association (LMAA): www. lmaa. org. uk • ICC/CMI (Paris) • SMA (USA) • SCMA (Singapore) • LCIA (London) • Africa?

2. WHY DO ENGLAND SINGAPORE FEATURE IN THE GLOBAL CONTEXT? Advantages include… • Trusted, accessible and established precedent based legal system • Well developed body of commercial contract and shipping law • Familiar legal principles • Marine insurance industry • Specialist shipping legal practitioners • Experienced shipping technical and commercial experts • Experienced arbitrators • Courts are generally regarded as independent and impartial • Judges experienced in shipping matters • Anti-suit injunctions • Acceptable neutral middle ground (law and location)

2. WHY DO ENGLAND SINGAPORE FEATURE IN THE GLOBAL CONTEXT? Disadvantages include… • Cost of venue • Arbitrator fees • Solicitor, barrister, expert fees Attempts to keep costs proportionate include… • Costs awards • Small claims procedures • Documents only

3. THE SOUTH AFRICAN EXPERIENCE Introduction • Seldom encounter SA law / SA arbitration other than in terminal and logistics throughput agreements • Occasionally assist with foreign law / foreign arbitration • Section 3 of South Africa’s COGSA allows local cargo interests to bring their claim for loss/damage locally despite exclusive jurisdiction or arbitration agreements • Frequently arrest property in South Africa as security foreign arbitration • Frequently enforce foreign arbitration awards against property in South Africa

3. THE SOUTH AFRICAN EXPERIENCE South Africa’s unique ship arrest and attachment regime • Admiralty Jurisdiction Regulation Act • Defined “maritime claim”: very broad. Almost anything maritime in nature goes • By the arrest or attachment of property belonging to the debtor (in personam) • Or by the arrest or attachment of defined maritime property e. g. a ship or container (in rem) • Arrest or attachment of an associated ship (wider than sister ship arrests) • Security arrest for proceedings contemplated or brought abroad

3. THE SOUTH AFRICAN EXPERIENCE Legislation governing the enforcement of foreign arbitration awards • Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 • Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977 Procedure for the enforcement of foreign arbitration awards • Apply to court + necessary documents • Court has a discretion • Opposition by the counter-party • Made an order of the High Court and enforced as such

3. THE SOUTH AFRICAN EXPERIENCE Further requirement: Ministerial consent • Minister of Trade and Industry • Award arose from an act or transaction connected with the mining, production, importation, exportation, refinement, possession, use, sale or ownership of any matter or material, of whatever nature. Alternative procedure: Maritime arbitral awards • Foreign arbitration award relates to a maritime claim = a maritime claim • Enforced (by arrest or attachment) as with any other maritime claim • Under the Admiralty Jurisdiction Regulation Act

3. THE SOUTH AFRICAN EXPERIENCE The future: A new Arbitration Bill • Recently published International Commercial Arbitration Bill for comment • Incorporates the UNCITRAL model law on international commercial arbitration • New, simpler, framework for enforcement

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA Current position • English law / arbitration (Singapore or US/New York) Sub-Saharan Africa? • Changes to legislative frameworks and court procedures • Increase in commercial bargaining power of African ship and shipping interests

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA The possible introduction of a regional cabotage regime • Africa’s share of ship ownership is 0. 9% of the world’s fleet (measured by gross tonnage) • Liberia has the second largest ship register in the world • Both the African Maritime Transport Charter and 2050 AIMS seek to increase Africa’s share of global ship ownership • Envisage the possibility of an African fleet doing cabotage trade around Africa • The effect may be an increased bargaining power • When negotiating charterparties, bills of lading and other shipping contracts • Choice of law?

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA The rise of the off-shore, ports and terminals industries • Established off-shore industry • Port and terminal infrastructure projects planned or currently underway • Disputes between supply vessels, oil field operators, local port authorities, terminal operators and users etc. • Arbitration in at a specialist African Maritime Arbitration Centre?

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA The establishment of a specialist African Maritime Arbitration Centre? • Convenience of location: Geographic or by volume? • Neutrality of choice • Availability and cost of venue hire • Reliability of telecommunications network • Availability and proximity of experienced arbitrators, lawyers and experts • Visa requirements • Supportive judiciary • Supportive legislative framework • To which courts would parties be entitled to appeal (if at all) the arbitration award? • Merit in developing a set of specialist African arbitration terms? • Reconciling disputes in Francophone countries with those in common law jurisdictions?

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA Review of existing legislative frameworks • Singapore? Replication of South African’s admiralty regime? • Associated ship arrest provisions • Security arrest for anticipated or commenced foreign arbitrations • Enforcing maritime arbitration awards as maritime claims

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA And what about land-based logistics transport (rail and road)? • Take or pay (throughput) agreements in respect of bulk cargoes moving from the hinterland along logistics corridors through seaport terminals • Arbitration?

5. CONCLUSION Encouraging maritime arbitration in Sub-Saharan Africa • Local parties • Cost and practical considerations • Local arbitration clauses • Local arbitration rules • Local enforcement regimes

ANY QUESTIONS?