SPECIAL CIRCULAR: BIMCO Standard Dispute Resolution Clause 2013

In order to reflect the global spread of maritime arbitration centres, Singapore has been added to the BIMCO Standard Dispute Resolution Clause as a named forum. Users now have a choice of forum in London, New York or Singapore, thus covering the main commercial regions of Asia, the Americas and Europe, together with a

further option to agree arbitration in other locations to meet specific party requirements. London remains the default provision where parties fail to nominate a forum from listed alternative options for arbitration. The Singapore Arbitration Clause offers users the choice of applying Singapore or English law as the governing

law of the contract but if neither or both are deleted, English law will apply. Parties should consider the respective implications and suitability of the two systems before making a choice. The arbitration is to be resolved under the Singapore International Arbitration Act (Chapter 143A) and conducted in accordance with the Arbitration Rules of the Singapore Chamber of Maritime Arbitration (SCMA). Procedural issues, which are closely modelled on arrangements in London, cover the appointment of three arbitrators, although parties can agree to the appointment of a sole arbitrator. Where a claim and any counterclaim does not exceed USD 75,000 (or such other sum as may be agreed), the reference will be to a single arbitrator under the SCMA Small Claims Procedure. The opportunity has been taken to amend the current English law/London arbitration Clause to formally incorporate previously recommended wording for references to the LMAA’s Intermediate Claims Procedure. The procedure can be applied where a claim exceeds the sum agreed under the LMAA’s Small Claims Procedure, but is not more than USD 400,000, or other agreed figure. In relation to the New York option, the text concerning the Shortened Arbitration Procedure of the Society of Maritime Arbitrators Inc. currently links the applicable procedure to the date when arbitration is commenced. It has, however, been pointed out that the operative version of the Procedures is that in effect at the time of entering the contract and not when the arbitration is commenced. The wording has been adjusted accordingly. Parties agreeing forums other than one of the three named locations are reminded that it is important to identify both the governing law of the contract and the forum where the dispute is to be resolved. Each of the clauses includes an option, after the commencement of arbitration, to refer part or all of a dispute to mediation. Nevertheless, procedures might vary from one jurisdiction to another and users should establish whether time limits are interrupted or any other potential implications. The full text of the revised BIMCO Standard Dispute Resolution Clause is attached. It is available to download free of charge from BIMCO’s website at www.bimco.org and is also available to users of BIMCO’s online charter party editing system, IDEA2, via the Clause Manager.

BIMCO Standard Dispute Resolution Clause 2013

(a) *This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in

connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any

statutory modification or re‐enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current

at the time when the arbitration proceedings are commenced.

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and

send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator

within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the

other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified.  If the

other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified,

the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party,

appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be

binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a

sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 (or such other sum as the parties

may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time

when the arbitration proceedings are commenced.

In cases where the claim or any counterclaim exceeds the sum agreed for the LMAA Small Claims Procedure and neither

the claim nor any counterclaim exceeds the sum of US$400,000 (or such other sum as the parties may agree) the

arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure current at the time when the

arbitration proceedings are commenced.

(b) *This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the

Maritime Law of the United States  and any dispute arising out of or in connection with this Agreement shall be referred to

three (3) persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen;

their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgment may be

entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the

rules of the Society of Maritime Arbitrators, Inc.

In cases where neither the claim nor any counterclaim exceeds the sum of USD 100,000 (or such other sum as the parties

may agree), the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of

Maritime Arbitrators, Inc.

(c) *This Contract shall be governed by and construed in accordance with Singapore*/English* law.

Any dispute arising out of or in connection with this Contract, including any question regarding its existence, validity or

termination, shall be referred to and finally resolved by arbitration in Singapore in accordance with the Singapore

International Arbitration Act (Chapter 143A) and any statutory modification or re‐enactment thereof save to the extent

necessary to give effect to the provisions of this Clause.

The arbitration shall be conducted in accordance with the Arbitration Rules of the Singapore Chamber of Maritime

Arbitration (SCMA) current at the time when the arbitration proceedings are commenced.

The reference to arbitration of disputes under this clause shall be to three arbitrators. A party wishing to refer a dispute to

arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the

other party to appoint its own arbitrator and give notice that it has done so within fourteen (14) calendar days of that

notice and stating that it will appoint its own arbitrator as sole arbitrator unless the other party appoints its own arbitrator

and gives notice that it has done so within the fourteen (14) days specified. If the other party does not give notice that it

has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the

requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the

other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by

agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a

sole arbitrator.

In cases where neither the claim nor any counterclaim exceeds the sum of USD 75,000 (or such other sum as the parties

may agree), the arbitration shall be conducted before a single arbitrator in accordance with the SCMA Small Claims

Procedure current at the time when the arbitration proceedings are commenced.

*Delete whichever does not apply. If neither or both are deleted, then English law shall apply by default.

(d) *This Contract shall be governed by and construed in accordance with the laws of the place mutually agreed by the

parties and any dispute arising out of or in connection with this Contract shall be referred to arbitration at a mutually

agreed place, subject to the procedures applicable there.

Notwithstanding Sub‐clauses (a), (b) or (c) above, the parties may agree at any time to refer to mediation any difference

and/or dispute arising out of or in connection with this Contract.

(e) In the case of a dispute in respect of which arbitration has been commenced under Sub‐clauses (a), (b) or (c) above,

the following shall apply:

(i) A party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation by

service on the other party (or parties) of a written notice (the “Mediation Notice”) calling on the other party (or

parties) to agree to mediation.

(ii) The other party (or parties) shall thereupon within fourteen (14) calendar days of receipt of the Mediation Notice

confirm that they agree to mediation, in which case the parties shall thereafter agree a mediator within a further

fourteen (14) calendar days, failing which on the application of either party (or parties) a mediator will be

appointed promptly by the Arbitration Tribunal (“the Tribunal”) or such person as the Tribunal may designate for

that purpose.  The mediation shall be conducted in such place and in accordance with such procedure and on such

terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.

(iii) If the other party (or parties) does (do) not agree to mediate, that fact may be brought to the attention of the

Tribunal and may be taken into account by the Tribunal when allocating the costs of the arbitration as between the

parties.4

(iv) The mediation shall not affect the right of either party (or parties) to seek such relief or take such steps as it (they)

considers (consider) necessary to protect its (their) interests.

(v) A party (or parties) may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall

continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account

when setting the timetable for steps in the arbitration.

(vi) Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred in the

mediation and the parties shall share equally the mediator’s costs and expenses.

(vii) The mediation process shall be without prejudice and confidential and no information or documents disclosed

during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law and

procedure governing the arbitration.

(Note: The parties should be aware that the mediation process may not necessarily interrupt time limits.)

*If this Clause has been incorporated into the Contract without an express choice of law and arbitration forum chosen from

sub‐clauses (a), (b), (c) and (d), then sub‐clause (a) of this Clause shall apply. Sub‐clause (e) shall apply in all cases.

Grant Hunter

Chief Officer Legal and Contractual Affairs

BIMCO

21 December 2012

E‐mail: documentary@bimco.org