London Maritime Arbitration

Clare Ambrose; Karen Maxwell and Michael Collett KC

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CHAPTER 14 Remedies for delay

A. Introduction

14.1 Delay is generally perceived to be a menace in arbitration. It is contrary to the intended purpose of arbitration, namely speedy and efficient dispute resolution. Delay makes the arbitral process more expensive and can compromise documentary and witness evidence. 14.2 Delay can arise at every stage of an arbitration, the usual causes being a lack of will or resources to progress the arbitration, a deliberate tactical preference for allowing time to lapse, lack of authority to settle or pursue the matter, or difficulties in gathering evidence. The competing commitments of members of the tribunal can also cause delays in dealing with procedural matters, fixing hearings or producing awards. 14.3 Dealing with delays in arbitration was one of the specific objectives of the 1996 Act: as the DAC stated, the avoidance of unnecessary delay in arbitration is a fundamental aspect of justice and, as such, a necessary requirement of a dispute resolution system which is based upon obtaining a binding decision from a third party.1 The provisions of the 1996 Act seek to prevent delays from arising (by placing parallel duties on the parties and on the tribunal to progress the arbitration with expedition) and also to provide remedies when delays do occur. In the context of LMAA arbitrations, there are also contractual provisions (governing timetabling, peremptory orders and the like) which aim to minimise delays. This chapter will seek to examine those provisions (both statutory and contractual) that are relevant in maritime arbitration.

B. Contractual provisions

14.4 The arbitration agreement, or more commonly any applicable arbitration rules, may include provisions designed to address the problem of delay. Usually such terms are designed to prevent delays from arising at all. Where it is known at the outset that an early hearing is essential, the LMAA Terms require the parties to consult and ensure the availability of the

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arbitrator(s) to be appointed by them. Furthermore, where it becomes impossible to fix an acceptable hearing date, the LMAA Terms contemplate reconstitution of the tribunal.2 14.5 Schedule 2 of the LMAA Terms sets out a fairly brisk timetable, to be adhered to by the parties unless the tribunal orders otherwise. Schedule 2 also includes provisions specifically aimed at minimising delays. Supporting documents relevant to the issues between the parties are in most cases to be served with written submissions. Unless it is agreed that the arbitration will proceed on the basis of the written submissions only, the parties must submit signed questionnaires, setting out the nature of the dispute and the necessary evidence.3 After the exchange of questionnaires, the tribunal will generally allow the parties 21 days in which to agree the future procedural course, or to make submissions to the tribunal if agreement cannot be reached.4 An allegation that the claimant has failed to disclose all supporting documents will not normally justify a delay in service of defence submissions (paragraph 2). Similarly, Schedule 2 provides for written witness statements to stand as evidence in chief (paragraph 12) and expressly requires all communications regarding procedural matters to be made expeditiously (paragraph 14). These provisions may be backed by peremptory orders (pursuant to the powers conferred by the 1996 Act) in appropriate cases, and are discussed in detail in . 14.6 Apart from the provisions of the LMAA Terms, it is relatively rare for the parties to agree express provisions conferring specific powers upon the tribunal entitling it, for example, to dismiss a claim in the event of delay. The tribunal’s powers in this respect will, in most arbitral proceedings, derive from the supportive provisions of the 1996 Act rather than from expressly negotiated terms in the arbitration agreement.5

C. The statutory duty of the tribunal and the parties to avoid delay

The nature of the duty

14.7 The 1996 Act places parallel mandatory duties upon the tribunal and the parties to avoid delay in the progress of the arbitral proceedings. Section 33 of the Act requires the tribunal to “adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense”. Section 40 requires the parties to do “all things necessary for the proper and expeditious conduct of the arbitral proceedings”, including “complying without delay with any determination of the tribunal as to procedural or evidential matters, or with any order or directions of the tribunal”. The aim of each of these provisions is to give effect to the central principle behind the Act, expressed in section 1, of obtaining a fair resolution of disputes without unnecessary delay or expense. Sections 33 and 40 are considered in more detail in .

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14.8 Although (as discussed below) the remedies conferred by the Act for breaches of these mandatory provisions are relatively limited, the enactment of sections 33 and 40 has, in practice, helped to reduce delays in maritime arbitrations. Tribunals are empowered to set firm deadlines or timetables and to tailor the procedures of the arbitral reference to avoid any unnecessary delay.

Remedies for breach of duty

Breach of section 33

14.9 The remedies conferred by the 1996 Act for breach of the duties are fairly limited. In the case of a breach by the tribunal of section 33, the remedies available to the parties are removal of the tribunal pursuant to section 24, or (where an award has been made) challenging the award pursuant to section 68. These remedies are available only where “substantial injustice” can be established, and are intended to provide a long-stop.6

In BV Scheepswerf Damen Gorinchen v The Marine Institute,7 Flaux J held that delay in the issuing of an award will not, in and of itself, justify the grant of a remedy under section 68 of the 1996 Act, even if such delay amounts to a breach of the tribunal’s section 33 duty. This is because the delay will not, generally, affect the substantive outcome of the arbitration in any way. It will, therefore, be impossible in most cases to establish any substantial injustice for the purposes of section 68.8 However, Flaux J noted that “… it does not follow that extensive delay, let alone inordinate delay of twelve months in publishing an Award, should be permissible.… If, because of pressure of work, an arbitrator cannot produce an Award for many months, then the solution is take on fewer appointments to ensure that Awards can be produced within a reasonable time of the conclusion of the hearing. Clause 20 of the LMAA terms provides that the Award should: “normally be available within not more than six weeks from the close of the proceedings”. Whilst that is not intended to be an immutable rule, in a normal case, of which this was one, LMAA arbitrators should be aiming to produce Awards in that timescale and certainly not exceeding it to the extent that the arbitrator did in this case.”9

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