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| 1 minute read

At your service - getting arbitration notices right

In just three months time, on 22 September, BIMCO's proposed new Law & Arbitration Clause will be presented for adoption by its Documentary Committee. 

BIMCO's existing clause continues to serve the shipping industry well and is widely adopted in charterparties and other freight contracts. One of its less well publicised upgrades will come in the form of wording, as yet unseen, to deal with service of arbitration notices. Specifically it will allow the parties to spell out (and therefore agree) how and, critically, on whom arbitration notices must be served when a dispute arises. 

Complications can arise if it is not clear where arbitration notices need to be sent, and by what method, in order to be valid. Technical legal points can be taken to invalidate an arbitration notice, potentially beyond a point in time at which the claim becomes time-barred. If it is made clear in a fixture who is authorised to accept an arbitration notice on behalf of each party, and how any notice must be communicated in order to be legally effective, these risks can be reduced. 

But the new wording will presumably only work if the parties actually provide the necessary information. If it is left blank, the parties are in no better position than under the existing clause. Care will also need to be taken during the negotiation of the charterparty to avoid inserting details from another fixture given the industry's propensity to cut and paste clauses from one charter to another. 

BIMCO’s new Law & Arbitration Clause will address these issues with a provision requiring parties to a contract to clearly identify who are authorised to receive arbitration notices and communication

Tags

transportation, shipping

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