Marie Kelly: Hello, I’m here today with Mr Gaunt who is the President of the LMAA (London Maritime Arbitration Association).
The LMAA is the most popular arbitral institution for maritime arbitrations. Could you just tell us how many arbitrations were commenced last year under LMAA rules.
Ian Gaunt: Well in 2016 our statistics indicate some 2,000 new arbitrations commenced under LMAA Terms involving LMAA arbitrators or members of the bar operating on LMAA Terms.
Marie Kelly: That’s a large number and as I understand it quite a lot of those arbitrations are on a “documents-only” procedure. Could you tell us what the percentage is and also why do you think it is that it’s so popular?
Ian Gaunt: Well some 80% of the awards which are rendered each year, about six hundred awards are rendered so 80% of those, are on “documents-only”. That means there is no hearing. The parties generally prefer to avoid the cost of a hearing unless it is absolutely necessary. Hearings are very costly, they involve counsel and solicitors, they often involve experts and very often witnesses who have to travel in order to participate in the hearing, and it is a very costly process. Also “document-only” arbitrations tend to produce a faster award, it’s a quicker process.
Marie Kelly: That’s quite understandable then.
There’s one other point I wanted to ask you about Mr Gaunt, and that’s about the appointment of emergency arbitrators. You’ve recently changed the LMAA rules but you haven’t included a rule allowing for the appointment of an emergency arbitrator as some of the other institutions have. Why is that?
Ian Gaunt: Well we did consider seriously the possibility of introducing provisions for the appointment of emergency arbitrators. We came eventually to the conclusion that it simply wasn’t necessary and that is mainly because the support given to arbitration in this county by the commercial court and the speed with which applications can be got to the commercial court and the speed with which they are able to act to give interim relief such as injunctions or the freezing of bank accounts.
A second point is that by contrast with many other institutions an arbitral tribunal can be got up and running under LMAA Terms under our ad hoc procedure extremely quickly. It does not take weeks or months to get the arbitration tribunal appointed and the terms of reference agreed.
The third point is there is a good deal of doubt about the status of the orders made by emergency arbitrators as to whether they should be treated as awards for the purposes of enforcement under the New York Convention. There is certainly a strong body of opinion that they are not awards and therefore would not be enforceable, so that if a party goes along to get an award from an emergency arbitrator then they would find that they had incurred the cost of obtaining an order which they simply couldn’t enforce.
Marie Kelly: Thanks very much.
Marie Kelly, a Partner in our London office, talks with Ian Gaunt, President of the London Maritime Arbitration Association (LMAA), about arbitrating under the LMAA Terms and recently introduced amendments to the LMAA Terms 2017.