The London Maritime Arbitrators Association (LMAA) has released the Arbitration Notice Clause. This clause aims to ensure that notices of arbitration are validly served if the procedure in the clause is followed.
As the North P&I Club says, a case on the London Arbitration, involved the charterer having a complete defence to the owner’s demurrage claim, as the owner had not served the demurrage claim on the charterer.
Namely, owners had served the claim on a broker, who the Tribunal decided was an intermediary broker and not acting for the charterer. After that, it was too late for the owner to serve the claim on the correct party, due to the fact that the claim was time barred by then.
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In addition, Helen Barden, Professional Support Lawyer (FD&D), informed that there were also other cases in 2017, in which arguments were raised that notices of arbitration had not been served on the correct party. As a matter of fact, the Club understands that it was as a result of these cases that the LMAA considered the need for drafting the Arbitration Notice Clause.
Specifically, in the Sino Channel v Dana Shipping case, the Court of Appeal concluded that the person on whom the notice of arbitration had been served had authority to accept service. However, the owner had to spend a significant amount of time time and resources to reach to this decision.
What is more, in the Glencore v Conqueror case, it was decided that the service of the arbitration notice on the particular employee on whom it had been served was not effective service.
If there was a clause in the charterparties in Glencore v Conqueror and the 19/18 arbitration that outlined exactly who should be sent notices and claims, then the claim or arbitration respectively may have been protected. In fact, in the Sino Channel v Dana Shipping case, such a clause could have saved the parties an important amount of time and money fighting the point to the Court of Appeal.
The Arbitration Notice Clause provides for the parties to set out e-mail addresses for the service of notices and communications regarding arbitration and should be completed by the parties when concluding a contract.
Nevertheless, while this clause is specific to notices and communications in relation to any arbitration proceedings, there would be no harm extending this clause, in order to be applied to notices and communications regarding all claims under the charterparty. This would entail communications related to the presentation of demurrage claims and supporting documents.
