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Wednesday, 25 May 16
MEDIATION AS A WAY TO RESOLVE DISPUTES IN THE SHIPPING INDUSTRY - LANA JACOBS
 KNOWLEDGE TO ELEVATE
The shipping market is currently experiencing a serious recession with the Baltic Dry Index and Baltic Capesize Index both at record low levels in early 2016. In addition, capesize rates fell to under USD 2000 a day in January 2016. Coupled with the operating expenses for a standard Capesize vessel, which are estimated to be around USD 6 000 a day, this suggests that the majority of vessels are operating at a loss. Industry experts do not expect any major improvement on these numbers over the next year. As a result, fewer ships are also being built and sold.
In January, TradeWinds reported that Asia-to-Europe trade experienced negative growth, as well as those routes linked to China, West Africa and South America. Moreover, lower demand growth is forecast for container shipping, in the region of a meagre 1% to 3%. The forecast is grim and market conditions are challenging for all service providers, especially shipping lines seeking to retain their key clients, bring in sufficient income and ensure that agreements are honoured.
In these conditions, disputes are widespread. It is therefore essential for parties to maintain relationships with key customers and retain business. When service providers are faced with the need to retain key clients, however, they often make a commercial decision to write-off the loss rather than to enforce a contract and engage in costly litigation or arbitration.
The advantages of mediation as a means to resolving disputes in the shipping industry are its speed, cost and flexibility. Its outcome is aimed at obtaining a value-added, future orientated, commercial solution for all parties involved. Mediation is not restricted to a ‘winner-loser’ outcome, but rather envisages a ‘mutual gains outcome’. Furthermore, mediation is without prejudice to any further remedies or future and/ or ongoing litigation.
Jonathan Lux, a London-based barrister and mediation expert with 30 years’ experience as a solicitor at Ince & Co in the field of shipping, is of the opinion that mediation is the future of dispute resolution. Although the shipping industry is a difficult sector to convince, he believes that the benefits of this approach are numerous.
London Maritime Arbitrators Association (LMAA) arbitration, is so well entrenched as the primary method of dispute resolution within the shipping industry, that although parties complain about the inefficiency, expense and inflexibility of the system, they are loathe to take an alternative approach.
This is not surprising as arbitration is such a well-established form of dispute resolution in the shipping industry. In an international context, mediation is not as well established as arbitration. The 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) is the key instrument in facilitating cross-border arbitral awards. The New York Convention has more than 145 signatory countries and imposes an international obligation on state courts of signatory countries to refer parties to arbitration in lieu of state court proceedings and to grant recognition of awards arising out of such agreements. However, there is no comparable cross-border instrument governing mediation proceedings or their outcomes.
In the future, however, mediation is bound to feature more frequently because of the regulatory requirements in the United Kingdom and the European Union. The English Civil procedure rules of 1999 introduced the concept of ‘active case management’ which is defined as encouraging parties to use an alternative dispute resolution procedure. The power of the court goes as far as to order adverse costs despite a litigant being successful at trial, because they had unreasonably refused to follow the court’s suggestion to mediate the dispute. This approach was demonstrated in the case of Dunnet v Railtrack.
Court mandated mediation is also a part of other common law jurisdictions including Australia and Singapore. The European Union has also issued directives in terms of cross-border mediation and consumer mediation, which compels each member state to deal with mediation in national legislation. Germany has recently done so with the introduction of the Act to Promote Mediation and Other Methods of Out-of-Court Dispute Resolution in 2012.
The concept of court sanctioned alternative dispute resolution is not novel to the South African legal system. In fact, the Uniform Rules of Court dictate that in preparation for trial, parties hold a pre-trial conference and complete a minute, to be filed in the court file in preparation for a pre-trial hearing. In the minute, parties must confirm that they have considered alternative dispute resolution including mediation and arbitration. The usual practice is for parties to simply state that alternative dispute resolution is not an option. At present, there is no costs sanction for parties in doing so.
As procedural aspects of the South African legal system tend to develop along similar lines to those of the English legal system, an evolution to court directed mediation or to stricter cost penalties for parties who fail to refer appropriate cases to mediation, seems a likely possibility especially in light of the backlog of civil disputes awaiting trial. At the very least and given the context, it may be prudent for the judiciary and legislature to undertake a serious consideration of court directed alternative dispute resolution.
Most recently, South Africa has tabled the International Arbitration Bill, 2016. The Bill aims to incorporate the model law designed by the UN Commission on International Trade Law as the cornerstone of South Africa’s international arbitration regime. The bill defines the concept of ‘conciliation’ to include mediation and importantly codifies the right to conciliation within the context of an arbitration, providing that parties to an arbitration agreement may refer to dispute subject to such agreement to conciliation provided that the agreement provides for such mechanism. The Bill further incorporates the UNICITRAL conciliation rules should parties wish to engage in the conciliation process.
It is clear that there is a move towards mediation as the preferred form of alternative dispute resolution. The key question is how this can be managed in the shipping industry and how mediation can be incorporated into commercial shipping agreements.
Bowman Gilfillan Africa Group’s Shipping & Logistics Practice will hold a panel discussion on this topic in the firm’s Cape Town office at the end of June this year.
Source: Lana Jacobs, associate, Bowman Gilfillan Africa Group’s Shipping & Logistics Practice
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Monday, 30 May 16
BCI ENDING AT 830 POINTS, DOWN 4.6 PER CENT W/W
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week. The freight market was weak this past ...
Friday, 27 May 16
PET-COKE IMPORTS TO FACE PRESSURE IN INDIA
COALspot.com: An Indian environmental activist moved the National Green Tribunal seeking ban on the use of all forms of petroleum coke, also called ...
Friday, 27 May 16
US COAL PRODUCTION ROSE 2.9% WOW, ACCORDING TO EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.7 million short tons (mm ...
Thursday, 26 May 16
GIANT ORE CARRIERS SET TO PLAY A BIGGER ROLE IN THE GLOBAL SHIPPING FLEET: CHINA EMBRACES VALEMAXES - RICHARD SCOTT
Another phase of the giant ships era is approaching. Chinese shipowners placed orders recently for 30 huge ‘valemax’ ore carriers. Thes ...
Wednesday, 25 May 16
DRY BULK SNP MARKET DISPLAYS SIGNS OF STRENGTH - GEORGE ILIOPOULOS
Only a couple of weeks away from the world’s most prominent maritime event, the market for tankers displays an evident lack of confidence in ...
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Showing 2416 to 2420 news of total 6871 |
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- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Thiess Contractors Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- The University of Queensland
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Ind-Barath Power Infra Limited - India
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- IEA Clean Coal Centre - UK
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
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