Lloyd's Maritime and Commercial Law Quarterly
Problems with and solutions for New York maritime arbitration*
Robert M. Jarvis**
Last year I published an article1 which discussed the problems many parties have experienced in recent years in receiving timely maritime arbitration awards in New York. Because the article was written from the perspective of a lawyer involved in such arbitrations, the article sought to describe the causes of delay2 and steps which could be taken to reduce such delay.3 I would now like to expand my earlier discussion of the problems being experienced by parties who arbitrate in New York. In particular, I would like to focus on the problems which are at the heart of clients’ discontent with New York maritime arbitration.
As is well known, the maritime industry has been in the midst of a serious depression since at least 1980. This state of affairs has already claimed among its victims such once-substantial companies as Waterman, Hellenic, Saleminvest and Sanko. Thus, maritime clients who are still in business are operating in a climate of maximum uncertainty, competition and cost. Many clients are on or near the verge of bankruptcy, and each day is a struggle to survive.
One result of the difficult times in the shipping world is that maritime clients have become extremely critical consumers of legal services. Today they demand a much higher level of expertise at a much lower cost. They routinely scrutinize bills and are not hesitant to insist upon an explanation for the hours charged by an attorney. This demand for service has also been extended to arbitrators, who are beginning to be held to the same standards of performance.
In evaluating arbitrators by this new standard, many clients have found New York maritime arbitrations to be slow, inefficient, and overly expensive. As a result, such clients are settling more cases than ever before and, when unable to settle, are choosing to arbitrate in forums other than New York. Despite these trends, we who make our livings from the holding of maritime arbitrations in New York are not doing enough to make New York a more attractive spot for the holding of maritime arbitrations. In fact, at times we do things which discourage New York maritime arbitrations.
* The following is an edited version of a speech given to the Society of Maritime Arbitrators in New York City on 12 March 1986. Footnotes have been added for the convenience of the reader.
** B.A., Northwestern University; J.D., University of Pennsylvania; LL.M., New York University. The author is a member of the New York and California bars and practises maritime law with the firm of Baker & McKenzie in New York City.
1 Jarvis, “The Problem of Post-Hearing Delay in Maritime Arbitrations: When Did You Say We Would Receive the Arbitrators’ Award?”, 9 Md. J. Int’l L. & Trade 19 (1985).
2 The article suggested that the increase in delayed awards was due to three factors: (1) the concentration of arbitral duties among a small group of arbitrators; (2) the willingness of arbitrators to take on too many appointments; and (3) the issuing of reasoned awards, rather than awards which simply state the outcome. See Jarvis, supra fn. 1, at 37-42.
3 The article suggested that delay could be combatted by: (1) requiring arbitrators to disclose to all parties within 15 days of their appointment their other commitments in order to determine whether the arbitrator had sufficient time to serve; (2) requiring awards to be rendered within 45 days; (3) eliminating reasoned awards unless specifically asked for by both parties; and (4) providing parties with a right to call for expedited arbitration in which awards would have to be rendered within seven days. Jarvis, supra fn. 1, at 56-61.
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