This article has been written by Vikas Kalias Patil, pursuing the Certificate Course in Arbitration: Strategy, Procedure and Drafting from LawSikho.

Introduction

India has a long coastline of 7500 kilometres spanning 9 states and 4 union territories. India has a rich history in marine trade and we can get references of the Indian spice trade with the Roman empire. There were several traders and merchants coming to India for the trade of spices, textile business. In today’s world maritime business all over the world are governed by some regulatory bodies.

Maritime law is also known as admiralty law which is a body of law conventions and treaties which governs private maritime business and other nautical matters, such as shipping or offences occurring on open water. International rules related to the oceans and seas are known as the Law of the Sea.

Maritime law follows a separate code and is mostly separate from national law in many developed countries. The International Maritime Organization (IMO) which was created by the United Nations (UN)  has issued numerous conventions that can be enforced by the navies and coast guards of countries that have signed the treaty outlining these rules.  Maritime law governs insurance claims relating to ships & cargo. Civil matters between shipowners, seamen & passengers are also solved using maritime law. The procedures related to registration, licensing and inspection for ships and shipping contracts are also regulated by maritime law.

Today, there are a large number of conventions regulating almost all aspects of maritime commerce and transport.

Law governing maritime sector in India 

After independence, the government took a keen interest in enacting a mixture of statutes and laws to maintain a strong, efficient and continuously developing trade practices via sea to use untapped potential of long Indian shoreline.  The modern maritime laws are over a century and draw their origin from the colonial era.

Shipping in India is regulated centrally and is completely controlled by the government of India. The government regulates shipping through the Ministry of Shipping.  The Ministry of Shipping has set up a semi-autonomous statutory body for regulating these activities. The power of Directorate General of Shipping (DG Shipping are circumscribed by the Indian Merchant Shipping Act, 1958 (MSA) to deal with all matters relating to shipping policy and legislation, implementation of various international conventions and other mandatory regulations of the International Maritime Organization. The MSA is the main law which deals with merchant shipping. 

The MSA empowers the DG Shipping to promulgate circulars and notifications to deal with all issues relating to shipping. The registration of Indian-flagged vessels, survey of ships and enforcement of international regulations such as the SOLAS and Load Line Conventions comes under Mercantile Maritime Department (MMD) which is a body under the control of the DG. All ports are owned and controlled by state and union governments except for 12 ports which are designated as ‘major ports’.

Overview of Maritime Arbitration 

Maritime arbitration finds its origin from international commercial arbitration but it differs from the general model for numerous reasons, which make it “special” from the sources of law. Nowadays arbitration is most widely used among almost all international shipping operators to solve every kind of dispute. Hence arbitration clauses are included in many of the international shipping contracts. This is due to its remarkable advantages over litigation, such as flexibility, specialization, confidentiality etc. It allows parties to avoid the undesirable effects due to structural characteristics of litigation.

Some countries do not have specialised judges for dealing with maritime cases, hence they may be more inclined towards their national law rather than maritime usages and customs which are internationally recognized, which they may not be aware of. Arbitration allows parties to choose arbitrators according to their own preference who are not only known for their wisdom and good sense but who have also specialized skills and experience in the seaborne shipping sector. 

If a dispute is referred to the national court of the place of business then it would naturally put the party of that nationality to advantage, hence approaching court is not a wise idea in such a case.

The maritime arbitration rules are set by ‘The Indian Council of Arbitration’ and are called as Maritime Arbitration Rule of Indian council of Arbitration. These Rules govern the conduct for domestic and international maritime arbitrations in India. The rules framed serve as guidance for the formation of an arbitration committee, its functioning, claim and counterclaim process, qualification and process to be followed for empanelment, etc. These sets of rules describe the power of the arbitrator, scope for arbitration, conduct of arbitration proceedings and rules for setting arbitration fees and other expenses.

Scope of Maritime Arbitration 

The scope of maritime arbitration covers interpretation of charter party or any contract of affreightment and bills of lading. It covers carriage of goods by sea, marine salvage, towage of vessels or any floating structure. Damage claims related to the collision, groundings, fire or any such accidents of ships whether in port or at sea including damage to fix or floating object of the port. It also includes interpretation of shipping documents, ownership of vessels and aspects related to mortgages. Removal of the wreck and marine pollution comes under the scope of maritime law. 

Maritime Arbitration Committee

The council for maritime arbitration shall consist of following nominees:

AUTHORITIES	No. of nominees
Indian Council of Arbitration	2
Ministry of Shipping	2
Ministry of Law & Justice	1
Indian National Shipowners’ Association	1
Shipping Corporation of India	1
New Delhi Shipbrokers’ Association	1
Representative of P & I Correspondents (To be nominated by the President, ICA)	1
Representative of Steamer Agents ((To be nominated by the President, ICA)	1

President or Senior Vice President of the Council shall be chairman of the Committee and the Convener of the Committee shall be the Registrar of the Indian Council of Arbitration. The Committee shall meet as and when required but at least once in a year.

The Committee shall maintain a panel of Maritime Arbitrators, who have a stature and reputation in the maritime world as knowledgeable and impartial person of integrity and objective approach. 

The empanelled arbitrators can be expelled if he does not abide by the conduct mentioned in maritime arbitration.

The arbitrator shall be given an opportunity to prove his innocence by a Sub Committee appointed by the Maritime Arbitration Committee. Any decision by the committee shall be final and binding on the arbitrator.

Function of Maritime Arbitration Committee

The functions of the Committee shall be as following:

• empanelling arbitrators
• providing guidance to arbitrators and parties
• Determine the scales of arbitrator’s fee, registration fees and administration charges from time to time
• Publishing of arbitral award
• Appointing arbitrators
• Decide the applicability of these rules in relation to a dispute referred to it
• Review the progress of cases

Arbitrator’s Fee and Administrative Fee prescribed by the Maritime Arbitration Committee

Registration fees

The registration fees shall be Rs. 5000 for claim up to Rs. 1 crore and Rs. 10000 for claim above Rs. 1 crore. The Arbitrator’s fee and Administrative Fee (of ICA) will be fixed separately depending on the amount in dispute.

Power of Arbitrator

The power of arbitrator shall include:

• To ask for any documents within the possession of the claimant and respondent which may be required for the proceedings.
• To examine any witness on oath or affirmation.
• To call for giving evidence by the affidavit, if necessary
• Power to pass an interim order for securing the amount in dispute in arbitration 

Code of Conduct 

Objective

It is based on the fundamental principle that various stages of arbitration right from the appointment of arbitrator till final awarding stage can maintain ethical norms only by the institution of arbitration which can guarantee its enforcement. As ad-hoc arbitration is self-regulatory it may adopt this code of conduct to generate confidence in the institution of arbitration in general. This code keeps evolving with the need of time over the years, it would be a continuing objective to revise and update it from time to time to keep pace with international standards.

Code of conduct for arbitrators

• The arbitrator who is nominated in a case shall make disclosures as specified in the Arbitrator’s Declaration of Acceptance of Responsibility and Statement of Independence.
• The Arbitrator shall follow the Guidelines for the conduct of Arbitration proceedings as per Maritime Rules of Arbitration.
• The arbitrator shall disclose any interest or relationship with the parties: the Arbitrator shall also have a duty:
  • to Disclose any direct or indirect financial or personal interest from the proceedings.
  • to Disclose any existing or past relationship with anyone of the party.
• to maintain confidentiality inherent in his office and not to share any confidential information acquired during the proceedings for the advantage of others or for personal benefit.
• To conduct the proceedings fairly and diligently by adhering to the concepts of fairness, patience, courteousness, and equality.
• To Act within the scope of authority mentioned in the arbitration agreement;
• To prepare a timetable for all further proceedings according to ICA Maritime Rules and Strictly adhere to such time table.
• To decide all matters justly, exercising independent judgment should not permit outside pressure to affect the decisions.

Code of Conduct for the Parties

• Parties shall maintain the dignity of Proceedings.
• Parties shall act with honesty and diligence.
• The parties shall strictly adhere to the Guidelines of Conduct as mentioned in Maritime Rules of Arbitration.
• The fees of the registrar should be paid in stipulated time.
• The parties shall proactively respond to the arbitrator’s request for any required information.

Conclusion

Maritime arbitration has witnessed great success in the field of arbitration and have pushed international maritime trade to further progress and prosperity. Today arbitration has become a basic legal system for solving disputes both domestically as well as internationally. The pace towards the conclusion of international treaties or establishing arbitration regulations as Arbitration has the respect of the international. The most important features of Maritime Arbitration nowadays are as follows: 

International Commercial Arbitration is the umbrella under which maritime arbitration lies. This can be said because it relates to international trade such as transferring money, goods and services across the borders between private players or between them and one of the public entities. 

Maritime Arbitration is an independent arbitration which has its own rules and procedure manifested in Arbitration Maritime regulations whether institutional or free which is adhered to by the parties. Maritime Arbitration is an independent arbitration with its objective rules which is represented in the applicable law on the subject of the dispute where the Maritime Arbitration cuts a great stride in establishing its own vocational law with its sources manifested in the International Maritime treaties, conditions of typical Navy contracts as a solution of disputes, the habits and customs of maritime trade and Navy arbitral precedents. 

References

• http://www.icaindia.co.in/ICAMaritimeArbitrationRules-03.pdf
• https://www.mondaq.com/india/marine-shipping/817974/ship-arrests-and-indian-maritime-law#:~:text=The%20Coasting%20Vessels%20Act%2C%201838,aspects%20of%20maritime%20in%20India.
• http://www.icaindia.co.in/Maritime-ArbitrationRules.pdf
• https://www.lexology.com/library/detail.aspx?g=837029e2-1420-45d7-bccc-ad695b587740
• http://www.pandiindia.in/shippingmaritimelaw.htm
• http://www.idacindia.org/pdf/MaritimeArbitrationRules.pdf