Maritime Arbitration as an effective tool in resolving cross-border shipping disputes in Sub-Sahara Africa by Andrew Pike, Head of the Ports, Terminals & Logistics Corridors Sector, Durban

MARITIME ARBITRATION AS AN EFFECTIVE TOOL IN RESOLVING CROSS-BORDER SHIPPING DISPUTES IN SUB-SAHARA AFRICA The shipping industry has a long history of recognising and embracing arbitration as an alternative dispute resolution tool. Arbitration is well suited for shipping disputes arising from breaches of contract between commercial parties who wish for a speedy resolution before an experienced specialist maritime arbitrator.

OVERVIEW An introduction to maritime arbitration: The current position in a global context Why do England and Singapore feature in the global context? The South African experience –Local arbitrations –Foreign arbitrations –Arrest and attachment regime –Enforcement Some thoughts around the future of maritime arbitrations in sub-Saharan Africa –The possible introduction of a regional cabotage regime –The rise of the off-shore, ports and terminals industries –Review of existing legislative framework –Replication of South African’s admiralty regime? –And what about land-based logistics transport (rail and road)? Conclusion

1. INTRODUCTION: THE CURRENT POSITION IN A GLOBAL CONTEXT Shipping disputes: Most shipping contracts are concluded on standard forms, for example: –charter parties –bills of lading –ship building –ship management –salvage contracts Many standard form shipping contracts provide for arbitration. Arbitration offers the advantage of being a neutral and commercial forum, allowing parties to control who is appointed to resolve their disputes.

1. INTRODUCTION: THE CURRENT POSITION IN A GLOBAL CONTEXT BIMCO Dispute Resolution Clause 2015: English law / London arbitration / LMAA US law / New York arbitration Singapore law / Singapore arbitration Or at a mutually agreed place with a mutually agreed law to apply Used in: Charterparties, ship building contracts, ship management contracts etc Some bills of lading

1. INTRODUCTION: THE CURRENT POSITION IN A GLOBAL CONTEXT Choice of terms in maritime arbitrations: London Maritime Arbitrators Association (LMAA): ICC/CMI (Paris) SMA (USA) SCMA (Singapore) LCIA (London) Africa?

2. WHY DO ENGLAND AND SINGAPORE FEATURE IN THE GLOBAL CONTEXT? Advantages include… Trusted, accessible and established precedent based legal system Well developed body of commercial contract and shipping law Familiar legal principles Marine insurance industry Specialist shipping legal practitioners Experienced shipping technical and commercial experts Experienced arbitrators Courts are generally regarded as independent and impartial Judges experienced in shipping matters Anti-suit injunctions Acceptable neutral middle ground (law and location)

2. WHY DO ENGLAND AND SINGAPORE FEATURE IN THE GLOBAL CONTEXT? Disadvantages include… Cost of venue Arbitrator fees Solicitor, barrister, expert fees Attempts to keep costs proportionate include… Costs awards Small claims procedures Documents only

3. THE SOUTH AFRICAN EXPERIENCE Introduction Seldom encounter SA law / SA arbitration other than in terminal and logistics throughput agreements Occasionally assist with foreign law / foreign arbitration Section 3 of South Africa’s COGSA allows local cargo interests to bring their claim for loss/damage locally despite exclusive jurisdiction or arbitration agreements Frequently arrest property in South Africa as security for foreign arbitration Frequently enforce foreign arbitration awards against property in South Africa

3. THE SOUTH AFRICAN EXPERIENCE South Africa’s unique ship arrest and attachment regime Admiralty Jurisdiction Regulation Act Defined “maritime claim”: very broad. Almost anything maritime in nature goes By the arrest or attachment of property belonging to the debtor (in personam) Or by the arrest or attachment of defined maritime property e.g. a ship or container (in rem) Arrest or attachment of an associated ship (wider than sister ship arrests) Security arrest for proceedings contemplated or brought abroad

3. THE SOUTH AFRICAN EXPERIENCE Legislation governing the enforcement of foreign arbitration awards Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 Recognition and Enforcement of Foreign Arbitral Awards Act 40 of 1977 Procedure for the enforcement of foreign arbitration awards Apply to court + necessary documents Court has a discretion Opposition by the counter-party Made an order of the High Court and enforced as such

3. THE SOUTH AFRICAN EXPERIENCE Further requirement: Ministerial consent Minister of Trade and Industry Award arose from an act or transaction connected with the mining, production, importation, exportation, refinement, possession, use, sale or ownership of any matter or material, of whatever nature. Alternative procedure: Maritime arbitral awards Foreign arbitration award relates to a maritime claim = a maritime claim Enforced (by arrest or attachment) as with any other maritime claim Under the Admiralty Jurisdiction Regulation Act

3. THE SOUTH AFRICAN EXPERIENCE The future: A new Arbitration Bill Recently published International Commercial Arbitration Bill for comment Incorporates the UNCITRAL model law on international commercial arbitration New, simpler, framework for enforcement

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA Current position English law / arbitration (Singapore or US/New York) Sub-Saharan Africa? Changes to legislative frameworks and court procedures Increase in commercial bargaining power of African ship and shipping interests

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA The possible introduction of a regional cabotage regime Africa’s share of ship ownership is 0.9% of the world’s fleet (measured by gross tonnage) Liberia has the second largest ship register in the world Both the African Maritime Transport Charter and 2050 AIMS seek to increase Africa’s share of global ship ownership Envisage the possibility of an African fleet doing cabotage trade around Africa The effect may be an increased bargaining power When negotiating charterparties, bills of lading and other shipping contracts Choice of law?

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA The rise of the off-shore, ports and terminals industries Established off-shore industry Port and terminal infrastructure projects planned or currently underway Disputes between supply vessels, oil field operators, local port authorities, terminal operators and users etc. Arbitration in at a specialist African Maritime Arbitration Centre?

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA The establishment of a specialist African Maritime Arbitration Centre? Convenience of location: Geographic or by volume? Neutrality of choice Availability and cost of venue hire Reliability of telecommunications network Availability and proximity of experienced arbitrators, lawyers and experts Visa requirements Supportive judiciary Supportive legislative framework To which courts would parties be entitled to appeal (if at all) the arbitration award? Merit in developing a set of specialist African arbitration terms? Reconciling disputes in Francophone countries with those in common law jurisdictions?

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA Review of existing legislative frameworks Singapore? Replication of South African’s admiralty regime? Associated ship arrest provisions Security arrest for anticipated or commenced foreign arbitrations Enforcing maritime arbitration awards as maritime claims

4. SOME THOUGHTS AROUND THE FUTURE OF MARITIME ARBITRATIONS IN SUB-SAHARAN AFRICA And what about land-based logistics transport (rail and road)? Take or pay (throughput) agreements in respect of bulk cargoes moving from the hinterland along logistics corridors through seaport terminals Arbitration?

5. CONCLUSION Encouraging maritime arbitration in Sub-Saharan Africa Local parties Cost and practical considerations Local arbitration clauses Local arbitration rules Local enforcement regimes

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