Contracts of carriage by sea involve an international dimension. The carriage of goods across nations separated by sea are often done by shipping lines of various nationalities. E.g. goods exported from London to Malaysia may be carried by a Dutch shipping line. In the event of any dispute, the choice of jurisdiction and applicable law in settling the dispute is decided by the parties based on the provision in the contract of carriage. Many standard charterparty and bill of lading include clauses specifying a particular forum and choice of law. In the absence of such clauses, it shall be decided by the courts after reviewing circumstances of each individual case.

Issues to be determined for dispute resolution in contracts of affreightment: Which country’s jurisdiction should apply Which country’s law should be applied Whether any foreign judgment obtained abroad is enforceable in Malaysia.

FORMS OF DISPUTE RESOLUTION Litigation process Arbitration process

1. LITIGATION PROCESS Admiralty jurisdiction is not a system of law wholly separated from other areas of law. The essential principles of the Law of Contract, Tort etc form the basis of much Admiralty law. If the parties in the contract choose Malaysian jurisdiction and Malaysian Law to be applied, then a claimant should file his action at the Malaysian Admiralty Court.

Malaysia Admiralty Court The Malaysian Admiralty Court is based in Kuala Lumpur and operates as a specialist Court within the Commercial Division of the Kuala Lumpur High Court. It was established in September the establishment of the Court quickly became an important support to the growth of the maritime sector in Malaysia.

The importance of having Admiralty Court SPECIALIST JUDGE: The cases will be heard before a specialist arbiter (the Admiralty Judge) who appreciates the maritime industry and the technical aspects of a shipping claim. SPEED: Early target dates for disposal of all claims filed in this court (except in rem) i.e. 9 months. COST: There are nominal costs as the only costs parties need to incur are the court filing fees. Centralisation of information on registration of claims and caveats.

Jurisdiction of Malaysian Amiralty Court Section 24 (b) of the Malaysian Courts of Judictaure Act 1964 provides that the High Court will have the same jurisdiction and authority in relation to matters of admiralty as is had by the Court of Justice in England in Section 20 and 21 of the Supreme Court Act 1981 (now is known as Senior Courts Act 1981)

Claims relating to carriage of goods by sea, Limitation of actions for maritime claims, (including issue on limitation of liability and time), Disputes pertaining to marine insurance and reinsurance contracts, Disputes arising from shipbuilding agreements, (construction, design, maintenance and repair of ships,) Disputes arising out of the sale and purchase of ships, Civil claims arising out of marine pollution Marine or shipping-related agency, freight and multimodal transport and warehousing. Claims related to ship financing and documentary credit for the carriage of goods by sea,

Death or personal injury, loss or damage arising out of a marine activity in or about a marine facility (ports, docks, berths or any form of structure defined as a ‘ship’ under maritime law). Civil claims arising from any breach of any marine regulations, notices, by-laws, rules or guidelines, Disputes pertaining to the welfare of any seaman, including wages and contract of service,

TYPES OF ACTION The Admiralty Court accepts the filing of both in rem and in personam writs/actions. In rem action: Action against physical property. This is most usually in the form of the vessel, as this will be the defendant’s most obvious and valuable asset. It can also be brought against other types of property, including cargo if they are subject to a maritime lien. Traditionally this is applied for at the Court in the jurisdiction where the vessel is located. The affect of this action is that the arrested vessel is prevented from leaving the jurisdiction.

In personam action: The procedure by which one party issues and serves a writ in personam (upon the party whom wishes to sue). This procedure leads to difficulties when the df is not actually within the jurisdiction. There are limiting rules governing the service of a writ outside the jurisdiction and in many cases this may not be practical or possible. The key difference between the two concepts is that an action in personam does not give rise to a right of arrest a person as security for a claim. Therefore, the action in rem is more powerful, as it will allow the claimant to potentially detain the defendant’s property in order to gain security for a judgment.

2. Arbitration Arbitration is a way of resolving commercial disputes without having to go to court. Going to court can be a lengthy process, will certainly be expensive, and takes place very publicly. It also generates bad feeling between the parties. Arbitration is not as rigid as court proceedings, but retain judicial substance.

An arbitrator is appointed by the parties to solve a dispute between them. He is an impartial person who is vested with the power to make a final determination concerning the issue in dispute. The decision made by the Arbitrator is called an AWARD

Advantages of Arbitration Flexibility Parties are free to choose the manner in which the arbitration is conducted. (feature, rules of procedure to be used, nomination of the arbitration panel) Speed Faster compared to litigation in court. Court has to balance its scheduled with hundreds of other cases while arbitral tribunal will be devoted to the case at hand. Confidentiatlity Arbitration’s ward is not public documents unlike judgement. Parties are encouraged to resolve their disputes and be open and honest about the issue.

Relationship Conducted in less adversarial atmosphere than litigation. The relationship between the disputants may go unharmed, or even improved. Negotiation structures The procedures are structured through negotiations and have negotiated settlement as their primarily goal. Finality An award is final and binding. In litigation, there is an appeal up to Federal Court DISADVANTAGE; Expensive

Limitation There are 2 kinds of limitation:  Limitation of individual cargo claims (package limitation under Article 4 rule 5 of the Hague/Visby Rules)  Limitation of all claims on any distinct occasion in accordance with tonnage of the vessel. (known as global or tonnage limitation).

EXAMPLE: A vessel carrying 10,000 containers collides with another ship. The shipowner (carrying containers) might face: claims from cargo owners (each claim will be subject to unit limitation regime/s i.e. Hague/Visby; Hamburg Regime) claims from cargo owners in other ship (tort) claims from crew members in other ship (tort) claims from other shipowner (tort) Limitation Convention 1976

As of 1st March 2014, the Convention for the Limitation of Liability for Maritime Claims 1976 as amended by the Protocol of 1996 has come into force in West Malaysia and Labuan. These provisions are incorporated in the Merchant Shipping Ordinance 1952 (MSO 1952) by way of amendments. The convention as is in force, recognizes that a successful claimant is adequately compensated for any loss of injury which they may have suffered, but at the same time the limits the liability of the ship owners.

The Convention provides an improved balance of a shipowners liability which can be covered by insurance and an almost unbreakable right to limit liability Under the 1976 convention, the right to limit is forfeited only if in case the claimant is able to prove wilful intent or recklessness on the part of party seeking to limit.

The Convention provides an improved balance of a shipowner’s liability which can be covered by insurance and an almost unbreakable right to limit liability Under the 1976 convention, the right to limit is forfeited only if in case the claimant is able to prove wilful intent or recklessness on the part of party seeking to limit.

END OF THE SYLLABUS BEST OF LUCK FOR YOUR FINAL!!