Disputes

It is inevitable that there will be disagreements between contracting partners from time to time, although most differences will be settled amicably and with a minimum of trouble and expense. A few disputes, though, will cause much more difficulty and it may be that outsiders well versed in commercial law will need to be called in to provide independent settlement. In such cases it is important to establish the legal code that will apply, since laws vary from place to place, and different decisions might be reached on the same set of circumstances depending on the jurisdiction that is to apply. We have seen from earlier Lesson material how the place of residence of the contracting parties, the place where the contract was “made”, or specific reference to a particular place or applicable law may each have a bearing on where a dispute should be considered, debated and settled. Consequently, it is advisable to specify in a charterparty or other shipping contract the legal code that is applicable for the reference of any disputes that may arise – e.g. “English Law to apply” – and to spell out the format of any legal hearing – i.e. whether disputes are to be referred to Court or, as it almost always the preference of those engaged in shipping contracts, to Maritime Arbitration. Much of international shipping is conducted in the English language and, given the long history of deepsea trading during the formulative years of commercial shipping over recent centuries by the British nation, it follows that a wide ranging and adaptable commercial legal code has evolved which many citizens of the world of non-British background select in time of dispute. Thus it is quite common to find, for example, a Greek Shipowner and a Japanese Charterer resolving a dry cargo charterparty dispute before a London Arbitration based, of course, on English law. Equally, might a South American Cargo Receiver and a Scandinavian Ship Operator have a dispute heard before a judge in the English Commercial Court.