Sole Arbitrator

When a charterparty calls for each party to appoint their own arbitrator (and if they are unable to agree, an “umpire” to be mutually appointed), it might be thought that there is a tendency towards the arbitrators being advocates for their appointers. This, however, is a misconceived idea since an arbitrator is a private judge ruling impartially between the parties whether sitting as sole arbitrator or as member of a larger tribunal. However, the formality of the concept of arbitration must not be underestimated. Though it may have been intended originally to have a non-legal flavour, it must nevertheless retain something of the judicial since it is after all an alternative, in fact the only alternative in the absence of an amicable solution between the parties themselves, to court proceedings. Although the agreement to arbitrate any dispute may originally be an oral agreement between the contracting parties it is usual and advisable for the agreement to be contained in writing either as an express clause in the charterparty contract (see Multiform Clause 30 & NYPE Clause 17) though it is unlikely that a court of law would grant a stay of proceedings in favour of arbitration. Such arbitration clauses can, and frequently do, contain a time limit within which appointments of arbitrators should be made and the leading case of the ‘Ion’ (1971 1 Lloyds 541) provides a court ruling as to what happens when an arbitration clause provision of 3 months time limit (Centrocon) conflicts with the 12 month (Clause Paramount – Hague Rules) provisions which applied to the same contract. The Hague Rules limitation period prevailed. Whether an arbitration clause in a charterparty can be binding upon the innocent holder of a bill of lading issued pursuant to a charterparty is dependent entirely upon the incorporating words in the bill of lading, which, if sufficiently comprehensive, could entitle a shipowner/carrier to compel a bill of lading holder to arbitration under an arbitration agreement (or vice versa).