dispute settlement in marine insurance

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Dispute Settlement in International Trade and Investment

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INTRODUCTION

Maritime law has always shown a prominent degree of consistency. Shipping is a general activity.

It has a history as long as mankind. It has been known across all littoral and riparian parts of theearth. Ample reference to maritime activity and attendant commercial law can be found in many

sources concerning the conduct of maritime commerce in all parts of the world: the Persian

Gulf, the Arabian Sea, the Tigris-Euphrates Basin, the Mediterranean Sea, Africa and its coast,

the Black Sea, India, and the Indian Ocean, South-East Asia, the Pacific, China and North Asia,

the North Sea and the Baltic, the great rivers of Europe and Eurasia, and the Americas. The

great commercial centres of the Middle East Baghdad, Damascus, Alexandria and others

supported a cosmopolitan commercial society from ancient to modern times.

The Indian Ocean has nurtured commercial and maritime activity for millennia. The monsoons

enabled trade from the Red Sea to Asia, with seasonal winds to China, the Philippines and North

Asia.1 Malabar teak, coconut fibre, flax, cotton and metals made India a flourishing site of

shipbuilding.

The 20th century saw the development of attempts at the international harmonisation of

commercial and maritime law. In the first half of that century, the attempts at unification or

harmonisation of commercial law were dominated by maritime law and maritime lawyers.

Carriage of goods under bills of lading was an excellent example.

Attempts at harmonisation have spawned important, private and public bodies. Until theformation of the Intergovernmental Maritime Consultative Council (IMCO) later to become the

International Maritime Organisation (IMO) and other United Nations bodies whose activities

touch on maritime affairs,2the Comit Maritime International (CMI) played the leading role in

the development of international conventions and rules concerning maritime law.3

After The Torey Canyon disaster, the IMO began to undertake the primary burden of

promulgation of maritime treaties, conventions and standards at least of a character dealing with

1 The Hon. Justice James Allsop, "International Maritime Arbitration: Legal and Policy Issues,"http://www.acica.org.au/downloads/International Maritime Arbitration Malmo and Sydney.pdf (accessed

September 10, 2013).

2 The United Nations Conference on Trade and Development (UNCTAD); UNCITRAL: The United Nations

Commission on Uniform Trade Law created by unanimous resolution of the General Assembly of the United

Nations on 20 December, 1966; UNIDROIT: The International Institute for the Unification of Private Law was

established by multilateral treaty in 1926

3 Covering transport of goods, carriage of passengers and luggage, collision and navigation, salvage and general

average, limitation of liability, pollution liability and compensation therefore, maritime liens and claims, registration

of ships, mortgages, arrest, classification societies, off-shore mobile craft and stowaways.


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safety, the environment and technical matters.4The CMI remains significantly influential. Its role

has been somewhat redefined to co-operation with intergovernmental organizations seeking to

harmonize maritime law.

It is over 100 years since maritime lawyers last made a concerted and international attempt to

agree the harmonization of certain basic issues of marine insurance law. That attempt took the

form of the Buffalo Conference of the International Law Association in 1899, which in turn led

to the adoption of The Glasgow Marine Insurance Rules in 1901. Even they were replaced by

the 1906 UK Marine Insurance Act.

Throughout the 19th century, marine insurance was practised in most parts of the world under

the influence of the 1906 UK Act. Regional initiatives such as those in Scandinavia have made

their mark in seeking both certainty and reform. But for many countries that inherited the 1906

Act directly or indirectly, marine insurance law has remained static and relatively stable, and thatstability has been reflected in the comparative paucity of reported marine insurance cases in most

maritime jurisdictions.

Unfortunately, the stability of the law of marine insurance has not been mirrored in a like

stability in marine insurance practice. Many sectors of the industry now face survival challenges.

Perhaps it was these same hard times that in turn prompted an evaluation of the national legal

regimes in which marine insurance operates. In the 1990s, initiatives were started in the USA,

Australia, New Zealand, China, and South Africa (to name but a few) to examine domestic

marine insurance laws. And in those countries which are closely influenced by the 1906 Act, the

evaluation began with a re-examination of whether or not the 1906 Act continued to serve the

industry in the changed times and market circumstances of the approaching 21st century

SIGNIFICANCE OF THE STUDY

Maritime insurance is a very important aspect in the field of overseas commerce and internal

trade for a country. It is closely linked with banking and shipping. Banks generally finance the

goods which are transported by the ships or by other means of transport in case of internal trade

and marine insurance protect such goods against loss or damage. Without such protection theentire trade structure is bound to suffer. 5

4 CMIs contribution to the work of the Legal Committee of the IMO has been huge, in particu lar in drafting

conventions on carriage, limitation of liability, maritime assistance and salvage and arrest, harmful and noxious

substances, places of refuge, fair treatment of seafarers and wreck removal.

5A Reference note released by Government of Maharashtra. Available at https://mgif.maharashtra.gov.in

/SITE/PDF/ Products/MarineInsurance.pdf (As accessed on 22 march 2014)


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(A.D Hughes, Casebook on Carriage of Goods by Sea, Blackstone Press Ltd; 2nd editionAugust 1, 1999.)

This paper seeks to deal with some important underlying policy questions faced bylegislatures, governments and courts in dealing with the issues thrown up by internationalcommerce and dispute resolution, and, in particular, maritime commerce and dispute resolution.

(The Hon. Justice James Allsop, "International Maritime Arbitration: Legal and Policy Issues,"http://www.acica.org.au/downloads/International Maritime Arbitration Malmo and Sydney.pdf(accessed on March 20, 2013).

RESEARCH OBJECTIVES

1. To investigate the nature and form of disputes in Marine insurance.2. To explore the ways that is in vogue in settlement of dispute in a Marine insurance

Business.3. To identify the inconsistency between the industries practice and the current legal

systems.

HYPOTHESIS

1. The laws and legislations relating to dispute settlement in marine insurance disputes arenot consistent with the practices of the marine insurance industry.

2. Companies dealing in Marine Insurance business have found new ways to manage risksand settle disputes in Marine Insurance Sector.

RESEARCH QUESTIONS

1.

What is the nature of Marine Insurances?2. What are the requirements for getting a Maritime Insurance policy?3. How do Shipping Companies deal with the changing markets and choosing the best

marine policy?

4. What is the nature of a marine insurance dispute and how is it settled?5. Is international law equipped with provisions to deal with disputes arising from this arena

of law?


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SCOPE

This paper shall deal with definitions, comments, statements, and practical data dealing with

marine insurance. It will deal with the methods of dispute resolution that are being adopted ininternational disputes in maritime trades by companies dealing with it. The efficacy andefficiency of these methods will be analyzed in the course of this research paper.

The study is restricted to the point of analysis of risk factor in Marine insurance and the ways inwhich the dispute have been settled and how a mechanism has evolved from the practices of theindustry and respective suggestions have been made on the basis of study.

As the study is doctrinal and is based on the data that were collected by previous researchscholars, thus one of the limitations happen to be the reliance on the data that were collected byother research scholars.

Secondly, the reading material on such a niche topic is scarce and old. The online database whichis available is also scattered and limited.

RESEARCH METHODLOGY

The research methodology followed in this project is doctrinal, wherein all relevant Primary andSecondary sources on the point have been referred to. Effort has been made to cover all theimportant areas pertaining to the topic with extra emphasis on the more important ones.Relevant material has also been referred to from the internet. All material so referred has been

duly acknowledged.

Pertinent authoritative texts that best relate to the topic at hand have been cited with their mostrecent position emphasized upon. Best efforts have been taken to make the research ascomprehensive as possible, and views from several authors over the same point have beenquoted, thus offering a varied and complete outlook to the project. Different interpretations ofthese legal documents by various legal scholars have been incorporated in the analysis.

TENTATIVE CHAPTERIZATION

1. Introduction.The first chapter is the introduction to the concept of maritime insurance. This chapterwill deal with the evolution of the maritime insurance form its inception to itsdevelopment till the 21st century and the legal system that has developed in differentjurisdictions to govern and regulate the principles of marine insurance.

2. Types of Marine insurance policies and risks covered by them.A marine insurance is a very broad term. There is a broad spectrum of insurance policiesthat are available for a party to choose from. An insurance policy which is chosen by a


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party is depending upon terms of letter of credit/ export order and clauses of thecontract entered between the parties.

3.

Current legal system on Marine Insurance.

This chapter deals with the current laws, international treaties, conventions and chartersthat have been drafted in different systems by the legislature, international organizationsand committees. It analyses the scope of the current legal system governing the Law ofmarine insurance and the dispute settlement mechanism that has been provided in it.

4. Practices of the industry in marine insurance business.There has been a huge discussion in the international arena with respect to theinconsistency between the legal system and the practices of the industry in marineinsurance with respect to the settlement of disputes. This chapter analyses thoseinconsistencies and the ways in which the Marine industry has evolved to develop itsown mechanism for dispute resolution.

5. Disputes Settlement in marine insurance casesThis chapter deals with the decided cases and instances of disputes in the marineinsurance law. It will also try to reflect upon the disparity in the current legal system andpractices of the marine insurance industry with respect to the settlement of the disputesand reflect upon how the industry has developed its own practices and procedures forsettlement of disputes.

6. Conclusion.The conclusion of this paper will be based on the relevant findings that will be made indue course. However, one of the conclusion will be based on the fact that the lawsgoverning the dispute settlement mechanism in the marine insurance are old and areinconsistent with the changing times and practices that have evolved from the marineinsurance industry.


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dispute settlement in marine insurance

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