This is the text of an interview with Nick Parton of the London maritime law firm, Jackson Parton. The interview was arranged for ship.sh by FOBNetworking.com, the international networking platform for shipping professionals.
1. Ship.sh: It always used to be said that arbitration in London was fairer, faster and provided better value for money than litigation. Is that still the case today? When should parties arbitrate rather than litigate?
Nick Parton: I have to say that today London arbitration is just as expensive as litigation. That is not how it always was. In the old days, arbitration was conducted without lawyers. The parties chose a shipping professional as arbitrator. The two parties put forward their case and then the arbitrator made the final decision. It was quick and inexpensive. I can still remember arbitration being like that. Today, unlike in the past, arbitrations require meticulous attention to detail and this can have an important effect on the final outcome.
Nick Parton: 不得不说，今天在伦敦仲裁跟起诉一样昂贵。但以前并非如此，以往仲裁中，不需要律师参与，仲裁双方选择一个航运专家作为仲裁员，各方上前陈述案情，然后仲裁员作出最终裁决。迅速又经济。我仍然记得当初那样的仲裁。今天，与以往不同了，仲裁中会关注到细致入微的细节，且这样的细节对最终的裁决起到很大的作用。
Therefore, London arbitration can take as much time as litigation, and will be more costly than litigation, unless it is on documents alone – this can be significantly quicker and somewhat cheaper. A company should arbitrate if they want to keep the details private, otherwise it is probably better to litigate. With arbitration, there are three main distinguishing features: one is the cost of the arbitrators, the second is the juggling of the diaries of the various parties to arrange the hearing, and the third is the fact that a High Court judge is free whereas you have to pay the arbitrator. Arbitrators appointed by lawyers tend to be more generous to lawyers when it comes to awarding costs than a High Court judge would be. Arbitrators will also award compound interest on the amount in dispute, while High Court judges award simple interest, so if you win an arbitration, you may recover more than if you litigate, depending on the length of time involved. That is one point in favour of arbitration as opposed to litigation.
2. Ship.sh: Why choose London? What about New York, Singapore and Paris?
Nick Parton: At the moment, London massively dominates international arbitration.
I remember some years ago I was asked to give a talk about London arbitration compared to New York and Paris. The statistics at that time showed that there were about 4,400 arbitrations in London that year, while there were about 111 in New York and about 105 in Paris. I believe that the number of cases heard in New York has actually reduced in recent years. Singapore is obviously convenient for parties from Asia.
In terms of fees, London arbitration is purely decided by the time spent by the arbitrators who charge an hourly rate. In Singapore, fees are based on the amount in dispute.
It must also be remembered that London has got a very good infrastructure in terms of access to experts and many very able lawyers. There are a lot of maritime law firms competing ferociously in London, whereas there are not as many maritime law firms in other places. You can also have a LMAA arbitrator sitting in Singapore, but it will be more expensive.
3. Ship.sh: What about the quality of London arbitrators? Is the LMAA a "closed shop”?
Nick Parton: It is very difficult to become a member of the LMAA these days. You have to have published awards and to have a track record as an arbitrator, before you can be considered to be a member of LMAA. It is the existing members who decide, and they frequently refuse people.
Nick Parton: 现如今要向成为LMAA的成员是非常困难的。你需要有判决被出版，还需要有一些作为仲裁员的出色表现，才能有资格被考虑成为LMAA的成员。最终是否入会是由现有成员决定的，但他们经常拒绝新成员入会。
Sometimes I appoint junior barristers or QCs as arbitrators rather than members of the LMAA, when I want a very high powered lawyer as arbitrator, who is distant from the parties involved and cannot possibly be influenced. As arbitrator, the barrister is prepared to accept a rate of GBP 350/hour, when they can command a much higher rate as barristers. For example, a QC may charge around GBP 800/hour. This is partly because of kudos attached to being an arbitrator, and partly because some barristers like to wind down their practice towards the end of their careers.
4. Ship.sh: London arbitration awards are not published. Should they be, as in NY?
Nick Parton: London arbitration awards are private. No one knows the detail apart from the parties themselves. That is one attraction of arbitration in that the parties can resolve their disputes without anyone else even knowing they are in dispute. In New York and Paris, arbitration awards are published. London arbitration awards may be published anonymously in certain circumstances in the LMAA newsletter, without the names of the parties and their lawyers, if all the parties agree.
In my view, the majority of people in London prefer to keep awards private. I think New York might have made a fundamental error in publishing. People prefer the anonymity.
5. Ship.sh: Can a party appeal to the Court if they lose at arbitration?
Nick Parton: It is section 69 of the 1996 Arbitration Act that applies today. It is very difficult to get the permission to appeal to the Court. In 99% of arbitration cases the arbitration award is the final judgement. According to Section 68 of the Act, the Court may allow an appeal in certain instances on procedural grounds, for example, if the arbitrator has been guilty of misconduct. But under the current case law, that is only to be used in very extreme circumstances, so it is much the solution of last resort. So if you do not allege something really serious, an attempted appeal based on section 68 will be a waste of time and money.
A case of fraud can now be heard an arbitrator. It can instead go to Court. In an arbitration, if one party alleges fraud that issue could be dealt with in Court. Here, the arbitrators decide whether they are going to hear the fraud issue or not.
6. Ship.sh: There is a perception in China that Chinese shipyards and shipping company are likely to lose their cases if they are arbitrated in London. Is this perception justified?
Nick Parton: Arbitration is in some ways a unique concept in that you are actually paying someone to decide whether you are right or the other party is right. It might sound like an astonishing proposition if you think about it, because in Court the judge is paid by the state, and has no possible interest in the outcome of the case other than to hear the evidence and to give a judgement. Inevitably, if you choose arbitration, then you may have a personal relationship with the arbitrator or your lawyer may do. If you pay someone to arbitrate, it is very easy to get the impression that there must be some improper conduct going on. When a party loses an arbitration and sometimes even a High Court case, they may allege that the arbitrator or the judge is stupid or biased. Of course, people just do not like losing.
Nick Parton: 仲裁在某些方面来说是个独一无二的概念，你实际上是付钱给一个人让他来判断是你对还是另一方对。如果你仔细想想看，这听起来也许是一个很惊人的主意，因为法院的法官的费用由国家支付，法官除了听取证据和做出裁决，他们跟案件的结果并没有可能的利益关系。如果选择仲裁，不可避免的，你自己或者你的律师可能跟仲裁员有私人关系。同时你付钱让人来仲裁，这就很容易令人产生“这里面一定有着不良勾当”的印象。当一方仲裁败诉，甚至在高等法院败诉，他们可能声称仲裁员或法官愚蠢和偏向另一方。这时可以理解的，谁都不喜欢输。
I can well understand that the Chinese shipyards who have lost at arbitration might think that all arbitrators are biased against Chinese yards.
In fact, London maritime arbitrators can be quite suspicious of shipowners, particularly if they think that trickery or fraudulent conduct is involved. For example, there have been cases reported in the Lloyd’s Law Reports about some ship owners setting fire to their ships in order to claim the insurance proceeds. Some owners seem to believe that it is a legitimate way to make money given all the insurance premiums they pay.
There are some companies which are very familiar with English law and London arbitration, and very experienced in using it to their advantage. Some believe that they know how to use their lawyers and experts. They tell their lawyers what they think they ought to know and do not tell them what they do not want them to know. They will not contemplate any other law or place of arbitration in their contracts because they know the system.
I remember a shipbuilding dispute where a Greek company wanted to get out of a contract with a Chinese shipyard. Many millions of US dollars were at stake. In order to win a case like that, the Chinese shipyard must make its important witnesses available to the lawyer and experts for as long as is necessary, going through all the details of the case. This is of course very time-consuming, but this preparation is essential for the outcome of the case.
I have seen Chinese interests win in London arbitration proceedings, although arbitration awards themselves are private.
I cannot stress enough the importance of preparation in order to succeed in London arbitration proceedings. London arbitrators will study the facts of the case in great detail, just as the Courts will do. In my judgement, preparation for arbitration and litigation is of the utmost importance, but there is no bias against Chinese interests.