Maritime Disputes: Ensuring a Fair and Just Outcome

Lee Kok Leong, our special correspondent, interviews Philip Teoh, a prominent maritime lawyer, on ways to resolve disputes and what it takes to be a good lawyer.

Lee Kok Leong, our special correspondent, interviews Philip Teoh, a prominent maritime lawyer, on ways to resolve disputes and what it takes to be a good lawyer.  Philip is partner and head of Shipping, International Trade and Arbitration Practice of Azmi & Associates, one of Malaysia’s largest full-service law firms.

Philip Teoh, maritime lawyer

Maritime disputes are oftentimes contentious and complex and it takes a good lawyer to astutely know which avenues to pursue and to navigate the legal intricacies and nuances. 

Maritime Fairtrade (MFT): What are the different ways of resolving maritime disputes? 

Philip Teoh (PT): The two main ways maritime disputes can be resolved are by litigation in national courts or maritime arbitration. 

Many shipping lines provide for disputes to be resolved by their state courts, for example, NYK may provide in their bills of lading that all claims are to be filed in the Tokyo District Courts. This choice of forum or jurisdiction is given effect to by courts of most countries as an instance of party autonomy so suits filed outside those courts will be stayed unless the claimant is able to demonstrate a strong cause why the suit is not filed in the court stipulated in the bill of lading.

The other method is to resolve the case in arbitration. Arbitration in fact is the only choice in many cases where the claimant and the respondent carrier are nationals of different countries. The judgements of most courts are only recognized in very few other countries by way of mutual recognition, for example, Malaysian judgements are recognized in London, Singapore, Hong Kong and a few Indian States and vice versa but not China, America and European countries.

However, arbitration awards have wider reach. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention, was adopted by a United Nations diplomatic conference on 10 June 1958 and entered into force on 7 June 1959.  This created a system where State Signatories gave effect to recognition of arbitration awards in countries which acceded to the New York Convention. As of June 2020, there are 165 State Signatories.

Signatories to the New York Convention will recognize and enforce an international or foreign arbitral award under the Convention if that arbitral award has been rendered by an arbitral tribunal sitting in a country which is also a signatory to the New York Convention.  This wide recognition allows, say an Australian Arbitration Award to be recognized and enforceable by registration in Indonesia, China or the US whilst a judgement of the Australian Court will not be.

MFT: When do we use which?

PT: You can only invoke arbitration if your shipping contract provides for it. If it does, then the Arbitration Clause may also provide for a particular Arbitration Centre to govern. The most important Maritime Arbitration Centers are LMAA London, SCMA Singapore and EMAC Dubai.  I am on their panels and am also an arbitrator of the key International Arbitration Centers ICC, LCIA, AIAC, CAAI, KCAB, and AABD Brunei.  This should be the preferred mode of resolving a maritime dispute.

The remedy of a ship arrest is a very important and effective remedy to obtain security for maritime claims.  The laws in most countries allow vessels to be arrested for security for a pending and ongoing arbitration.

The result of maritime arbitration is recognized within the New York Convention framework and the enforceability of the award is a very important criteria as to why arbitration is the preferred mode.

MFT: What is your advice for a young maritime lawyer just starting out?

PT: Maritime law closely reflects practices of the industry. The sage advice of Lord Mustill should be borne in mind: “The law and practice of shipping law have always been closely entwined.  There can surely be no other branch of commerce where the practical people know, and need to know, so much of the law; and where professionals know, and need to know, so much of the practice.” 

Lawyers must embrace change and adapt.  For instance, when I started practice, lawyers did not use internet and hardly anyone used email.  Now, email, internet, law firm websites, blogs, and social media are ubiquitous. Lawyers who don’t keep up, will not be very effective. 

Much of maritime law is contentious.  Maritime cases are fought in courts and arbitration.  Practice makes perfect.  Every hearing, application and appeal is a challenge, and we need to be able to understand and be confident of our own abilities.  Working with senior lawyers, the young lawyers will gain invaluable mentorship and experiences which will spur and sustain them. 

For the non-contentious aspect of maritime practice, it is important to bear in mind the words of Lord Mustill, and to understand and know the industry so that any agreements produced will be a realistic operational agreement instead of a textbook agreement which both parties cannot understand and use.

Innovation and creativity can only be spurred by attitude. If the junior lawyer takes the attitude that he/she knows everything, pretty soon he/she will know nothing.

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