Press "Enter" to skip to content

Legal Perspective – The Use of Arbitration in Maritime Law

Arbitration is a big part of dispute resolution with matters involving maritime law. Maybe it’s the fact that the marine sector has its unique elements, such as salvage law, that lends itself to specialized arbitrators who deal with such issues on a daily basis. It’s not that there’s a shortage of maritime disputes to keep the dockets of federal district courts full, from cruise ship accidents to commercial fishing vessel collisions. But arbitration is a commonly used forum in the maritime community.

Arbitration is part of the broader family of tools that fall under alternate dispute resolution, or ADR. Arbitration has a close cousin, mediation, which we see in matrimonial disputes and labor law disputes. Unlike mediation, which can often be more advisory in its nature, the arbitration process is binding. That means an arbitrator’s decision carries the same weight as a court decision.
Why is it that arbitration is commonly used as a forum? One reason is that the process is sometimes mandatory. Contracts could include provisions where arbitration is slated from the start as a means of handling disputes. We see this in employment contracts for commercial mariners.
These contracts could be intimidating because the prospective employee waives their rights to a trial by agreeing to the arbitration clause. But it isn’t a decision to pain over much. It’s more of a “take it or leave it” decision. It comes down to signing the contract with an arbitration clause if you want the job, or not taking the job if you aren’t willing to submit to arbitration as a forum for employment grievances.
Such arbitration clauses are binding. And we see them in other areas as well, such as yacht charters, cargo ship charters, vessel construction, or cargo damage. Aside from the general outlook that often favors arbitration, courts can compel, or force, arbitration upon the parties if there is any hesitancy to go ahead with the process. And federal courts interpret arbitration clauses broadly (AT&T Techs., Inc. v. Communications Workers of America, 475 U.S. 643), holding that, “any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.”
Even if not mandated by a court, there are definite advantages to the arbitration process. It is often less expensive than court. Another advantage is that it can dispose of a dispute more quickly. The discovery, or fact-finding, process can be streamlined in arbitration.
Arbitration can be every bit as thorough as a court trial, depending on how the parties prepare. But the rules are eased in some areas. The rules of the arbitration forum could be applied, which could be less restrictive than the Federal Rules of Evidence in some instances.
In addition to the rules of evidence, the rules of civil procedure could be eased in arbitration. That’s because the rules of the arbitration forum could be more streamlined than the Federal Rules of Civil Procedure in federal court or civil practice rules for state court proceedings.
The arbitration process can be more private than a court proceeding. It can take place in the arbitrator’s office or a conference room. While it might not take place in a public courtroom, that doesn’t mean that arbitration decisions are not published. Depending on the type of arbitration and rules, arbitration decisions can become public.
All this can result in dispute resolution that is cheaper and quicker. So what’s not to like? Well, not everyone is always thrilled about using the arbitration process. Some of those same attributes that make the process more streamlined are sometimes the very thing that one side does not want to relinquish, such as a more belabored discovery process.
Another reason why a party could favor court over arbitration is that they want the jury trial that court can provide. Additionally, it could sometimes be more straightforward to bring additional parties into a court proceeding through the rules of civil procedure. Since arbitration is not a traditional court proceeding, these rules would not avail themselves.
Similar to decisions from state courts or federal district courts, arbitration decisions can contain provisions for appeal. But appeals in arbitration can be more limited than in a court proceeding. Therefore, a party to an action might not want to restrict their appeals rights.
As with any legal proceeding, there are factors to consider in deciding whether arbitration or litigation is the best way to go for a given dispute.