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Key development in Maritime Arbitration in India


The worldwide market which is described by quick economic developments and broad strategic administrations, the expanding dependence on oceanic shipping lanes by multinational companies (MNC) for the development of business traffic. And oceans and seas act as key for international trade. Due to the involvement of different businesses and international trade many a times leads into major conflicts. Thus, this requires for a courteous goal of resolving business disputes. Which has become an absolute requirement Mediation in oceanic industry is the most used practice when contrasted with the litigation which is more time consuming and less cost-effective. Arbitration in maritime industry is the broadest practice as contrasted to the litigation which includes additional time and cost. The establishment of the quick and cost effective legal framework has gotten an essential for any country which desires of turning into a monetary superpower. India, having a strategic location with broad oceanic trade all over the globe is expected to have a pristine dispute redressed mechanism to secure its national as well as international position to redress maritime dispute and transform into Super power.

Indian perspective of Maritime law.

The term "maritime law" or “admiralty law” refers to a system of rules and regulations that regulate matters concerning the sea and ships. The concept of "maritime law" has been described by several legal luminaries. In the book ‘Law of Admiralty’, Professor Grant Gilmore and Charles L. Black describe maritime or admiralty law as follows –

A set of laws, principles, and legal practices that regulate some core aspects of the business of transporting goods and people by water”.

The assemblage of law controlling marine exchange and route, the carriage of people and property, and marine relations by and large; the laws administering agreement, tort, and laborers' remuneration claims or relating to commerce on or over water”.

The meanings given above encompass a wide variety of practices affecting the sea; but, as the law has evolved, Maritime Law has become more detailed, which encompasses all matters relating to the sea and ships.

India has a long tradition of engaging with sea commerce and a mixture of trading and non-trading activities both within and beyond its borders. According to some historical sources, various traders and merchants were coming to and leaving India in ancient times. As a result, there has been a multitude of legislation, codes, and sets of laws in this area since the beginning of time. Following independence, the government took a close look at the problem and instituted a slew of legislation and laws to ensure that the country's maritime trading activities remained strong, effective, and ever-evolving.

Merchants Shipping Act of 1958

The Merchant Shipping Act of 1958 was passed to regulate and improve the maritime industry. Apart from this Act, the British parliament passed a variety of other legislation, including the Inland Steam Vessels Act of 1917, the Coasting Vessels Act of 1838, and several other laws and statutes. However, neither of these statutes is per the existing Indian Coastal Trading System. As a result, the government enacted many new laws such as the Arbitration and Conciliation Act, 1996 aimed at improving current maritime trading activities. Certain aspects of offshore trading and shipping can be investigated by the government and its agencies, such as the carriage of goods by sea, maritime insurance, ship ownership and registry regulation, ship selling and construction arrangements, ship lending and mortgage, ship demolition, and so on.

Part I of the Act covers the rules concerning titles under the Act and also the date of implementation. The creation and administration of the National Shipping Board, as well as the mode of the service of employees working by the Board, are covered in Part II. Part III includes general management, shipping departments, the development of a mercantile maritime department, and other subjects. The registry of ships, and also the certification or qualification of shipping officers, as well as the establishment of shipping Development committees, are covered in Parts IV, V, and VI. Part IX contains regulations concerning protection. Part XI also discusses the reduction of sea contamination caused by the disposal of oil and oil mixtures. The Act's governing adaptive performance with the Central Government's numerous powers, regulations on salvage and wrecking, rules on the recruitment of examiners in some situations, and punishments for violating the Legislation's protocols.

The Act investigates every aspect of maritime trading activities, as well as ship management and registration. It also gives specific instructions about how to monitor foreign ships and vessels that come to India for various economic purposes. The Supreme Court said in the case of British India Steam Navigation Co. v. Shanmughavilas Cashew Industries that, “unless the contrary is stated, a law applies territorially across the world and extends to territorial waters, and such places as the object to that effect is seen”. On the high seas, the Indian Government has no power to legislate on international warships and foreigners on board. Our constitutional enactments do not strip foreign ships or their owners of their privileges unless they specifically state that a foreign ship approaching an Indian port or territorial waters and thereby being beyond the legal boundaries is covered. As a result, Indian laws are unsuccessful against overseas assets and foreigners who are not residents of India. Section 2(2) of the Indian Merchants Shipping Act mentions the principle.

Another Act, the Carriage of Goods by Sea Act, was passed in 1925. This act governs the transport of goods by sea under the title of lading or relevant materials from a port in India to some other destination within or outside India. The Act gives carriers some rights and obligations.

India's stance on Maritime arbitration and recent development

The legislative authorities in India have formed an arbitration network to dissolve the disputes. The Indian Council of Arbitration, formed in the year 1965 by the Government of India along with other likewise statutory bodies such as the Federation of Indian Chambers of Commerce & Industry (FICCI), has formed the basic rules of engagement and administration with regards to Maritime Arbitration. These Rules administer the conduct for national as well as international maritime arbitrations in India. Outlined to serve as guidance for the arrangement of an arbitration committee, it’s working, guarantee and counterclaim cycle, capability and interaction to be followed for implement, and describes the power of the arbitrator, scope for arbitration, conduct of proceedings and rules for setting fees and other expenses.

Recently the government of India brought the Arbitration and Conciliation (Amendment) Ordinance, 2020, to further amend the sections 36 (Enforcement) and section 43-J (Norms for accreditation) of the Arbitration and Conciliation Act, 1996 (Arbitration Act). And the Eighth Schedule of the Act, which deals with qualifications and experience of an arbitrator, and also violates party autonomy by restricting the ability of the parties to choose their arbitrators have been omitted. The Ordinance acquaints arrangements that empower Indian courts to grant stay in the implementation of arbitral honors if it founds corrupted or misrepresentation, and also deletes certain provision from the Act relating to qualification and accreditation of arbitrators, which had adequately barred far off nationals from going about as mediators in Indian situated arbitrations.

United Nations Convention on the Rule of the Sea (UNCLOS, 1982)

In periods of calm, the 1982 Convention on the Law of the Sea acts as a systematic codification and development of current international law governing the sea. The United Nations Convention on the Law of the Sea (UNCLOS III), also known as the Law of the Sea Convention, is a multinational consensus that emerged from the third United Nations Conference on the Law of the Sea, between 1973 to 1982. This protocol is known as the "Constitution of the Seas," and it is the culmination of a one-of-a-kind attempt to codify and establish international law that has never been duplicated before. Maritime territories are now largely regulated by the United Nations Convention on the Rule of the Sea, ratified in 1982. Replacing the four 1958 conventions on the law of the sea, and was completed in 1982 containing 320 articles and nine annexures. The UNCLOS convention governs the use of seas for fishing, transportation, discovery, navigation, and mining. It is the most comprehensive treaty in public international law, covering a wide variety of maritime law issues such as maritime boundary delimitation, maritime zones, marine habitat safety, marine science studies, and piracy, among others. This is the most important achievement in the history of international maritime law. The majority of which includes the more important laws that articulated most of the existing law, was thereby revised, and it now seems to command the global community's common opinion.

Global perspective of Maritime Arbitration

The International Arbitration formed under the provision of the UNCITRAL Model Law on International Commercial Arbitration is the umbrella under which maritime arbitration lies established by different associations across the globe. It identifies with worldwide trade, like, money transferring, products and services. Which evolved with due training. Every affiliation sets up a particular technique for approach towards rules, practices and arrangement of arbitral honors that amalgamate to frame the premise whereupon the strategies for training are constructed.

For this countries like United Kingdom have founded in the year 1960, the London Maritime Arbitration Association (LMAA). Which continuously updated its Rules of Procedure and has done wonders for some of the world's most busy ports courts all throughout the planet confided in most by the gatherings to the debate. Regardless of the occurrence of Brexit, It handles more than 2,500 cases and granting of almost 600 awards every year. Whereas UAE has established in the year 2016, a world-class mechanism to cope with the arbitral bodies of other nations and to promote the volume of maritime trade in the nation called Emirates Maritime Arbitration Centre (EMAC). Also, forms Arbitral Referral Clauses for various domestic contracts and has been continuously involved in canvassing. Which leads its position in the Middle East and North Africa region.

However, countries like Singapore have emerged as the leading arbitration Centre in south-east Asia. And is the home to almost 3000 shipping companies. Have established as a specialized group to deal with commercial issues called as Singapore Chambers of Maritime Arbitration. Which foremost, and mandate immunity from institutional intervention and enforcement of arbitral awards and the selection of arbitrators among other things. Due to their feature of holding international maritime disputes in the most cost effective and less time consuming and flexible way. These centres of arbitration have gained popularity across the globe in very less time.

Scope of Maritime Arbitration in India

Shipping industry has acquired a lot of significance in the current period because it caters to the demand of both the passenger and transport market. An enormous volume of freight is shipped each day because of the expanding global international alliances and expanding relations between nations. Arbitration in maritime industry is the most broadly practiced as compared to the litigation. Maritime Arbitration dates back to the time of merchant courts, but it gained popularity in the recent time due to the global booming in international trade and commerce. Gaining popularity involves multiple MNCs, which have brought into the picture certain legal disputes. To ensure that these disputes are resolved in the most mutually effective structure, and also that it does not portray a negative picture in the market of the parties involved.

Following this on the lines of global arbitration centers like Singapore, Australia. India is going to start its first arbitration and mediation Centre mainly focused on resolving international disputes related to the shipping sector. Which will come up in the Gujarat International Finance-Tech (GIFT) City in Gandhinagar. With which India will be the part of such maritime flourishing countries hosting international arbitration. Also helps in attracting FDIs, increased proximity between National and international business. Which eventually rival India as a leading financial capitals of the world.

Hani Dipti

Cnlu patna

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