I concluded yesterday – “The trade excels in trade matters but the arbitrators have to acquire experience of legal issues, legal terms, legal expression and there are two reasons for this requirement – first, arbitration is a legal procedure…”
Arbitration in commodities and shipping is the application of (in most cases) English law to commercial disputes. Arbitrators know the Trade and Lawyers know the Law. Maybe a little simplistic – but only a little.
The Trade does know about quality, payment terms, + description of the goods. The trade also knows about Appropriation, Free Alongside/Ex Truck, Transferable L/Cs, Mates Receipts, Demurrage, Notice of Readiness, Phytosanitary Certificates and more.
The Law knows about Jurisdiction, Estoppel, “Trite” terms, Force Majeure, Passing of Risk, Letters of Indemnity, Contract Principles, the Hague Rules, Rights of Bill of Lading Holder, Rights of Third Parties and more.
The process of arbitration is a coming together of Trade and Law. A blend of legal principles and business practice. And there is a gap. Lawyers have never been exposed to an overnight fall in price on a long position and Businessmen/women have never been exposed to overnight deadlines to serve defence submissions.
Now to specifics – for the trader what does “Estoppel” mean; how do I understand “jurisdiction”. And if the submissions before you use the phrase “trite argument” where is my pocketbook dictionary for the word “trite”?
This is something for the Trade and its Associations. How does it assist the Trade by explaining basic legal concepts? There is nothing condescending about this. Just a recognition that it is “Horses for Courses” – Traders excel at the Trade and Lawyers excel at the Law.
But here the Law has a responsibility and we will look at this further tomorrow.