International Journal of Law And Criminology
13
https://theusajournals.com/index.php/ijlc
VOLUME
Vol.05 Issue03 2025
PAGE NO.
13-16
10.37547/ijlc/Volume05Issue03-03
The role of commercial arbitration in resolving transport
disputes: international practice
Jumayeva Sevinch Shokirovna
Master's student of the faculty of “International Law” in the majoring in International Business Law of the University of World Economy
and Diplomacy, Uzbekistan
Received:
03 January 2025;
Accepted:
05 February 2025;
Published:
07 March 2025
Abstract:
The article examines the role of commercial arbitration in resolving transport disputes, with a focus on
international practice. Special attention is given to the advantages of arbitration over litigation, as well as the
challenges associated with the enforcement of arbitral awards in different jurisdictions. Major arbitration
institutes, such as the London Maritime Arbitrators Association (LMAA) and the International Chamber of
Commerce (ICC), are reviewed. The article also analyzes differing scholarly views on the effectiveness of
arbitration in transport disputes, highlighting issues related to the enforcement of awards and the high costs of
arbitration procedures.
Keywords:
International commercial arbitration, Chamber of Commerce and Industry, investment climate,
Arbitration Court, legal framework, business, economics.
Introduction:
Commercial arbitration plays a key role in
resolving disputes arising in the field of transport law,
especially
in
the
context
of
international
transportation. The development of global trade and
the increase in the volume of cargo transportation
require effective dispute resolution mechanisms that
can take into account the specifics of transport
operations and ensure prompt and fair resolution of
disputes. Commercial arbitration provides such
opportunities, offering an alternative to state litigation.
This article examines the international practice of using
arbitration to resolve transport disputes, including its
advantages, features and the main arbitration
institutions.
Transport disputes cover a wide range of issues related
to the carriage of goods and passengers, the use of
vehicles, and the performance of transport contracts.
The most common disputes in this area concern:
• Violations of the terms of carriage;
• Damage or loss of cargo;
• Disputes under charter agreements;
• Claims under bills of lading;
• Issues related to d
elay or failure to perform
obligations.
Since these disputes often arise in an international
context, involving parties from different jurisdictions,
arbitration has become a preferred method of dispute
resolution due to its flexibility and the recognition of
arbitral awards in many countries, which is ensured by
the New York Convention of 1958[1, Article 1].
One of the key advantages of arbitration in transport
disputes is its international nature. Since transport
operations often involve crossing borders, arbitration
provides a more neutral and universal forum for
dispute resolution compared to national courts. This is
especially important in cases where the parties to the
contract are located in different countries with
different legal systems. Commercial arbitration also
attracts parties due to the ability to appoint arbitrators
with specialized knowledge of transport law. This is
especially relevant in complex cases related to
maritime
transport,
which
require
a
deep
understanding of the specifics of charter parties, bills of
lading and insurance terms [2, p. 1325]. Arbitration
provides the parties with a high level of confidentiality,
which can be important for protecting commercial
secrets and the reputation of companies. In addition,
arbitration allows the parties to independently
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International Journal of Law And Criminology (ISSN: 2771-2214)
determine the procedural rules and the place of the
proceedings, which makes it more flexible than
litigation [3, p. 302].
Major Arbitration Institutions in Transport Disputes
One of the most prominent arbitration institutions
specializing in maritime and transport disputes is the
London Maritime Arbitration Association (LMAA).
LMAA provides a platform for resolving disputes
related to shipping, including charter parties and bills
of lading. LMAA is known for its specialized approach
and highly qualified arbitrators, making it one of the
most popular forums for maritime disputes [5, p. 15].
The International Chamber of Commerce (ICC) also
plays an important role in resolving transport disputes,
especially in international trade. The ICC Court of
Arbitration offers flexibility in the choice of arbitrators
and procedural rules, making it popular among
companies involved in global supply chains [6, p. 45].
The Singapore International Arbitration Centre (SIAC)
has become an important arbitration center for Asian
companies, including shipping and logistics firms. SIAC
offers fast and efficient dispute resolution procedures,
which appeals to companies operating in the dynamic
environment of the Asian market, where prompt
resolution of conflicts is important [7, p. 22].
Examples of Arbitration Disputes in the Transport
Sector
International practice shows that commercial
arbitration is widely used to resolve disputes related to
transport, especially in the area of maritime law. One
of the well-known examples is a case considered by the
London Maritime Arbitrators Association (LMAA)
concerning a dispute under a charter party agreement,
in which the charterer made claims against the
shipowner for delay in delivery of cargo (demurrage).
The arbitrators ruled that the shipowner was not liable
for the delay, since it was caused by adverse weather
conditions, which qualified as a force majeure
circumstance according to the terms of the contract [8,
p. 12].
In addition, the ICC considered a case on the late
delivery of cargo by air, where the arbitrators ruled in
favor of the shipper, who suffered losses due to the
violation of delivery times. The award was enforced
under the New York Convention in the carrie
r’s
jurisdiction [9, p. 37].
Another example concerns a bill of lading dispute
considered by the International Chamber of Commerce
(ICC). In this case, a shipper filed a claim against the
carrier for damage to the cargo during transportation
by sea. The carrier claimed that the damage was caused
by insufficient packaging of the cargo, but the ICC
arbitrators sided with the shipper, pointing out the lack
of evidence of adequate actions by the carrier to
protect the cargo during the voyage [10, p. 43]. In this
case, the arbitration award was recognized and
enforced under the New York Convention in the
carrier’s jurisdiction, which demonstrated the
effectiveness of arbitration as a mechanism for
resolving disputes with an international element.
Another illustrative example of arbitration in the
transport sector was considered by the Singapore
International Arbitration Centre (SIAC) and concerned
a dispute over the failure to meet the schedule of
delivery of air cargo. The consignee claimed damages
for financial losses incurred due to the delay in delivery,
and the arbitrators ultimately awarded compensation,
finding the delay in delivery to be material [11, p. 29].
Problems and Prospects of Using Arbitration in
Transport Disputes
Despite the obvious advantages of arbitration, there
are certain problems. One of them is the length of the
process of enforcing an arbitration award, especially if
it is made in one country and its enforcement is
required in another. For example, in some developing
countries, there may be difficulties with the recognition
and enforcement of arbitration awards [1, Article 3].
The issue of using commercial arbitration to resolve
transport disputes generates many discussions among
researchers. On the one hand, many scholars support
arbitration as a preferred method of resolving disputes
in international transportation. Thus, Gary Born argues
that arbitration offers a number of advantages,
including neutrality, flexibility and the ability to involve
highly specialized arbitrators, which is especially
important in complex transport cases [4, p. 96]. Born
also notes that, thanks to the New York Convention of
1958, arbitration awards are recognized and enforced
in most countries of the world, which makes arbitration
more attractive for companies operating in the
international sphere [4, p. 224]. However, critics such
as William Tetley have raised concerns about the
practical implementation of arbitration awards. He
points out that in countries with developing legal
systems, it may be difficult to enforce arbitration
awards, especially if jurisdictions do not fully comply
with international standards of enforcement [2, p.
1325]. In addition, Tetley points out that arbitration can
be expensive and lengthy, making it less attractive to
smaller shipping companies or market participants with
limited resources [2, p. 1328]. While arbitration
provides a more flexible means of dispute resolution,
its disadvantages, such as high costs and problems with
enforcement, continue to be debated by scholars.
Effective use of arbitration can reduce the time and
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International Journal of Law And Criminology (ISSN: 2771-2214)
cost of conflict resolution, preserve business
relationships, and ensure confidentiality. Below are key
recommendations for the effective use of arbitration in
the shipping industry.
Including an Arbitration Clause in Contracts
In order for arbitration to be used in the event of a
dispute, it is important to include an arbitration clause
in contracts in advance. When drafting an arbitration
clause, the following should be taken into account:
• The precise indication of t
he arbitration div (for
example, the Chamber of Commerce and Industry, the
International Commercial Arbitration Court at the
Chamber of Commerce and Industry of the Republic of
Uzbekistan, etc.).
• The place of arbitration. This may be important in
terms of jurisdiction and applicable law.
• Applicable law. It is necessary to indicate which
national legislation will be applied when resolving the
dispute.
• The number of arbitrators. Usually one or three
arbitrators are appointed, depending on the
complexity and amount of the dispute.
• The language of arbitration. It is important to
determine in advance what language the arbitration
will be conducted in.
Selecting professional arbitrators
The effectiveness of arbitration proceedings largely
depends on the competence of the arbitrators. It is
recommended to select arbitrators with experience in
the transport industry, who understand the specifics of
logistics, transportation and international transport
conventions. This will help speed up the process and
reduce the likelihood of making decisions that do not
take into account industry specifics.
Timely use of arbitration
It is important to promptly seek arbitration to resolve
disputes. Delays in filing a claim can lead to
complications in the situation and increase losses.
Arbitration should be viewed as a tool that can help
promptly resolve a conflict and minimize the
consequences for the business.
Estimating the costs of arbitration and the
proportionality of the dispute
Arbitration can be less expensive than litigation, but its
cost depends on the complexity of the dispute, the
number of arbitrators and the duration of the process.
Before resorting to arbitration, it is advisable to assess
how the costs of arbitration are comparable to the size
and significance of the dispute. In some cases, it may
be more cost-effective to use mediation or other
alternative dispute resolution methods.
Using International Arbitration for Cross-Border
Disputes
The transportation industry often faces cross-border
disputes involving international shipping. In such
situations, arbitration can be particularly useful
because it avoids the complexities of different national
legal systems. International arbitration provides a
neutral forum and flexibility in the choice of applicable
law and venue.
Careful preparation of evidence
For successful arbitration, it is important to prepare all
the
necessary
evidence:
contracts,
invoices,
acceptance certificates, correspondence and other
documents confirming the position of one of the
parties. In the transport industry, documents
confirming the fact of cargo transportation, its
condition and compliance with the terms of the
contract are of particular importance.
Taking into account the specifics of transport
conventions and agreements
When considering disputes related to international
transport, it is necessary to take into account
international conventions, such as:
• Convention on the Contract for the International
Carriage of Goods by Road (CMR),
• Montreal Convention (for air transport),
• UN
Convention on the Law of the Sea (for maritime
transport),
• Convention concerning International Carriage by Rail
(COTIF).
These conventions may contain special rules that
arbitrators are required to take into account when
making decisions.
Conducting pre-trial negotiations
Before applying to arbitration, it is recommended to try
to resolve the dispute out of court. This can save time
and money, as well as preserve business relations
between the parties. In some cases, arbitration
procedures include a mandatory negotiation or
mediation stage before the proceedings begin.
Despite this, commercial arbitration is currently the
most effective mechanism for resolving transport
disputes due to its flexibility, confidentiality and
international recognition of arbitral awards. Major
arbitration institutions such as the LMAA, ICC and SIAC
provide specialized services that help shipping
companies resolve disputes effectively. Despite the
existing problems associated with the enforcement of
arbitral awards in certain jurisdictions, arbitration
remains
the
preferred
choice
for
resolving
international transport disputes.
International Journal of Law And Criminology
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International Journal of Law And Criminology (ISSN: 2771-2214)
REFERENCES
United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (New York,
1958).
Tetley, William. Marine Cargo Claims. 4th ed., Thomson
Carswell, 2008.
Redfern, Alan, et al. Law and Practice of International
Commercial Arbitration. 5th ed., Sweet & Maxwell,
2009.
Born, Gary B. International Commercial Arbitration.
2nd ed., Kluwer Law International, 2014.
LMAA Terms 2021, London Maritime Arbitrators
Association.
ICC Arbitration Rules 2021, International Chamber of
Commerce.
SIAC Arbitration Rules 2016, Singapore International
Arbitration Centre.
8.Case no. 2020/32, London Maritime Arbitrators
Association.
ICC Arbitration Case No. 21123/ASM, International
Chamber of Commerce, 2018.
ICC Arbitration Case No. 21362/ASM, International
Chamber of Commerce, 2019.
SIAC Arbitration Case No. 2017/87, Singapore
International Arbitration Centre.
