SYNOPSIS Dispute Settlement in International Trade and Investment

Dispute Settlement in Maritime Insurance Law.

Ravindra Kumar Purohit 09B096

Submitted to : Dr. Udayakumara Ramakrishnan B.N.

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INTRODUCTION Maritime law has always shown a prominent degree of consistency. Shipping is a general activity. It has a history as long as mankind. It has been known across all littoral and riparian parts of the earth. Ample reference to maritime activity and attendant commercial law can be found in many sources concerning the conduct of maritime commerce in all parts of the world: the Persian Gulf, the Arabian Sea, the Tigris-Euphrates Basin, the Mediterranean Sea, Africa and its coast, the Black Sea, India, and the Indian Ocean, South-East Asia, the Pacific, China and North Asia, the North Sea and the Baltic, the great rivers of Europe and Eurasia, and the Americas. The great commercial centres of the Middle East Baghdad, Damascus, Alexandria and others supported a cosmopolitan commercial society from ancient to modern times. The Indian Ocean has nurtured commercial and maritime activity for millennia. The monsoons enabled trade from the Red Sea to Asia, with seasonal winds to China, the Philippines and North Asia.1 Malabar teak, coconut fibre, flax, cotton and metals made India a flourishing site of shipbuilding. The 20th century saw the development of attempts at the international harmonisation of commercial and maritime law. In the first half of that century, the attempts at unification or harmonisation of commercial law were dominated by maritime law and maritime lawyers. Carriage of goods under bills of lading was an excellent example. Attempts at harmonisation have spawned important, private and public bodies. Until the formation of the Intergovernmental Maritime Consultative Council (IMCO) later to become the International Maritime Organisation (IMO) and other United Nations bodies whose activities touch on maritime affairs,2 the Comit Maritime International (CMI) played the leading role in the development of international conventions and rules concerning maritime law.3 After The Torey Canyon disaster, the IMO began to undertake the primary burden of promulgation of maritime treaties, conventions and standards at least of a character dealing with

The Hon. Justice James Allsop, "International Maritime Arbitration: Legal and Policy Issues," http://www.acica.org.au/downloads/International Maritime Arbitration Malmo and Sydney.pdf (accessed September 10, 2013).
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The United Nations Conference on Trade and Development (UNCTAD); UNCITRAL: The United Nations Commission on Uniform Trade Law created by unanimous resolution of the General Assembly of the United Nations on 20 December, 1966; UNIDROIT: The International Institute for the Unification of Private Law was established by multilateral treaty in 1926
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Covering transport of goods, carriage of passengers and luggage, collision and navigation, salvage and general average, limitation of liability, pollution liability and compensation therefore, maritime liens and claims, registration of ships, mortgages, arrest, classification societies, off-shore mobile craft and stowaways.
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safety, the environment and technical matters.4 The CMI remains significantly influential. Its role has been somewhat redefined to co-operation with intergovernmental organizations seeking to harmonize maritime law. It is over 100 years since maritime lawyers last made a concerted and international attempt to agree the harmonization of certain basic issues of marine insurance law. That attempt took the form of the Buffalo Conference of the International Law Association in 1899, which in turn led to the adoption of The Glasgow Marine Insurance Rules in 1901. Even they were replaced by the 1906 UK Marine Insurance Act. Throughout the 19th century, marine insurance was practised in most parts of the world under the influence of the 1906 UK Act. Regional initiatives such as those in Scandinavia have made their mark in seeking both certainty and reform. But for many countries that inherited the 1906 Act directly or indirectly, marine insurance law has remained static and relatively stable, and that stability has been reflected in the comparative paucity of reported marine insurance cases in most maritime jurisdictions. Unfortunately, the stability of the law of marine insurance has not been mirrored in a like stability in marine insurance practice. Many sectors of the industry now face survival challenges. Perhaps it was these same hard times that in turn prompted an evaluation of the national legal regimes in which marine insurance operates. In the 1990s, initiatives were started in the USA, Australia, New Zealand, China, and South Africa (to name but a few) to examine domestic marine insurance laws. And in those countries which are closely influenced by the 1906 Act, the evaluation began with a re-examination of whether or not the 1906 Act continued to serve the industry in the changed times and market circumstances of the approaching 21st century

SIGNIFICANCE OF THE STUDY Maritime insurance is a very important aspect in the field of overseas commerce and internal trade for a country. It is closely linked with banking and shipping. Banks generally finance the goods which are transported by the ships or by other means of transport in case of internal trade and marine insurance protect such goods against loss or damage. Without such protection the entire trade structure is bound to suffer. 5

CMIs contribution to the work of the Legal Committee of the IMO has been huge, in particu lar in drafting conventions on carriage, limitation of liability, maritime assistance and salvage and arrest, harmful and noxious substances, places of refuge, fair treatment of seafarers and wreck removal.
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A Reference note released by Government of Maharashtra. Available at https://mgif.maharashtra.gov.in /SITE/PDF/ Products/MarineInsurance.pdf (As accessed on 22 march 2014)
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Marine Insurance can be divided broadly into two groups Cargo Insurance Hull Insurance

As stated earlier, Marine Insurance is closely linked up with the trade of a country internal as well as international. A sale contract which is an essential feature in the trade involves a seller and a buyer, apart from the other parties like the carrier, the bank, and the clearing agent. The question that Whether the insurance of the goods in transits is to be the responsibility of the seller or the buyer, depends on the type of the sale contract in any transaction. This paper will be aiming at a better understanding of the law related with the marine insurance and the prevaling disputes and developments that the insurance industry has faced over the years to devlop into its current form and structure. The insurance industry has grown over the years and the amount of trade that has been done is on the practices followed by the industry. The national, international and treaty based legislations are however not in consonance with the prevaling practices of the industry and such inconsistencies need to be examined by the means of this paper.

REVIEW OF LITERATURE Susan hodges is a lecturar at the department of maritime studies at the university of wales. Hodges is undoubtedly an authority on the law of marine insurance. She has very catagorically and precisely listed out the areas and aspects that are related to a maritie insurance and has nicely conceptualised the principles of indemnity into the technical and complex aspects of maritime law and shipping. (Hodges Susan, Law of Marine Insurance, Cavendish Publishing limited, 1996.) Susan hodges is undoubtedly an authority on the law of marine insurance. In this book she has nicely examined the Marine insurance law with the help of cases and different reading materials on the issues that she has dealt with in her earlier book which was published in the year 1996. The cases and materials give an insight to different issues that are related with the dispute settlement of a marine insurance dispute. (Hodges Susan, Cases and materials on Marine Insurance laws, Cavendish Publishing limited, 1999) This book gives an overview of the law of the carriage of goods by sea. The books has nicely explained the basic concepts that are related to bills of lading, ship voyage, a Charter party and other important terms that affect a maritime contract. The case law is presented under seperate headings. Examples of standard forms of contract are included and full consideration is given to the Carriage of Goods by Sea Act 1971, the Carriage of Goods by Sea Act 1992 and the Hague-Visby Rules
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(A.D Hughes, Casebook on Carriage of Goods by Sea, Blackstone Press Ltd; 2nd edition August 1, 1999.) This paper seeks to deal with some important underlying policy questions faced by legislatures, governments and courts in dealing with the issues thrown up by international commerce and dispute resolution, and, in particular, maritime commerce and dispute resolution. (The Hon. Justice James Allsop, "International Maritime Arbitration: Legal and Policy Issues," http://www.acica.org.au/downloads/International Maritime Arbitration Malmo and Sydney.pdf (accessed on March 20, 2013).

RESEARCH OBJECTIVES 1. To investigate the nature and form of disputes in Marine insurance. 2. To explore the ways that is in vogue in settlement of dispute in a Marine insurance Business. 3. To identify the inconsistency between the industries practice and the current legal systems.

HYPOTHESIS 1. The laws and legislations relating to dispute settlement in marine insurance disputes are not consistent with the practices of the marine insurance industry. 2. Companies dealing in Marine Insurance business have found new ways to manage risks and settle disputes in Marine Insurance Sector.

RESEARCH QUESTIONS 1. What is the nature of Marine Insurances? 2. What are the requirements for getting a Maritime Insurance policy? 3. How do Shipping Companies deal with the changing markets and choosing the best marine policy? 4. What is the nature of a marine insurance dispute and how is it settled? 5. Is international law equipped with provisions to deal with disputes arising from this arena of law?

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SCOPE This paper shall deal with definitions, comments, statements, and practical data dealing with marine insurance. It will deal with the methods of dispute resolution that are being adopted in international disputes in maritime trades by companies dealing with it. The efficacy and efficiency of these methods will be analyzed in the course of this research paper. The study is restricted to the point of analysis of risk factor in Marine insurance and the ways in which the dispute have been settled and how a mechanism has evolved from the practices of the industry and respective suggestions have been made on the basis of study. As the study is doctrinal and is based on the data that were collected by previous research scholars, thus one of the limitations happen to be the reliance on the data that were collected by other research scholars. Secondly, the reading material on such a niche topic is scarce and old. The online database which is available is also scattered and limited.

RESEARCH METHODLOGY The research methodology followed in this project is doctrinal, wherein all relevant Primary and Secondary sources on the point have been referred to. Effort has been made to cover all the important areas pertaining to the topic with extra emphasis on the more important ones. Relevant material has also been referred to from the internet. All material so referred has been duly acknowledged. Pertinent authoritative texts that best relate to the topic at hand have been cited with their most recent position emphasized upon. Best efforts have been taken to make the research as comprehensive as possible, and views from several authors over the same point have been quoted, thus offering a varied and complete outlook to the project. Different interpretations of these legal documents by various legal scholars have been incorporated in the analysis.

TENTATIVE CHAPTERIZATION 1. Introduction. The first chapter is the introduction to the concept of maritime insurance. This chapter will deal with the evolution of the maritime insurance form its inception to its development till the 21st century and the legal system that has developed in different jurisdictions to govern and regulate the principles of marine insurance. 2. Types of Marine insurance policies and risks covered by them. A marine insurance is a very broad term. There is a broad spectrum of insurance policies that are available for a party to choose from. An insurance policy which is chosen by a
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party is depending upon terms of letter of credit/ export order and clauses of the contract entered between the parties. 3. Current legal system on Marine Insurance. This chapter deals with the current laws, international treaties, conventions and charters that have been drafted in different systems by the legislature, international organizations and committees. It analyses the scope of the current legal system governing the Law of marine insurance and the dispute settlement mechanism that has been provided in it. 4. Practices of the industry in marine insurance business. There has been a huge discussion in the international arena with respect to the inconsistency between the legal system and the practices of the industry in marine insurance with respect to the settlement of disputes. This chapter analyses those inconsistencies and the ways in which the Marine industry has evolved to develop its own mechanism for dispute resolution. 5. Disputes Settlement in marine insurance cases This chapter deals with the decided cases and instances of disputes in the marine insurance law. It will also try to reflect upon the disparity in the current legal system and practices of the marine insurance industry with respect to the settlement of the disputes and reflect upon how the industry has developed its own practices and procedures for settlement of disputes. 6. Conclusion. The conclusion of this paper will be based on the relevant findings that will be made in due course. However, one of the conclusion will be based on the fact that the laws governing the dispute settlement mechanism in the marine insurance are old and are inconsistent with the changing times and practices that have evolved from the marine insurance industry.

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BIBLIOGRAPHY Primary Sources: 1. 2. 3. 4. 5. 6. Marine insurance act 1906 (United Kingdom) Carriage of goods by sea act 1925.(India) Carriage of Goods by Sea Act 1971. (United Kingdom) Carriage of Goods by Sea Act 1992. (United Kingdom) Heague Rules 1924. The Hamburg rules of 1978.

Secondary Sources: 1. Hodges Susan, Law of Marine Insurance, Cavendish Publishing limited, 1996 2. Hodges Susan, Cases and materials on Marine Insurance laws, Cavendish Publishing limited, 1999 3. A.D Hughes, Casebook on Carriage of Goods by Sea, Blackstone Press Ltd; 2nd edition August 1, 1999 4. The Hon. Justice James Allsop, "International Maritime Arbitration: Legal and Policy Issues," http://www.acica.org.au/downloads/International Maritime Arbitration Malmo and Sydney.pdf (accessed on March 20, 2013 5. A Reference note released by Government of Maharashtra. Available at https://mgif.maharashtra.gov.in /SITE/PDF/ Products/MarineInsurance.pdf (As accessed on 12 march )

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