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Abstract<\/span><\/strong><\/span><\/p>\n With a<\/span>coastline<\/a> of 7,516.6 kilometres, the Indian peninsula has engaged in trading via <\/em>sea right from the primaeval times. It has always been one of the strongholds of the Indian economy, to date. As a result of which, India has<\/span>captured around<\/a> 30% of the ship-breaking facility, and possesses the largest ship-breaking facility at Alang. Additionally, the Ports & Shipping industry (maritime transport) grips 70% of India\u2019s total trade concerning value terms. Furthermore, with the introduction of \u2018<\/span>The Maritime India Vision 2030<\/a>\u2019 and a 100% FDI allowance in the Ports and Shipping industry, the government plans on ensuring that India becomes one of the significant contributors to the same.<\/span><\/span><\/p>\n However, easier said than done, international\/domestic trade and business carry an array of disputes. Specifically concerning maritime disputes as well. Through this blog, the authors would enumerate the aspect of maritime arbitration by primarily giving an introduction, and then enumerating the intricacies of the aforementioned sector concerning the Indian diaspora. Additionally, the authors would also discuss the challenges faced by the said sector.<\/span><\/p>\n <\/u><\/strong><\/p>\n Introduction<\/strong><\/span><\/p>\n India\u2019s successful tryst with maritime heritage, and history<\/span>date back<\/a> to 3000 BC. Indians dominated the Indian Ocean right from the beginning of the 13th<\/sup> century, and employed the option of commerce and trade in an amicable fashion till the 16th<\/sup> century India. Additionally, India played a vital role in the incorporation of the<\/span>UNCLOS<\/a> (United Nations Convention on the Law of Sea), which heavily derives its inspiration from Hugo Grotius\u2019 work, Mare Librum, <\/em>which enumerates that the sea is a free territory, with the merchants and traders employing the sea routes to successfully carry out their trading activities. These led to the development of<\/span>\u2018maritime law\u2019 or \u2018admiralty law\u2019<\/a> which is composed of a number of laws, conventions, and treaties, which looks into the aspect of maritime business and allied matters, which are of nautical nature. At the international level, the<\/span>IMO<\/a> (International Maritime Organisation), a specialized agency of the United Nations, serves as the global standard-setting body for the safety, security, and environmental performance of international shipping. Specifically, IMO’s role is to establish a regulatory framework that is equitable, accepted by all countries, and adhered to without exception. This approach ensures that shipping companies do not seek financial gain at the expense of safety, security, and environmental protection. Additionally, it incentives innovation and efficiency.<\/span><\/span><\/p>\n As far as the Indian legal regime is concerned, the Government of India, right from 1947, has taken special care for creating a healthy environment for trade practices via <\/em>the sea route. Shipping regulations in India are overseen by the government, through the<\/span>Ministry of Shipping<\/a>. This Ministry has established the<\/span>Directorate General of Shipping<\/a> (DG Shipping) as a semi-autonomous statutory body to administer the<\/span>Indian Merchant Shipping Act, 1958<\/a> (MSA). This Act grants the DG Shipping the power to issue circulars and notifications covering various aspects of shipping policy and legislation, as well as to implement the various international regulations from the International Maritime Organization. The<\/span>Mercantile Maritime Department<\/a> (MMD), which is answerable to the DG, is responsible for the registration of Indian-flagged vessels, ship surveys, and enforcement of regulations such as SOLAS and Load Line Conventions. All ports in India are owned and controlled by the state and union governments, except for 12 major ports. The 12 major ports, are those which<\/span>work on the PPP (Private Public Partnership)<\/a> model. This measure comes after the implementation of the New Economic Policy of 1991, where the privatisation of the ports commenced in the year 1997, which not just renewed the major ports of the country in a renewed manner, but also triggered foreign investments in the country.<\/span><\/span><\/p>\n <\/strong><\/p>\n Introduction to Maritime Arbitration<\/strong><\/span><\/p>\n Having got an idea of the maritime sector, both at the international level, and the domestic level, we now enumerate upon the employment of \u2018arbitration\u2019 as a dispute redressal method in the aforementioned sector.<\/span>Maritime disputes<\/a> may arise from a number of issues, encompassing ship finance, construction, sale, and acquisition, as well as deployment, carriage of commodities, insurance, cargo transportation, and other marine ventures. Additionally, such disputes may arise from other contractual relationships connected to the utilisation of ships, such as salvage operations, et cetera. Instead of engaging in a long, cumbersome, and tedious courtroom battle(s), the parties choose maritime arbitration as a method of dispute resolution.<\/span><\/span><\/p>\n Maritime arbitration can be traced back to the concept of international commercial arbitration, with the sole difference lying in the approach, the aforementioned concepts undertake. While<\/span>international commercial arbitration<\/a> takes into cognisance the redressal of disputes (largely concerning commercial transactions) between two or more individuals, who do not share a common citizenship, in order to avoid litigation. On the other hand,<\/span>maritime arbitration involves<\/a> parties from different countries who are likely engaged in complex trade relationships with particular customs or conventions<\/u><\/em>. Therefore, making it is beneficial for the parties to reach an outcome that is<\/span>consistent with the maritime trade<\/em><\/a> world they are familiar with and have some control over. Additionally, \u2018arbitration\u2019 as a dispute redressal mechanism in maritime disputes has been gaining a considerable amount of traction and attention, owing to the infamous practice of forum law. <\/em>It may happen that the lack of specialised adjudicating authorities in a court of law, may lead them to pursue a decision purely based on the domestic law (where the matter has been preferred) which would be completely diverted from the customs and usage of the maritime sector, which have been granted international recognition. This problem is solved with the help of arbitration, which allows individuals to pick arbitrators of their preference, who have the subject-matter expertise regarding the same.<\/span><\/span><\/p>\n <\/u><\/strong><\/p>\n Maritime Arbitration & the Indian Legal Regime<\/strong><\/span><\/p>\n As mentioned above, the sea routes have always favoured India, when we mention the aspect of trade and commerce. In order to swing the winds in favour of the Indian economy, the Union Government has<\/span>employed an array of measures<\/a>, like:<\/span><\/span><\/p>\n 1. Approving a 100% FDI (Foreign Direct Investment) <\/span>via <\/em>the automatic route;<\/span><\/span><\/p>\n 2. Deploying certain incentives as a part of the Income Tax Act of 1961;<\/span><\/p>\n 3. Creation of Joint Ventures (JVs) between major ports of India, and their foreign counterpart, coupled with non-major ports, and private companies; and<\/span><\/p>\n 4. Creation of an infrastructure, where important documents like that of Request for Qualification (RQF) and Request for Proposal (RFP) conform to a particular standard.<\/span><\/p>\n In India, the rules concerning maritime arbitration are dictated by the Indian Council of Arbitration, which has a specific division called as \u2018<\/span>The Maritime Arbitration Rule of the Indian Council of Arbitration<\/a>.\u2019 These rules govern the process of domestic and international maritime arbitration in India. The aforementioned rules encompass aspects like: the maritime arbitration committee, the functions of the aforementioned committee, the scope of application, awards, et cetera. Furthermore, the scope of maritime arbitration has increased, with the establishment of the Gujarat International Maritime Arbitration Centre (GIMAC), which is the country\u2019s premier arbitration and mediation centre concerning the marine and shipping industries. The establishment of GIMAC comes as a relief, as out of the 35 arbitration centres around the country, none of them are solely focused on the marine industry.<\/span><\/span><\/p>\n By the virtue of<\/span>Rule 3(1) of the Maritime Arbitration Rules<\/a>, a dedicated committee called as the \u2018Maritime Arbitration Committee\u2019 has been established, whose functions include the empanelment of arbitrators, reviewing the progress of the cases as brought under the maritime sector, the appointment of arbitrators, et cetera<\/span>(Rule 4)<\/a>. Additionally, the Rules also provide for qualification, and the required know-how, as a mandatory feature for being appointed to the Maritime Arbitration Committee<\/span>(Rule 5).<\/a><\/span><\/p>\n However, there exists certain challenges<\/u> <\/em>to the Indian Maritime Arbitration regime. It is through the below-mentioned challenges, which would attempt to justify the Indian Maritime Arbitration regime to be a<\/span>Birbal\u2019s khichdi<\/em><\/a> in the contemporary world.<\/span><\/span><\/p>\n This lacuna has been acknowledged, and mentioned in the<\/span>Maritime India Vision 2030<\/a>. It has been specifically mentioned that as of now, India lacks proper infrastructure for the resolution of disputes as compared to LMAA, SCMA, EMAC, and TOMAC. Additionally, it was acknowledged that by the year 2030, India would have a set infrastructure for maritime arbitration in India, specifically when the parties involved in dispute have Indian citizenship. This would be made possible by the creation of the Indian Maritime Arbitration Association (IMAA), which would be an \u2018institutional arbitration system\u2019 with inspiration and recommendations drawn from the<\/span>Arbitration and Conciliation (Amendment) Act of 2015<\/a>. Additionally, it would ratify the LMAA guidelines in such a manner that it suits the Indian diaspora, and at the same time make the same feasible for international players, which majorly compose of foreign investors.<\/span><\/span><\/p>\n\n
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