Last year the LMAA gave its rules a workover, with new terms applying to all such arbitrations started on or after 1 May 2017. The main changes were as regards sole arbitrators (appointment by LMAA President to foil a stalling party), written submissions (to curb excess) and settlement offers (can be taken into account, though falling outside CPR Part 36).

This year it was the turn of FOSFA, which has issued revised Arbitration Rules. These will apply to all FOSFA references under contracts concluded on or after 1 April 2018, with the 2012 Rules continuing to apply as regards prior contracts.

We here summarise what we consider are the core matters, with some brief commentary.

Time limits

The themes are extension and simplification, with longer time limits and fewer claim categories, as follows:

Claims as to quality and/or condition

The limitation period is now 90 consecutive days, running:

  • from completion of discharge in CIF, CIFFO, C&F etc contracts; and
  • from completion of delivery in FOB and ex-tank, mill and store arrangements.

This greatly lengthens the former familiar 21 consecutive days from completion of discharge or delivery, and does away with the divergence involving certification which (where applicable) cut that to just 14 consecutive days from the final analysis certificate.

However, while, compared to just three or sometimes two weeks, 90 days may seem generous, limitation periods regularly cause difficulty whatever their duration.

As a general observation, parties and their advisers alike must take care to identify the relevant triggers and log precautionary and countdown dates. They must also promptly attend to seeming formal but sometimes vital matters like authority to act, and also who on the opposing side can validly receive notice of commencement.

That might not be the regular counterparty in the operational correspondence and should be checked in good time.

Other claims

Though treated differently under the 2012 Rules, with a time limit of 60 consecutive days from when the dispute arose (which can sometimes be difficult to pinpoint), money claims now carry the same time bar as all others not involving quality and/or condition.

For all such claims the limit is 120 consecutive days from:

  • for CIF, CIFFO, C&F etc contracts, the later of (i) the end of the shipment period (ii) completion of discharge;
  • for FOB and ex-tank, mill and store arrangements, the end of the delivery period;

Submissions

The deadlines for filing written submissions in quality and condition disputes are also extended, such that:

  • the claimant now has 30 consecutive days from the appointment of the respondent’s arbitrator to file claim submissions; and
  • the respondent likewise now has 30 consecutive days from receipt of the claim submissions to file submissions in response.

In all other types of dispute the general provision that submissions are served without delay is unchanged.

Structure

Just as for GAFTA there are still two tiers, with any appeal going to the FOSFA Board of Appeal.

However, where before it was generally two arbitrators plus an umpire if they disagreed, three arbitrators is now regular for the first tier, one appointed by each side and the third, who acts as chair, by FOSFA.

The parties can still agree a sole arbitrator, instead.

Payment of deposit

Deposits are now standard, and are payable by the claimant within 30 days of appointment of the sole or third arbitrator.

Conclusion

As for the LMAA last year, these alterations present as revisions rather than sweeping changes. They should simplify many claims by avoiding disputes as to their nature, and perhaps lessen the number of matters and quicken the overall process by allowing more time, which the parties should put to good use in all aspects of decision, preparation and progress.

If you would like to discuss anything arising from this commentary please contact Ed Floyd at ed.floyd@floydzad.com and +1 (917) 999 6914 or Luke Zadkovich at luke.zadkovich@floydzad.com and +1 (917) 868 1245 / +44 (20) 8068 6844.  This article is to be considered general commentary only and not to be relied upon as legal advice for any particular circumstances.

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