New York vs. London Arbitration Rules
The preferred method of settling these disputes for maritime contracts is arbitration. Maritime dispute arbitration is typically conducted either in London, using LMAA rules, or in New York, under SMA rules. There are other venues, as well. Germany, for example, has an increasingly active arbitration society. The nature of your business, the particular transaction and the location of both will likely be determining factors in deciding where to specify arbitration in your charter party. While your contract will clearly establish the agreed upon terms, choosing a jurisdiction and the form of arbitration are crucial because it will ultimately tie the parties to a particular procedure. Below is a brief explanation of NY and London laws, however your understanding should really start with your SPI Marine broker.
Arbitration in London
According to the London Maritime Arbitrators Association (LMAA), more maritime disputes are referred to arbitration in London than to any place in the world. An estimated 2,500 maritime arbitrations are initiated in London each year and more than 360 awards were published. A sole arbitrator usually decides the case, however parties may decide to appoint legal advisers. The experience and volume of work conducted through the LMAA process is often given as a reason to go here.
Arbitration in New York
Typically, New York arbitration is conducted using the Society of Maritime Arbitrators (SMA) rules. Here three arbitrators will review your case with decisions being final and binding in the U.S. and abroad. The SMA touts the enforceability abroad, cost-efficiency, security (remedy) and speed of its service as key reasons why to use its venue.
Resources
Society of Maritime Arbitrators (SMA): http://www.smany.org
London Maritime Arbitrators Association (LMAA): http://www.lmaa.org.uk