London remains the capital of maritime arbitration, with 83% of all such arbitrations heard in the city. London’s shipping arbitrators also saw a 14% increase in work, with Singapore and Hong Kong the next most visible competitors to the UK capital, according to HFW’s annual report into the state of London’s market for maritime arbitration.

The report, which surveyed leading arbitral institutions on their caseload statistics, showed London had handled 1,737 arbitrations in 2019, compared to Singapore’s 229 and Hong Kong’s 124.

London’s dominance owes much to the London Maritime Arbitrators Association (LMAA), which handled 1,668 arbitrations in 2019, a rise of 185, with the London Court of International Arbitration (LCIA) and the International Chamber of Commerce handling the rest, with the LCIA taking 33 cases last year and the ICC holding the balance.

Craig Neame, who heads the shipping practice at HFW, a cornerstone practice area for the London-headquartered firm, said the data “clearly shows the extent of London’s continued dominance in the international maritime arbitration industry,” adding that “we see nothing to suggest that will change anytime soon.”

He said that the LMAA retained strong “credibility and trust” among commercial clients, accounting for 96% of all such arbitrations globally in 2019. 

The report also indicated the LMAA had adapted well to the challenges of the pandemic, with approximately 80% of their London maritime arbitration cases conducted using documents only, and provision for both virtual and hybrid hearings. That means for them, it is very much “business as usual” having been unaffected by Covid-19 restrictions, with sets like 7 King’s Bench Walk, Quadrant Chambers, and 36 Stone all busy.

Paul Martenstyn, director of clerking at 36 Stone, who joined the set in June, noted that London’s dominance had history on its side. He said: “Since Edward Lloyd became the reliable source of shipping news at his coffee house in the late 1700’s London has been the centre-of-gravity for the shipping and international trade worlds.”

To him, London was seeing significant digital transformations in the insurance and the legal world, which would only reinforce that pre-eminence.

He said: “Arbitration is one area where we’re seeing a radical-rethink. At 36 Stone we recently conducted one of the first and largest virtual arbitrations in the maritime field and are currently case-managing commodities sector arbitrations.”

Martenstyn ascribed this to London’s “world class infrastructure and technologies”, mentioning the International Arbitration Centre, which has invested in virtual and hybrid technologies. Martenstyn said this would bring “high-end disputes to the capital from all over the world,” supported by courtroom technology experts such as Opus 2, adding “of all the international centres, London has truly stepped up.”

London, then, is a leader. But as Neame noted, “Singapore and Hong Kong remain attractive to companies in Asia,” and it seems the former has the edge over the latter. 

Asian competition

With the LMAA no stranger to Singapore—it held 88 new cases there in 2019 and 78 the year before—the LMAA and the Singapore Centre for Maritime Arbitration, which handled 41 new cases in 2019, have a strong presence.

The market leader, however, remains the Singapore International Arbitration Centre, which presents an increasingly strong and compelling offering, as its own annual results have shown, with the survey estimating it took 95 new maritime cases in 2019, up from 80 the year before.

Overall, Singapore handled approximately 13% of London’s maritime arbitration caseload, which Toby Stephens, head of HFW’s shipping team, ascribed to its strengths as a dispute resolution centre and its innate industry positives. Those include a critical mass of ship-owners, charterers, traders, insurers, legal advisors and supporting experts, which make it particularly attractive for maritime arbitration. 

Stephens added: “It [also] provides a convenient time zone for parties operating from the Middle East and Asia-Pacific, and it is also renowned for being considerate of cultural sensitivities when dealing with disputes within the region.” 

That is something Hong Kong might now struggle with given the current political climate, with other legal commentators questioning the long-term impacts of a new security law imposed by Beijing on the Special Administrative Region.

The Hong Kong International Arbitration Centre (HKIAC) dealt with approximately 44 new international maritime arbitrations in 2019, a slight increase on the 38 it resolved the previous year. Meanwhile, the Hong Kong Maritime Arbitration Group saw 63 cases in 2018, and claimed, albeit unverifiable by HFW, a modest increase in its caseload in 2019. 

The survey said Hong Kong handled the equivalent of approximately 6% of London’s maritime arbitration caseload in 2018, increasing to 7% in 2019, slightly more than half of Singapore’s total. With Chinese shipping interests firmly centred on Hong Kong, that gap may yet widen as parties decide if Hong Kong’s neutrality as an arbitral seat cannot be maintained. 

For now, such centres remain the most obvious—and viable—arbitral alternatives. There are others. Neame noted the UAE had launched the Middle East's first dedicated maritime arbitration centre—the Emirates Maritime Arbitration Centre—which, four years on, is developing its caseload, while the LCIA-DIFC Arbitration Centre is also keen to grow transport work, including shipping.

Closer to home, the report said Paris “remains a centre with its long-standing reputation in Europe for maritime dispute resolution, [and] continues to be a forum worthy of note.” 

Though the total of institutional arbitrations was small, at 2.5%, many ad hoc hearings take place in the French capital, which would indicate a deeper bedrock of work the survey was unable to quantify.

In the Nordic states, Neame said: “The Nordic Offshore and Maritime Arbitration Association was established as an alternative to post-Brexit London for [disputes],” which—given ongoing and disputed trade talks—may yet grow in popularity.

Nonetheless, as Neame noted, “For now, London—and English law—continues to rule the waves.”