METHOD OF SETTLEMENT OF INTERNATIONAL MARITIME DISPUTES

In the process of carrying out international transportation of goods, the parties cannot avoid the occurrence of disputes. So, when an international maritime dispute occurs, what should the relevant businesses/individuals do? This article will present the method of settlement of international maritime disputes so that readers can identify and choose suitable for their case.

International maritime disputes

International maritime disputes are a frequent issue in the context of developing international trade activities, especially with a developing country with many maritime trade activities like Vietnam. Along with this development, international maritime disputes are also more diverse and complex. Currently, the most common international maritime disputes include:

• International maritime disputes arise related to the terms of international sales contracts: a place of delivery, delivery time, delivery of goods that are not suitable in quantity or quality…

–      International maritime disputes related to insurance contracts for goods transported by sea; so on…

The method of settlement of international maritime disputes

According to the provisions of Article 338 of the Maritime Code, three methods of international maritime dispute settlement that involved parties can consider are negotiation, mediation or lawsuit at arbitration or a competent court.

Negotiation

Negotiation is the first method of settlement of international maritime disputes that the parties often consider. This is also considered the most effective method when there is a dispute. This method of international maritime dispute settlement saves time, costs, and ensures confidentiality for business relationships.

Mediation

Commercial mediation is a method of resolving commercial disputes agreed upon by the parties and supported by a commercial mediator to act as a mediator to resolve disputes in accordance with the law.[1]

The choice of the method of settlement of international maritime disputes when the parties cannot negotiate and agree with each other and need the presence of a third party to resolve the dispute. However, in order to apply the mediation method, the parties must have an agreement clearly stated in the contract or separate writing.

Filing a lawsuit at arbitration

When there is an international maritime dispute, the parties involved may choose to initiate a lawsuit at commercial arbitration. Reputable maritime arbitration centers in the world are often trusted by the parties to initiate lawsuits such as the London Maritime Arbitration Association or the New York Maritime Arbitration Council, the Arbitration Center Gdynia Balan Maritime, Paris Maritime Arbitration Chamber, China Maritime Arbitration Council, Singapore Maritime Arbitration Chamber, etc.

However, in order to apply this method, the parties need to have an agreement on the settlement of commercial disputes through arbitration and this arbitration agreement must not be invalidated.

Filing a lawsuit at court

Besides initiating lawsuits at arbitration, the parties may choose to settle international maritime disputes by initiating lawsuits at competent courts. Disputes on the international sale of goods may be resolved at the Court in the following cases:

• If the parties do not agree to settle the dispute by arbitration or such agreement is invalid, the court shall have jurisdiction to settle the dispute.
• The parties have agreed to settle the case by arbitration but that arbitration agency has terminated its operation, the arbitrator refuses to settle the case without selecting a replacement.
• The procedural rules selected by the parties are different from the rules of the arbitration center selected and the center does not allow the application of the rules of other centers.
• Consumers do not agree to choose arbitration.

The above is an overview of the method of settlement of international maritime disputes. If you have trouble with legal issues regarding the method of settlement of international maritime disputes, please contact us: Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specializing in business law in Vietnam that has leading practice areas in the legal market such as Intellectual Property, Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing Clients with optimal and effective legal service.

[1] Article 3.1 of Decree No. 22/2017/NĐ-CP.