The LMAA has introduced anupdated fast track procedure to deal with claims between USD 100,000 and USD 400,000. The LMAA introduced the new "Intermediate Claims Procedure" ("ICP") in 2009, following consultation with the Baltic Exchange.

The new procedure is intended to be widely applicable to a variety of shipping and commodity disputes within the range mentioned and is intended to enable parties to predict, with some certainty from the outset, the likely cost of proceedings.

Briefly, the main terms of the ICP are:

  1. The ICP applies to any disputes which the parties have agreed should be referred to arbitration under this procedure.
  2. The procedure will apply where either (a) the total amount of the claimant's claims or the total amount of any counterclaims exceed any applicable agreed upper limit under the LMAA Small Claims Procedure; or (b) USD 100,000 but where neither the total amount of the claimant's claims nor the total amount of any counterclaims exceed USD 400,000 or such other sum as the parties may agree (exclusive of interest and costs).
  3. The parties are free to agree on the composition of the Tribunal but, in the absence of agreement, the tribunal is to consist of three arbitrators, appointed one by each party and the chairman, by the two so appointed. Each party has to appoint an arbitrator not later than 14 days after service of a request in writing by either party to do so.
  4. Factual and expert witnesses are permitted if the parties comply with the relevant procedural requirements and otherwise with the permission of the Tribunal, but with limited scope.
  5. There is no right to an oral hearing and only exceptionally will one will be held. If one is held, it will be limited to a maximum of five hours duration.
  6. The award of the Tribunal will usually be published within six weeks of service of the last submissions.
  7. There is no right of appeal unless the dispute involves a question of law of general interest or importance to the trade or industry in question. This is a matter for the Tribunal to determine.
  8. Costs will be awarded at the Tribunal's discretion but capped at a sum equivalent to 30 per cent of the claimant's monetary claims and distinct counterclaims. The percentages are increased to 50 per cent if an oral hearing is involved. The Tribunal's costs are also capped at up to one third of the total at which the parties' costs are capped where a sole arbitrator is involved, or two thirds in respect of a tribunal comprising two or three arbitrators.
  9. English law will apply, and the seat of the arbitration is London, England.

The ICP will be welcomed by the industry as a cost effective way of dealing with smaller disputes by documents alone. This is often all that is required in a dispute of up to USD 400,000. The legal and arbitration fees are capped and will therefore be proportionate to the sums in dispute, particularly, for example, in relation to a straightforward charterparty dispute which turns on a point of interpretation, where the high expense of an oral hearing cannot be justified.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.