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World Maritime Day
Maritime Dispute Resolution in Australia: Some Suggestions for Development
The Hon Justice James Allsop
Friday 30 September 2005
It is with great pleasure that I received the invitation from Dr Michael White to speak today. Meetings such as this of interested
and like minded participants in the Maritime Industry congregating to discuss matters of mutual concern are important. The need for
them lies at the heart of what I wish to say this afternoon.
In this city, almost two years ago to the day, at the 30th annual MLAANZ Conference the Honourable Peter Morris spoke in relation to the recently tabled Independent Review of Australian shipping
prepared by him and the Honourable John Sharp. Peter Morris, gave (what is referred to in current parlance) a “passionate”
speech about the need for all elements of the Australian Maritime Industry to redouble their efforts in the promotion and development
of an Australian industry. If I may say so, it was both a heart-felt and highly intelligent speech about the need for development
of skills, policy and investment in this country.
I cannot hope to approach the matter with the same experience or political insight as the authors of that report. However, I wish
to say some things today about one aspect of maritime endeavour in this country: the resolution of disputes.
By way of preliminary remark may I say that it is your dispute resolution that we are talking about. You, the insurers, ship owners
and charterers, shippers (bulk and other), freight forwarders, stevedores, Port Authorities, port corporations (public and private),
State and Commonwealth maritime departments, AMSA and others, have a primary interest in this topic. If you think change could be
beneficial you should call for it.
The views and opinions expressed hereafter are mine and not given on behalf of the Federal Court.
Geography, history and public policy have sometimes been seen (severally or collectively) as factors militating against a thriving
and self confident maritime dispute resolution service in this country. I hope to show that they need not be so.
As to geography, we have a large island continent with seven State and Territory capital cities, numerous ports and a significant
number of regional commercial coastal cities and towns of importance. With such diversity of commercial activity it is very difficult
to create a critical mass of litigation in one place which is so important for the development of the skills of practitioners. We
have no London in this country and we are not a commercial city state such as Hong Kong or Singapore. Geography also tends to put
us at the end of tram lines for container carriage (though, it should be remembered, at the beginning of the tram lines for bulk
trade).
As to history, we have in the past looked upon ourselves as an appendage of the “Mother Country”. We were, after all,
a colony even after Federation and we have continued to look to the London insurance and broking markets and to English shipping
interests for our models and paradigms. We have also had a legal and intellectual dependence on English law, in particular English
commercial law. The Imperial Merchant Shipping Act, in a number of aspects of its reach, reflected the view that shipping was an
Imperial, not a Colonial, concern. In their most direct forms these matters are, of course, now part of history. However, some of
the cultural forces involved remain.
As to public policy, it is an understatement to say that the Commonwealth, State and Territory governments (of all political stripes)
apparently see few votes in the development of maritime policy either in relation to a maritime industry or maritime service industries,
including dispute resolution. This is so notwithstanding the significant sums of invisible earnings able to be made via an internationally
recognised and accepted service industry such as commercial dispute resolution. What appears obvious, indeed even intuitive, to public
policy makers in London, Singapore, Hong Kong and China, seems to have little or no resonance in this country at the level of government
policy development. It is in most respects not a question of money, but underpinning policy framework that is important. Both are
largely absent.
The challenge to those in the Maritime Industry should be to recognise and deal as best as can be with these three matters.
We cannot change our geography. Therefore we must make a strength of it. We do not have, as I said, the ability to concentrate all
litigation in one place. That should not be seen as a bad thing. We must work around that reality. It is counterproductive for individual
cities, States and Territories to take the view that they will become the “London of the South” in dispute resolution.
Apart from promoting unnecessary rivalry and jealousy, it cannot be done. Unlike Hong Kong and Singapore, we do not have tonnage
or cargo concentrated in an historical and geographic entrepot. However, nor does London, now. But what we do have is widespread
legal and maritime skills of a diverse and thriving character. We have ports all over the country. We have export and import facilities
all around the country. We have ship and boat building and fishing industries all around the country. This diversity and strength
of activity and people should be harnessed.
The second factor (history) can likewise, if recognised for its strength, be brought to account beneficially. Whilst the historical
links with the English legal system have been broken, this country has been left with a legacy of an eminent, distinctly Australian,
legal system.
As to the third factor (public policy), it is important to move beyond pleas for a leading role for co-ordinated government public
policy development and investment in this area. Those participating in the Maritime Industry must develop structures of their own
that best suit them and that will deepen their own prosperity, and, by doing so, drag public policy development in the wake of their
efforts.
There is no reason why this country (and with it New Zealand) should not be at the forefront, together with Singapore, Hong Kong
and China, of the Asia and Pacific regions’ maritime dispute resolution. To be resigned to the contrary is to fail to recognise
the potential of this country and of the various skilled professions in it.
What should be recognised and what should be done?
First and foremost, Australia has one of the best legal systems in the world. That is not hyperbole. It is fact. The High Court of
Australia, the State and Territory Supreme Courts, the Federal Court of Australia and the skilled legal profession underpinning this
superior court structure have always had the respect of equivalent courts and professions world-wide. That is a base which should
be recognised. It is a foundation of great strength. Commercial parties often take it for granted. They should not.
By and large, however, with exceptions in different places, at different times, there has been a lack of organisation in the courts
to bring together, in a coherent way, specialised maritime skill and experience. At the very least, there is a need for the deployment
of judges who, by interest and professional background or judicial training, hold or are able to develop the confidence of the profession,
underwriters and commercial parties, both local and international, to resolve maritime disputes.
There are judges and judicial administrators who question the need for specialisation in dispute resolution and in particular in
maritime dispute resolution. Within the court system, one sometimes hears the view that the notion of specialisation in areas such
as Admiralty and maritime law is an unnecessary affectation. It is, after all, only contract law, so it is said. Many of the views
so expressed are based on both ignorance of the maritime industry and, if I may say so without intended disrespect, a touch of judicial
arrogance.
The profession and the Maritime Industry (if they want it) should demand some degree of specialisation. The courts are an arm of
government. Scarce resources (both human and monetary) are required to be allocated for the resolution of disputes over a full range
of human activity. However, the courts serve the community in their governmental function, and, in this case, a skilled and specialised
part of the wider commercial community. The skilled resolution of maritime disputes by judges with a background in the subject (by
practice or training) is vital to the well-being of this part of the economy and is something the Maritime Industry should expect,
as of right. Australia is one of the great trading nations of the world and one of the great maritime trading nations of the world.
Australian courts should recognise maritime dispute resolution as an important arm of the governmental role that they fulfil, or
that they should be ready to fulfil, in the speedy efficient resolution of commercial disputes.
Secondly, of the utmost importance to the development of the Maritime Industry as a whole, and to the development of maritime dispute
resolution therein, is maritime scholarship. This cannot be overstated. The University of Queensland in its Maritime and Shipping
Law Unit is a beacon to the rest of Australia in this regard. This is not to overlook the important work of the Australian Maritime
College and other maritime colleges, the Nautical Institute, Wollongong University, the Australian Centre for Maritime Studies and
other universities and professional organisations. The University of Queensland has, however, brought together, in a specialised
academic unit, great academics with a genuine love of public and private maritime and shipping law and with an enthusiasm for its
propagation.
The development of maritime scholarship is, I think, the most pressing of this country’s needs in this area. Courts, arbitrators,
barristers, solicitors, underwriters, surveyors, masters, pilots and commercial men and women generally all need a deep and constantly
restored well-spring of knowledge and scholarship. This does not mean that everyone should have a PhD. It does mean, however, that
everyone in the Maritime Industry should recognise the need for knowledge, skill development and scholarship, using that last word
in a broad sense.
Let me illustrate by saying something about scholarship and the courts. The Federal Court of Australia has sought to develop a relationship
of scholarship with the University of Queensland. This has been a conscious founding of a relationship which it is hoped will be
long term. The Centre for Maritime Law (now MASLU) has over the last four years given lectures to the Federal Court Judges who are
interested in this work. My late colleague, Richard Cooper, saw the education of his peers, if they wished to undertake maritime
cases, as one of his greatest challenges. His untimely and deeply mourned death earlier this year removed from the Court and from
the Maritime Industry a potent force for the Australian profession and industry. However, he has left a legacy in the Court of a
recognition that there is the need for judicial training in an area of demanding and diverse study and expertise. Members of the
faculty have spoken to the Judges on the world shipping industry, carriage of goods by sea, Admiralty practice, marine insurance,
salvage and collisions. Together with those sessions from the University we have had talks from people such as Captain Ken Ross and
Captain Michael Bozier about the practical day to day aspects of ships, shipping and ship management. These seminars are supplemented
by in-house education seminars in which the Judges and Marshals exchange views and experience in an attempt to build and deepen a
Court corporate memory as to arrest practice and procedure. As often as it can the Court holds seminars with MLAANZ branches on maritime
topics.
This kind of exchange and relationship is important. It develops skill, scholarship and practical efficiency. It builds self-confidence
in the judiciary and confidence of the profession and industry in the judiciary. It also enables the Court to pass on knowledge and
experience to succeeding judicial “generations”.
The development of relationships is vital to this process of education. The Nautical Institute, the Company of Master Mariners, salvors,
pilots, marine underwriters, ship builders, arbitrators, carriers, charterers, cargo interests, stevedores, freight forwarders and
others in the industry including barristers and solicitors need to see themselves as part of a coherent maritime service industry
based on skill, education and scholarship. To call it a “service industry” is not intended to commercialise the professions
involved, including the legal profession and the court system. It is to recognise that they, including the legal profession and the
courts, in their own ways, serve the public.
What do I mean by everyone in the Maritime Industry recognising the need for knowledge, skill development and scholarship? Let me
give you an example. I recently found a little book prepared by the Institute of London Underwriters, and published by Witherby in
1946. It was 161 pages in length and part of Witherby’s “Valiant” series of books on insurance and shipping. The
series was first published immediately after the Second World War for the education of those returning from the War who were going
back into the insurance industry. The authors were experienced underwriters and lawyers of quality such as the future Mr Justice
McNair. The introduction to the first edition said the following:
A marine insurance official, however, is deemed to have a very wide general knowledge, as his activities bring him daily into touch
with matters that can be dealt with successfully only if he is familiar with and has clear perception of the fundamentals of the
various branches of commerce.
By the phrase “various branches of commerce” the Institute of London Underwriters included the law. By this the Institute
did not mean that the law was a commercial commodity. It was and is not. The Institute recognised that commercial men and women needed
to understand the law which is embedded in the interstices of commerce.
The little book, and the series in which it was found, displayed a recognition that the maritime industry in England has always known
and put into practice, at times almost intuitively – the need for the exponents of the various crafts and professions involved
to have a strong foundation of scholarship in their fields and in the wider context in which they worked.
What does this mean in practice? It means maritime lawyers (judges, arbitrators and practitioners) should be exposed to practical
training and insights from mariners, insurers, brokers, stevedores, freight forwarders and others. It means that insurers, carriers,
brokers and others need to be exposed (out of the expensive context of court cases) to lawyers and judges and arbitrators in order
to understand and be familiar with and confident with those who resolve disputes. This can only be done by a concerted effort at
interdisciplinary exchanges of views and an exposure to the crafts and professions of others. Days such as today are a fine example
of such exchange.
What are other countries doing? Singapore, Hong Kong and China are pouring significant amounts of money into the development of maritime
teaching at their universities. They are also pouring significant amounts money and organisational energy into the development of
integrated court and arbitral systems.
Are we doing as much as we can in this regard? I doubt it. Singapore and Hong Kong are fine legal centres. They are massive commercial
centres. However, Australia has one of the best legal systems in the world. It has a number of commercial centres of significant
importance. We must develop the self-confidence to organise the geographically disparate links within this country and develop the
interdisciplinary relationships to underpin maritime dispute resolution service.
What can the courts do? The courts can act as a focus around which the various levels of dispute resolution can be built. In this
day and age judicial resolution of disputes is but one, and in many jurisdictions (in terms of number of cases) a minor, participant.
However, a skilled and efficient judicial system forms an integral part of the framework buttressing dispute resolution. A court
system which is trusted both for its integrity and specialised skill and scholarship can assist the growth of an arbitration system
existing in tandem with and parallel to it. Judicial and arbitral resolution are distinct, but related. Whilst the growth in the
last few years of arbitration in general commercial matters in Australia and by Australians (the two not necessarily being the same)
has been enormous, there is still a long way to go in the development of maritime arbitration.
Let me explain the important changes made in the Federal Court to the conduct of Admiralty and maritime work in this context.
The framers of the Australian Constitution saw Admiralty and maritime jurisdiction and interstate and overseas trade and commerce as important heads of national authority.
Since the introduction of the Admiralty Act 1988 the Federal Court has assumed an important role in the resolution of maritime disputes in this country in much the same way as the
federal courts in the United States. The Australia-wide capacity for service of process and the integrated national structure of
the Court provide a framework for a cohesive national court. Nevertheless, State and Territory based Registries in the Court and
distance have tended against truly a national organisation at times.
Recently, the Court has introduced a national arrangement to create what is, in effect, an operating national Admiralty and Maritime
Court. The arrangement is such that in each Registry there are at least two Judges (four in Sydney and three in Melbourne) who will
undertake the Admiralty and maritime work of the Court at first instance and on appeal (as far as the latter is practicable in the
running of Full Court lists). These 13 Judges (out of the 43 Judges in the Court) are nominated for this work by the Chief Justice.
These Admiralty and Maritime Judges will be assisted in undertaking this work by a group of Registrars, skilled registry officers
and Admiralty Marshals. Through training by lectures and practical seminars, the Judges, Registrars, registry officers and Marshals
will develop their maritime skill base. In March 2006, we are having a three day seminar training our Registrars (a process already
begun) on the law of carriage of goods by sea, marine insurance, the shipping industry and mediation and arbitration practice.
There are already a number of Judges, Registrars and Marshals who have a considerable maritime or maritime law background. One Registrar
has a masters from Southampton and almost a decade’s experience as a loss adjuster and cargo surveyor in South Africa.
This process of training is intended to widen and deepen that skill base so that past professional practice or trial and error as
a Judge is not the only source of experience.
Each Registry will have a Registry Convening Judge who will run an Admiralty and maritime list in that Registry. There is a National
Convening Judge and a National Admiralty Deputy Registrar to co-ordinate the handling of the work and judicial, Registrar and Marshal
training. Each Registry has, of course, experienced Marshals.
The work of this national panel is not limited to in rem and in personam claims under the Admiralty Act 1988, but extends to all cases which raise issues under maritime legislation in this country, such as marine insurance, maritime security
and general Navigation Act matters. The list of these Acts is contained in the Notice to Practitioners which describes the new arrangements
which is attached to the paper that can be found on the Court’s website page dealing with Admiralty and maritime matters (www.fedcourt.gov.au
/how/admiralty.html).
For some years, there has been a national organisation of Admiralty Marshals in the Court to co-ordinate in rem proceedings. If a
vessel is to be arrested off the North West Shelf there is no reason why that arrest can not be initiated by the filing of a writ
in Tasmania, Melbourne, Sydney, Brisbane, South Australia or Perth. The Marshals of the Court will co-ordinate with one another to
deal with the arrest. The Marshals are experienced and they organise and run workshops for Federal Court and State and Territory
Supreme Court Marshals every three years or so.
What is sought to be done by the new arrangement is to bring this level of national co-ordination into in personam proceedings. That
is, into ordinary writs for personal relief in terms of damages. In the development of this structure to deal with in personam relief
the Court will place an emphasis not only on the development of skilled Judges but on the development of skilled Registrars who can
act as both mediators and as arbitrators. This will be especially relevant to the resolution of smaller claims which often raise
the same complexity of legal problems as arise in larger claims. Each Registry will encourage the maritime education of the Registrars
to enable them swiftly to identify issues at case management conferences and then to mediate if appropriate and, if consented to,
arbitrate upon claims. This will see the provision at minimal cost – modest court fees, without room fees and without arbitrator
or mediator fees – a court-annexed alternative dispute resolution service which can be used to resolve maritime disputes. Also,
the use of Registrar arbitration or other Court annexed arbitrations with an external arbitrator can eliminate an appeal on the facts
– salutory in smaller cases.
This court-annexed ADR structure is not to be seen as competing with or antagonistic to private arbitration and mediation. Rather,
it is to assist and foster that development. The Court is more than happy to use professionals – legal or not – as court
annexed mediators and arbitrators, if that is what the parties wish. There is ample power in Federal Court of Australia Act 1976 to accommodate that. This court-annexed structure gives a framework and a low cost base to the parties should they wish to use it.
There will never be one London in Australia. Australia will not be or have within it a commercial city state. But we have maritime
skills all over the country and a first class legal system. The challenge is how to harness those skills.
Just as it is important to be able to say that there is an operating national maritime court, it is important to say that there is
an organised Australian maritime arbitration structure – visible, vibrant and ready to deal with work.
There are a number of national commercial arbitration bodies, including the Australian branch of the Chartered Institute of Arbitrators,
the Institute of Arbitrators and Mediators and the Australian Centre for International and Commercial Arbitration. None has a readily
visible sub-group within its organisation for maritime arbitration. There is no Australian Maritime Arbitrators Association, so-called.
There should be. Yet, there are many people in Australia who would grace such an association, not a few are sitting in this room.
It is up to the Maritime Community to set up this structure. It is much more difficult for someone to put an Australian arbitration
clause in a charter-party or other maritime contract if the party cannot locate an organisation of Australian maritime arbitrators.
The work will not magically flow in and create the structures. The structures must be set up, and visibly, if the work is to come.
These national curial and arbitral structures are vital. Commercial clients will not pay good money to be told about the complexities
of the federal system. There must be identified national structures. Of course, those structures will operate within the States and
Territories: geography and physical and Constitutional reality require it.
But we must have coherent national structures in place; otherwise the complexity and confusion will simply drive commerce away to
simpler venues for dispute resolution.
Sandy Galbraith at Lloyds DCN has been attempting to develop an overarching organisation for the exchange of ideas. He calls it Maritime
Vision Australia. This kind of enthusiasm for an integrated relationship between all branches of the Maritime Industry is to be encouraged.
Organisations such as MASLU, MLAANZ and the Nautical Institute have a particular responsibility to see organisational and interdisciplinary
exchanges flourish. Today is a fine example. More is needed. Law and practical industry and commerce should be partners who know
each other’s lives and work.
It is vital that we deepen scholarship and promote the exchange of professional knowledge and experience. We need to develop centres
of critical mass of skill and knowledge and to develop regular inter-disciplinary exchanges based on the universities, the courts,
arbitrators, the professions and any relevant and interested industry organisations.
The cost of foreign dispute resolution is hidden, but huge.
If we are to develop a thriving and self-confident maritime dispute resolution service the legal profession, the courts and a maritime
arbitration organisation need to develop the trust and confidence of commercial clients both local and international in their scholarship,
skill and practical efficiency and in the scholarship, skill and practical efficiency of all those participating in the industry
who are connected with dispute resolution.
The Federal Court is attempting to play a role in the coherent and cohesive national organisation of curial and court annexed mediation
and arbitration maritime dispute resolution. This is not intended to be to the exclusion of any other court. We can only work within
our own framework. The Federal Court has taken a view as to an appropriate organisation for itself. It has sought to provide, to
the extent it can, a specialised commercial court to the Maritime Community within its wide maritime jurisdiction.
I cannot speak for other courts; but I have no doubt that a degree of co-operation is possible. For instance, trained skilled Registrars
acting as mediators or arbitrators are a valuable resource. One in one court should be available to help resolve actions commenced
in another court. Arbitration by serving judges is possible. It may be “ticklish” to do this in one’s own court,
but why not on a reference from another court in Australia or New Zealand ? See The ‘Bamburi’ [1982] 1 Lloyd’s
Rep 312, where Staughton J with the Lord Chancellor’s permission arbitrated various claims arising from the Iran/ Iraq war.
In conclusion, I think that three things are vital: (a) the development of maritime scholarship, (b) the development of flourishing
inter-disciplinary and inter-organisational exchanges of ideas; and (c) the development of specifically maritime national dispute
resolution structures – curial and arbitral. These are not just aspirations. They are matters which can be done, now. They
are, I think, the framework of success. If they are recognised as important, and if organisations and individuals keep them in mind,
much can be done.
Dispute resolution is a necessary fact of life. It is part of the civil and peaceful resolution of differences between persons all
over the world. It is a universal function. This country has a deeply experienced and skilled legal system and profession. The question
is: does the Australian Maritime Industry wish to have much of this work, which directly concerns it, done externally to Australia?
If not, there needs to be a coherent national approach taken.
I hope what I have said assists by, at least, provoking discussion.
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