1.1 Drafting Maritime Arbitration Clauses (LMAA and Beyond): How to Write Them Correctly in Shipping Contracts

In maritime trade, a dispute resolution clause is not “boilerplate.” It is a risk allocation tool that can decide—often before the merits are even discussed—where the fight happens, how fast it moves, how much it costs, and whether the final decision can be enforced against assets. Charterparties, bills of lading, shipbuilding and repair contracts, terminal agreements, bunker supply terms, and freight forwarding chains are routinely cross-border. That makes arbitration attractive—but only when the clause is drafted with discipline.

Shipping disputes are also unusually prone to multi-contract chains (charterparty → sub-charter → bill of lading → cargo sale contracts → insurers and recovery actions). If the arbitration clause is unclear or inconsistent across documents, you get the worst outcome: parallel proceedings, jurisdiction challenges, wasted costs, and enforceability problems.

This article provides a practical, legally grounded guide to drafting maritime arbitration clauses—especially London maritime arbitration (LMAA)—while also addressing BIMCO standard drafting (Law and Arbitration Clause 2020), and key Turkey-facing enforceability points under the New York Convention and Turkish private international law.

1) Start with first principles: “seat,” “rules,” and “law” are different concepts

A good clause answers three separate questions:

1. Seat of arbitration (lex arbitri): Which country’s arbitration statute governs the arbitration procedure and court supervision?

2. Arbitration rules / procedure: Is it ad hoc (e.g., LMAA Terms) or institutional (e.g., LCIA, SIAC, HKIAC), and which procedural rules apply?

3. Governing law of the contract: Which substantive law governs the contract itself (e.g., English law)?

Maritime clauses fail when they mix these concepts or leave one ambiguous. In practice, the seat is the “anchor” that determines: interim court support, challenges to jurisdiction/awards, and many procedural defaults.

2) What “LMAA arbitration” actually means (and why drafting must be precise)

LMAA is not a court or a typical arbitral institution. It is a professional association, and “LMAA arbitration” is generally understood as ad hoc arbitration conducted under the LMAA Terms (procedural rules), typically seated in England and governed procedurally by the UK Arbitration Act 1996.

The LMAA’s recommended arbitration clause is explicit on three points that should appear in a properly drafted clause:

• arbitration in London under the Arbitration Act 1996,

• seat of arbitration in England,

• procedure under LMAA Terms current when proceedings commence.

It also provides a default tribunal structure (three arbitrators) and a default appointment mechanism including a 14-day notice-and-appointment timetable, plus the possibility for a sole arbitrator if the other side does not respond.

Why this matters

If you write “LMAA arbitration in London” but fail to specify the seat, appointment method, or procedural rules, you create room for procedural guerrilla tactics—especially early on, when one party wants to slow down security, arrest/anti-suit steps, or document production.

3) Use proven standard drafting where possible: BIMCO Law and Arbitration Clause 2020 (London)

BIMCO updated its standard approach through the Law and Arbitration Clause 2020, available in multiple venue versions. BIMCO notes that this clause replaced the prior Dispute Resolution Clause 2017 and is available for London, New York, Singapore, and Hong Kong.

The London version, as commonly circulated, does several things right in one place:

• chooses English law as governing law,

• mandates exclusive arbitration in London under the Arbitration Act 1996,

• fixes the seat as London even if hearings occur elsewhere,

• references LMAA Terms, and

• builds in pathways for Small Claims and Intermediate Claims procedures with commonly used monetary thresholds.

It also addresses a frequent operational problem: service of arbitration communications. The clause includes an email-based service framework (with designated email addresses) to reduce “we didn’t receive notice” disputes.

Practical takeaway

If your counterparty accepts BIMCO clause wording, your clause is far less likely to be attacked as “pathological” (uncertain/contradictory) later.

4) The “anatomy” of a strong maritime arbitration clause (LMAA-focused checklist)

A clause does not need to be long, but it must be complete. For maritime contracts, the safest structure is:

A) Scope of disputes

Use broad scope language such as: “any dispute arising out of or in connection with this contract, including its validity, existence, or termination.” This prevents arguments that tort claims, misrepresentation, or side letters fall outside.

B) Governing law of the contract

If you want English law (common in international shipping), say so expressly. BIMCO’s model does exactly that.

C) Seat and venue

• Seat: England (or London).

• Hearing venue: can be London or elsewhere, but seat should remain fixed. LMAA’s clause emphasizes the seat is England even where a hearing is outside England.

D) Procedural rules

For LMAA-style arbitration, specify “LMAA Terms current at commencement.”
This avoids confusion with institutional rules and ensures an identifiable, current procedural framework.

E) Number of arbitrators and appointment method

If you want a three-person tribunal, say so; if you want a sole arbitrator for speed/cost, say so—but also define appointment steps. LMAA’s recommended clause sets the default to three arbitrators and outlines a practical appointment path.

F) Expedited tracks (small/intermediate claims)

LMAA publishes Small Claims and Intermediate Claims procedures, and the recommended clause uses widely cited thresholds (e.g., USD 100,000 for small claims; USD 400,000 for intermediate claims) while allowing parties to agree otherwise.
If your business has frequent demurrage/freight disputes in these bands, this is not cosmetic—this is cost control.

G) Notices and service

If you do not set out a practical notice method, the first procedural fight is often “was arbitration validly commenced?” BIMCO’s clause includes email service mechanics and a process for updating designated addresses.

H) Language

Don’t assume. A simple “The language shall be English” prevents translation fights and procedural delay.

I) Confidentiality (optional but common)

If confidentiality matters (fixtures, rates, trade routes), add a confidentiality undertaking—bearing in mind that confidentiality may also arise by operation of applicable law/rules, but clarity helps.

5) A practical LMAA-style template clause (drafting model)

Below is a drafting template you can adapt (written in original wording, but aligned with the legal architecture reflected in LMAA/BIMCO models):

Model Clause (London / LMAA):
“Any dispute arising out of or in connection with this Contract (including any question regarding its existence, validity or termination) shall be referred to arbitration in London. The seat of the arbitration shall be England. This Contract shall be governed by English law. The arbitration shall be conducted as an ad hoc arbitration in accordance with the London Maritime Arbitrators Association (LMAA) Terms in force at the date of commencement of the arbitration. The tribunal shall consist of three arbitrators (or a sole arbitrator if the parties agree in writing). Notices, including commencement and appointments, may be served by email to the addresses stated in this Contract (as updated by written notice). The language of the arbitration shall be English.”

Why it works: it cleanly separates governing law, seat, rules, tribunal composition, and service mechanics—the five most litigated clause elements in shipping.

If you need a clause closer to “industry default,” compare the architecture to the LMAA recommended clause (seat in England; LMAA Terms; tribunal/appointment; small claims tracks).

6) Charterparty clauses vs Bill of Lading holders: the incorporation trap

One of the highest-risk areas in maritime arbitration drafting is incorporation by reference—especially when a bill of lading is issued under a charterparty and later transferred to third-party holders.

The commercial reality: owners/charterers often intend the charterparty’s arbitration clause to bind cargo interests or B/L holders. The legal reality: enforceability often depends on clear incorporation wording and how courts interpret the B/L’s references.

Academic commentary in Turkish maritime arbitration has long emphasized that enforceability against B/L holders is possible, but dependent on meeting specified requirements (clear incorporation, proper reference, and compatibility with the bill’s terms).
Recent practice commentary also reports Turkish maritime court acceptance of charterparty arbitration clauses against B/L holders in circumstances where the B/L clearly tied itself to the charterparty terms.

Drafting tips to reduce incorporation fights

• Put incorporation wording on the B/L face: “All terms, conditions and arbitration clause of the charterparty dated [•] are incorporated.”

• Identify the charterparty by date and parties (avoid “as per charterparty” vagueness).

• Avoid conflicting dispute resolution language elsewhere on the B/L (e.g., a printed court jurisdiction clause).

If you want arbitration to bind downstream holders, ambiguity is your enemy.

7) “Writing” and electronic contracting: why recaps and email fixtures matter (Turkey angle)

Many shipping contracts are concluded through fixture recaps, broker emails, and electronic exchanges. Under Turkish international arbitration law, the arbitration agreement must be in writing, but “writing” is interpreted broadly and includes electronic media and exchange of messages.
Turkish law also recognizes that reference to a document containing an arbitration clause can constitute an arbitration agreement if the reference makes that clause part of the contract.

Practical takeaway

If your arbitration clause sits in a standard form (e.g., GENCON/NYPE/BIMCO rider) but your recap does not clearly incorporate it, you invite a jurisdiction challenge later. Treat incorporation language as a must-have in the recap.

8) Enforcement strategy: Draft for the award you will need to enforce (especially in Turkey)

Arbitration clause drafting is also enforcement drafting.

A) Turkey and the New York Convention

Turkey is a party to the New York Convention and has made the reciprocity and commercial reservations.
Meaning: Convention enforcement may depend on whether the award comes from another contracting state (reciprocity) and whether the dispute is “commercial” under Turkish law (commercial reservation).

B) Turkish framework for enforcement of foreign awards

Foreign arbitral awards are generally enforced in Turkey through a court process under Turkish private international law, alongside the Convention framework where applicable.
Practical guidance sources also summarize that applications are filed at the court of first instance based on domicile/residence of the debtor, or (if none) in Ankara, Istanbul, or Izmir.

Drafting implications

If you want smooth enforcement, ensure the clause:

• is clearly in writing and incorporated (especially for B/L chains),

• identifies the seat (avoid “floating” arbitration),

• avoids contradictory jurisdiction statements, and

• uses a known procedural framework (LMAA Terms / BIMCO clause) so “due process” attacks are harder.

9) Common drafting mistakes (“pathological clauses”) seen in shipping disputes

Mistake 1: “London courts or LMAA arbitration”

This invites a preliminary war: is it arbitration or litigation? A clause must choose one forum as the primary dispute mechanism, with any court involvement limited to supportive measures where allowed.

Mistake 2: Naming LMAA as if it were an institution

If you write “arbitration administered by LMAA,” you risk confusion because LMAA arbitration is typically ad hoc under LMAA Terms. The fix is simple: state that arbitration is conducted in accordance with LMAA Terms.

Mistake 3: No seat (or mixing seat and venue)

“Arbitration in London” is better than nothing, but don’t rely on implication—state the seat explicitly (England/London). LMAA’s clause does this clearly.

Mistake 4: No appointment mechanism

Appointment fights are a classic delay tactic. LMAA’s clause includes a practical 14-day appointment sequence and a sole-arbitrator fallback if the other side does not act.

Mistake 5: Inconsistent clauses across documents

Charterparty says LMAA; B/L printed terms say “High Court of Justice”; booking note says “Singapore.” The result is fragmentation. Use a single standard clause family (e.g., BIMCO Law and Arbitration Clause 2020) across the chain whenever possible.

10) Where NYPE 2015 drafting helps: built-in multi-venue options

Many parties rely on standard forms like NYPE 2015, which contains alternative arbitration options (e.g., London under English law with LMAA Terms; New York with SMA; Singapore with SCMA).
The practical lesson is not “always use NYPE,” but: use clauses that already solved the core drafting problems—seat, rules, tribunal composition, appointment, and (often) expedited tracks.

Conclusion: The best maritime arbitration clause is short—but complete

A well-drafted maritime arbitration clause is not about fancy wording. It is about eliminating uncertainty:

• Choose governing law (often English law in international shipping).

• Fix the seat (England/London for LMAA-style clauses).

• Specify the procedural framework (LMAA Terms current at commencement).

• Define tribunal size and appointment steps (avoid deadlock).

• Build a reliable notice method (email service helps).

• Draft with enforceability in mind, especially under the New York Convention and Turkish enforcement practice.