Arbitration & Mediation

The IBIA Rapid Resolution Schemes is available to both Members and Non-members.

There are two separate schemes:

1) Determinative Dispute Resolution - Arbitration, where a decision is made by the arbitrator on behalf of the parties; a conclusive result is an inevitable consequence of the process.

2) Consensual Dispute Resolution - Mediation, where the mediator guides and facilitates the parties towards a settlement agreement; a conclusive result is not inevitable but 70-80% of all commercial mediations lead to a binding settlement.

Both schemes are available as a means of resolving relatively straightforward bunker disputes quickly where no more than US$100,000 is in issue but this upper limit may be waived by agreement. All proceedings are private and confidential other than is necessary for enforcing an award or agreement

I) Rapid Resolution Arbitration Rules

1. Outline

The arbitration is entirely paper based with all parties limited to an initial set of submissions of no more than 12 sides of A4 paper in length, a maximum of 12 individual exhibits and a supplementary submission of no more than a further 3 A4 pages. If the respondents submissions include a counterclaim, the claimant may make a third, final submission of no more than 3 A4 pages in length.

2. The Award

The sole arbitrator will issue a final, binding, non-appealable award within 4 weeks of receiving the parties' final submissions.

3. Appointment of Arbitrator

IBIA maintains a panel of up to 20 suitably qualified arbitrators who will be proposed for appointment by the Chief Executive on a rotational basis and selected by the parties on a preference indication basis, details of which are given in Appendix 3 below.

4. Fees

The fee for each party is US$600; of the total fee of $1,200, $240 (20%) is retained by IBIA to cover administration and $960 (80%) is paid to the arbitrator. Fees are paid by the initiating party (Claimant) on making the initial application to IBIA and by the responding party (Respondent) on acknowledging to IBIA that it has received notice of the application. If there are more than 2 parties to a dispute each additional party pays $600 on the same basis as the first 2 parties and the process is adjusted to accommodate the additional participants. All fees and any other costs and expenses may be subject to VAT and/or other taxes or levies which will be charged as appropriate.

5. Representation and Costs

The use of lawyers to represent parties is acceptable but no costs will be awarded other than in respect of the arbitration fees and of any analyses of samples of fuel, all of which costs will be within the discretion of the arbitrator.

6. Submissions

i) The Claimant will deliver to the arbitrator and the Respondent its submissions and exhibits within two weeks of receiving notice of the arbitrators appointment. The Respondent will deliver its submissions and exhibits to the arbitrator and the Claimant within two weeks of receiving the Claimants submissions. The Respondents submissions may include a counterclaim.

ii) The Claimant may deliver to the arbitrator and the Respondent a supplementary submission within two weeks of receiving the Respondents submission. If the Claimant has delivered a supplementary submission, the Respondent may also deliver a supplementary submission to the arbitrator and the Claimant within two weeks of receiving the Claimants supplementary submission. Thereafter, if the Respondent has previously made a counterclaim, the Claimant may make a further, final submission.

7. Procedure

The arbitrator will adopt a pro-active role to ensure that momentum is maintained and may draw adverse inference from a party's delay in proceeding. The process is intended to be flexible and the arbitrator may modify the rules and process at his or her discretion where he or she considers it to be appropriate and just. The arbitrator may also declare that the matter in dispute cannot be justly resolved through the Rapid Resolution process at which point the arbitration shall, unless the parties and the arbitrator agree otherwise, terminate and the parties shall thereafter have recourse to such other methods of dispute resolution as may be available to them under the terms of the contract the subject of the dispute.

8. Exclusion of Liability

Neither the Arbitrator nor IBIA shall be liable to the parties for any act or omission in connection with the services provided or in relation to the Mediation, unless the act or omission is shown to have been in bad faith.

II) Rapid Resolution Mediation Rules

1. Introduction

Half a day (4 hours) plus 2 hours preparation time is allowed for the mediation. Each party may present an open position paper of no more than 4 sides of A4 in length, a further confidential submission to the mediator if desired of no more than 2 sides of A4 in length and a maximum of 12 individual exhibits.

2. Procedure

The mediator will normally attempt to resolve the dispute in a series of open and closed sessions in a single half day but may use any other means to facilitate the mediation including telephone, fax, email and video-conferencing both before and after any face to face sessions. Subject to the co-operation of the parties, the mediator will endeavour to complete the mediation process within 3 weeks of appointment. Any party may withdraw from the mediation at any time without giving a reason. The mediator likewise may at any time withdraw or suspend the process without giving a reason.

3. Appointment of Mediator

IBIA maintains a panel of up to 20 suitably qualified mediators who will be proposed for appointment by the Chief Executive on a rotational basis and selected by the parties on a preference indication basis, details of which are given in Appendix 3 below.

4. Fees

The fee for each party is US$600; of the total fee of $1,200, $240 (20%) is retained by IBIA to cover administration and $960 (80%) is paid to the mediator. Fees are paid by the initiating party on making the initial application to IBIA and by the responding party on acknowledging to IBIA that it has received notice of the application and agrees to participate. If there are more than 2 parties to a dispute each additional party pays $600 on the same basis as the first 2 parties and the process is adjusted to accommodate the additional participants. All fees and any other costs and expenses may be subject to VAT and/or other taxes or levies which will be charged as appropriate.

5. Representation and Costs

The use of lawyers to represent parties is acceptable but there is no provision in mediation for costs to be awarded although costs may form part of a settlement agreement.

6. Process

The mediator will adopt a highly pro-active role from the moment of appointment to ensure that momentum is maintained. The process is intended to be flexible and the mediator may modify the rules and process at his or her discretion where he or she considers it to be appropriate and just. Confidentiality is an essential element of the mediation process. This means that all information disclosed or revealed in the mediation is confidential and, unless available elsewhere, cannot be used for any other purpose. The Mediator will not disclose to a party any information given to him by another party in confidence without the express consent of that other party.

7. Outcome

In the event that the mediation does not result in a settlement, the parties may at the conclusion of the mediation process, resort to whatever other means of dispute resolution are available to them as if no mediation had taken place, including the IBIA Rapid Resolution Arbitration Scheme.

8. Exclusion of Liability

Neither the Mediator nor IBIA shall be liable to the parties for any act or omission in connection with the services provided or in relation to the Mediation, unless the act or omission is shown to have been in bad faith.

Model Clauses for Incorporation into Contracts

Some suitable model clauses for incorporating the Rapid Resolution Schemes into bunker supply and other contracts including charterparties are set out below.

Reference to Mediation

Reference to Arbitration

Reference to Mediation and Arbitration

Any dispute, claim or other matter of contention arising from [the supply or use of marine bunker fuels pursuant to] this [contract/charterparty], the subject matter of which does not exceed US$100,000, shall be subject to the IBIA Rapid Resolution Scheme. The parties shall as a first step attempt mediation and if the matter is not thereby resolved satisfactorily within 28 days of the appointment of a mediator the matter shall be referred to arbitration. The dispute resolution process is initiated by a request from either party to the Chief Executive of IBIA in accordance with the rules of the Schemes.

Short Forms of Agreement to Refer Existing Disputes

The Schemes are always available to parties on an ad hoc basis. Some simple illustrative forms of agreement to facilitate the process are set out below.

Reference to Mediation

A dispute, claim or other matter of contention having arisen between the parties hereto in respect of [brief particulars], the value of which does not exceed US$100,000, it is agreed that resolution shall be attempted through the IBIA Rapid Resolution Mediation Scheme. The process will be initiated by either party requesting theChief Executive of IBIA to intervene in accordance with the rules of the Scheme.

Reference to Arbitration

Reference to Mediation and Arbitration

A dispute, claim or other matter of contention having arisen between the parties hereto in respect of [brief particulars], the value of which does not exceed US$100,000, it is agreed that resolution shall be sought through the IBIA Rapid Resolution Schemes. The parties shall as a first step attempt mediation and if the matter is not thereby resolved satisfactorily within 28 days of the appointment of a mediator the matter shall be referred to arbitration. The dispute resolution process will be initiated by either party requesting the Chief Executive of IBIA to intervene in accordance with the rules of the Schemes.

Selection and Appointment of Arbitrators and Mediators

A) Arbitrator Selection and Appointment Process

The Chief Executive, on receipt of a proper request from a party to initiate the IBIA Rapid Resolution Arbitration Process, will send to the participating parties the names and brief biographical details of three eligible and available members of the IBIA Rapid Resolution Arbitrators Panel (the Panel).
Names will be selected in strict rotation without the exercise of any discretion, by the Chief Executive from the Panel.
Each party will mark a preference against each name on the Nomination Form: "Y" to indicate that the candidate is that partys preferred appointee; "A" to indicate that the candidate would be an acceptable appointee and "N" to indicate that a candidate is unacceptable.

On receipt of the parties responses the Cheif Executive will award scores to each of the three candidates on the basis of three points for "Y", two points for "A" and zero for "N".
The highest scoring candidate, subject to a minimum score of four, will be appointed. In a three party dispute the minimum score for appointment is six with no zeros.
In the event of two candidates tying, the appointment will go to the arbitrator who least recently held an appointment under this scheme.
In the event that none of the three candidates attains the threshold score of four points, the Chief Executive will propose three further candidates on the same basis as the first three. In the event that none of these attains the threshold score, the Chief Executive will appoint the next eligible and available member of the Panel.
Before including a Panel members name on a list of potential appointees, the Chief Executive will (in confidence) provide the Panel member with the names of the parties and brief details of the dispute, inviting the Panel member to confirm within 48 hours that he or she is eligible and available. If a Panel member does not confirm within 48 hours that he or she is eligible and available, the contrary shall be assumed and the Chief Executive shall approach the next name on the Panel list. The principal criterion in assessing eligibility is the absence of any likely conflict of interest.

B) Mediator Selection and Appointment Process

N.B. This process is the same, mutatis mutandis, as for arbitrators above

The Chief Executive, on receipt of a proper request from a party to initiate the IBIA Rapid Resolution Mediation Process, will send to the participating parties the names and brief biographical details of three eligible and available members of the IBIA Rapid Resolution Mediators Panel (the Panel).
Names will be selected in strict rotation without the exercise of any discretion, by the Chief Executive from the Panel.
Each party will mark a preference against each name on the Nomination Form: "Y" to indicate that the candidate is that partys preferred appointee; "A" to indicate that the candidate would be an acceptable appointee and "N" to indicate that a candidate is unacceptable.

On receipt of the parties responses the Chief Executive will award scores to each of the three candidates on the basis of three points for "Y", two points for "A" and zero for "N".
The highest scoring candidate, subject to a minimum score of four, will be appointed. In a three party dispute the minimum score for appointment is six with no zeros.
In the event of two candidates tying, the appointment will go to the mediator who least recently held an appointment under this scheme.
In the event that none of the three candidates attains the threshold score of four points, the Chief Executive will propose three further candidates on the same basis as the first three. In the event that none of these attains the threshold score, the Chief Executive will appoint the next eligible and available member of the Panel.

Before including a Panel member/s name on a list of potential appointees, the Chief Executive will (in confidence) provide the Panel member with the names of the parties and brief details of the dispute, inviting the Panel member to confirm within 48 hours that he or she is eligible and available. If a Panel member does not confirm within 48 hours that he or she is eligible and available, the contrary shall be assumed and the Chief Executive shall approach the next name on the Panel list. The principal criterion in assessing eligibility is the absence of any likely conflict of interest.