November 2, 2015

Arbitration and Shipping Containers

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Each year about 10,000 shipping containers, each weighing anywhere from 5,000 to 55,000 lbs., fall overboard during ocean transport. In the process, goods are lost or damaged, and falling containers have the potential to seriously injure or question the safety of personnel transporting the containers.

The International Convention for Safe Containers (“Convention”), adopted by Canada in the Safe Containers Convention Act (“Act”), formalizes the international safety requirements in transporting shipping containers.

Like many international conventions, when a dispute arises, the Convention recommends applying arbitration as the first dispute resolution process. However, in the Convention arbitration only applies to Contracting Parties (see annex 5), which are countries that have passed legislation to enact the Convention. Therefore the Convention fails to offer a dispute resolution process in cases where a dispute arises from or between personnel transporting shipping containers or other non-Contracting Parties.

Unless non-Contracting Parties have insurance or have a contract for another dispute resolution process, under the Convention, non-Contracting Parties do not have a readily available dispute resolution process available. This provides an opportunity for private arbitration to settle disputes for non-Contracting Parties through an efficient, confidential, informal and neutral forum; reasons which make arbitration the dispute resolution mechanism of choice for most international disputes.

By Nav Pannu, Litigation & Arbitration Lawyer

Hassell Arbitration arbitrates supplier agreements.

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