Arbitration vs Settlement: Achieving the Best Commercial Outcome
23 July, 2026
63
The Interlegal team has recently achieved the successful resolution of a complex maritime dispute on behalf of our Client, the lawful bill of lading holder and cargo owner, in arbitration conducted under the London Maritime Arbitrators Association (LMAA) procedural rules.
The dispute arose after the Client’s cargo of galvanized steel was delivered to the port of Reni in Ukraine with a substantial delay and in a damaged condition. The delay resulted from the detention of the carrying vessel by the port authorities at the loading port following the discovery of numerous technical deficiencies that raised serious concerns regarding the vessel’s seaworthiness.
As a consequence, despite the delivery time agreed under the charterparty, the voyage took significantly longer than anticipated, resulting in cargo damage and considerable financial losses for the Client.
To protect its interests, the Client commenced vessel arrest proceedings at the discharge port while simultaneously initiating LMAA arbitration against the Shipowner. Interlegal subsequently joined the matter to represent the Client throughout the arbitration proceedings.
The arbitration lasted several months and was marked by an active procedural defence from the Shipowner, including the submission of counterclaims and an Application for Security for Costs.
Despite the complexity of the dispute and the highly contentious procedural stage, our team successfully shifted the parties from litigation to constructive commercial negotiations, ultimately achieving an amicable settlement on mutually acceptable terms.
An important element of the settlement structure was the involvement of our colleagues from Interlegal’s Turkish office, who acted as escrow agent and facilitated a secure and efficient settlement mechanism between the parties.
As a result, our Client recovered an agreed monetary compensation for the losses sustained, the vessel was released from arrest, and the arbitration proceedings were formally discontinued following the parties’ settlement.
This case once again demonstrates that successful dispute resolution is not limited to legal advocacy alone. In practice, the combination of effective procedural strategy, commercially focused negotiations and strong legal arguments often enables clients to achieve faster, more practical and commercially advantageous outcomes than a lengthy arbitral process.
The project was handled by the Interlegal team consisting of Senior Associate Taras Dragan, Managing Associate Diana Mykhailova and Junior Lawyer Sofiia Davara, under the supervision of Partner Karyna Gorovaya.
