LMAA arbitration as final point for negotiations

A shipowner, whose vessel was chartered for sea carriage from Turkey to Izmail, applied to Interlegal. During the voyage, vessel got stuck in entrance to the Sulina Channel, waiting for inspection in accordance with Grain Initiative; such delay resulted in demurrage amounting to 220,000 USD. 

Shipowner proposed amicable dispute settlement, in the form of payment deferral and cargo discharge without delay. Although the Shipowner proposed profitable terms for dispute settlement, the Charterer refused to pay demurrage. 

Interlegal lawyers got involved in negotiations between the Parties. On the Shipowner’s side, our lawyers sent justified Letters of Claim to the Charterer and held a series of negotiations. But the Charterer has done all the best to delay dispute settlement, having proposed a very low reimbursement amount. Certainly, the conflict increased and the Shipowner only had to apply to arbitration court. 

As soon as Interlegal lawyers initiated case consideration by LMAA, the Charterer finally reached a constructive dialogue and made a commercially reasonable proposal. Following such negotiations, Interlegal drafted amicable agreement duly approved by the parties. Now the Charterer goes on to fulfill its monetary obligations and arbitration proceedings have been suspended until the Shipowner receives all the costs under amicable agreement. 

Both parties could settle the dispute effectively, since the Charterer understood all legal effects of arbitration proceedings. Even prompt and fair proceedings jointly with mandatory enforcement of arbitration award anyway could serve as final point in such dispute. No doubt, initiation of arbitration proceedings has always essential impact even on amicable dispute settlement. 

Interlegal associate attorney Mykola Kozachenko, lawyer Ganna Domuschi, junior lawyer Diana Mykhailova managed by partner Alexey Remeslo, led the case.