Society of Maritime Arbitrators, Inc.

In 1988, the Society of Maritime Arbitrators celebrated its twenty-fifth birthday and published the first edition of Maritime Arbitration in New York. In the Foreword which the Society kindly asked me to write, I noted some decisions of the United States Supreme Court favoring and enhancing arbitration as a means of alternative dispute resolution - alternative, that is, to litigation, with its attendant trial and appellate delays, onerous discovery procedures, and greater legal costs. I concluded those remarks by observing: "Judges and arbitrators work together as laborers in the same vineyard of Justice. The procedural differences are less important than the substantive common purpose." In 2003, the Society celebrates forty years of service to the international maritime community, launches this revised edition, and has invited me back on stage to sing another Prologue.

In this fifteen-year interval, the Society has materially improved its effectiveness as a laborer in the vineyard of commercial justice by introducing a Shortened Arbitration Procedure, promulgating Mediation Rules, improving its Conciliation Procedure, and revising its Arbitration Rules. What have the courts been doing? Consideration of the period 1988 -2003 requires shifting the emphasis from decisions of the Supreme Court to those of the United States Court of Appeals for the Second Circuit, the most active intermediate appellate court in the federal system in cases where judges come into contact - sometimes into collision - with commercial arbitrators. To echo the prior theme, it may be said that the more recent Second Circuit cases address two questions: Who may enter the vineyard of commercial arbitration? And how fruitful are the grapes - the award - that the prevailing party harvests?

In the interim since 1988, the Second Circuit has stressed that "notwithstanding the strong federal policy favoring arbitration as an alternative means of dispute resolution, courts must treat agreements like any other contract,"⁽¹⁾ and, applying that principle, reversed a district court for ordering over a party's objection to a consolidated arbitration of a dispute involving two closely linked but separate helicopter manufacturing contracts: "The district court cannot consolidate arbitration agreements arising from separate agreements to arbitrate, absent the parties' agreement to allow such consolidation."⁽²⁾ As for judicial review of arbitration awards, in the Halligan case the Second Circuit sent a frisson of alarm through the arbitration community by refusing to confirm an employment discrimination arbitration award which "did not contain any explanation or rationale for the result" and left the court of appeals "with the firm belief that the arbitrators here manifestly disregarded the law or the evidence or both."⁽³⁾ However, concern that the Second Circuit was expanding that elusive and uncertain concept "manifest disregard of law" has been assuaged by the court's more recent opinion restricting Halligan's application to discrimination cases, stressing that in Halligan "there was no written [arbitrators] opinion, and, thus, no findings of fact," and reiterating that since Halligan "we have continued to apply the same manifest disregard standard" pre-dating that opinion, namely, "that our review under the doctrine of manifest disregard is severely limited."⁽⁴⁾

With these judicial winds blowing from several points around the compass, the Society steers a steady course by providing in its Arbitration Rules at Section 2 for a consolidated arbitration in appropriate cases, which would bind all parties whose contracts incorporate the Rules, and by continuing its tradition of publishing awards which give detailed reasons for the result reached. That salutary practice helps avoid the shoals of judicial review while creating a vital body of maritime commercial precedent.

The hope I would express in this Foreword is that the Society will distribute this excellent handbook far and near, so that all maritime commercial interests may be aware of the necessity of expressing their dispute resolution preferences in unmistakably clear contractual language.

Given these judicial expressions, the Society is to be congratulated for its tradition of publishing awards which give detailed reasons for the results. "[A]rbitrators have no obligation to do so," as the Second Circuit said in Halligan,⁽⁵⁾ but the absence of a reasoned award hampered judicial review in that case and led to an arguably unfortunate result. More importantly, a dispute resolution procedure serves the public best if the parties know why they won or lost; and the compilation of the Society's awards has created a vital body of practical commercial law.

So the Society of Maritime Arbitrators should be saluted, on its fortieth birthday, for having not just continued but broadened its important service to the international maritime community. If judges sometimes seem to get in the way of progress, perhaps the continuing regard they have for the arbitral process may incline the readers of this Foreword to forgive them.

CHARLES S. HAIGHT, JR.

United States Senior District Judge

For the Southern District of New York

1. U.S.Titan, Inc. v. Guangzhou Zhen Hua Shipping Co., 241 F.3d 135, 146 (2d Cir. 2001).

2. The Government of the United Kingdom v. The Boeing Company, 988 F.2d 68, 74 (2d Cir. 1993).

3. Halligan v. Piper Jaffray, Inc.,148 F.3d 197, 200 (2d Cir. 1998).

4. The GMS Group, LLC v. Benderson, 326 F.3d 75, 79 (2d Cir. 2003).

5. 148 F.3d at 204.