Now that the Society of Maritime Arbitrators has celebrated its 50th Anniversary, it is appropriate to reflect on the history of the institution, its contributions to the field of maritime arbitration, and what the future holds for this burgeoning area of alternative dispute resolution. In 1963, the Society of Maritime Arbitrators was formed to fill the growing need for arbitration rules and ethical guidelines for practitioners in the field. Twenty five years after its inception, the Society published the first edition of Maritime Arbitration in New York. Over the years, the Society continued to publish revised editions of the brochure in an effort to adapt to the ever-changing field. In doing so, the Society has served as the model and set the standard for maritime arbitration proceedings in New York for the past half-century.
In recent years there have been many challenges as to the enforceability of arbitration agreements by parties that would prefer to litigate their claims. Several cases have reached the Supreme Court, and the Court has continued to support the enforceability of arbitration agreements. In AT&T v. Concepcion, customers attempted to bring a class action alleging a violation of California's judicial rule regarding the unconscionability of class arbitration waivers in consumer contracts. The Supreme Court began its analysis by citing the provision in the Federal Arbitration Act (FAA) that states: "A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction…shall be valid, irrevocable, and enforceable…". The Court then noted that it had previously "described this provision as reflecting both a liberal federal policy favoring arbitration" and that arbitration agreements should be treated akin to contracts and enforced according to their terms.1 The Court therefore decided that the California law was preempted by the FAA and thus ruled the arbitration agreement must be enforced. In addition to trumping the state law challenge from California in Concepcion, the Supreme Court has a long line of cases upholding the enforceability of arbitration agreements in the face of a multitude of challenges. For example, the Supreme Court has ruled that challenges to the validity of a contract containing an arbitration clause "must go to the arbitrator" and cannot be decided in State or Federal court.2 Because of the limited scope of appeal, and thus the limited opportunity to rectify injustice, it is more necessary than ever for the terms, conditions, and process provided by arbitration agreements to be fair to all parties.
The Society has created guidelines of fairness for the past half century and continues to ensure just and sensible Maritime Arbitration procedures in New York. In order to ensure the continued viability of its guidelines, the Society has established a robust code of ethics which includes a Committee on Professional Conduct responsible for investigating all complaints concerning the conduct of its members. Additionally, the rigorous process required to achieve a roster position as a Society-approved arbitrator provides reassurance that arbitration proceedings will be conducted with the highest standards of professionalism. As the Society has demonstrated since its inception, when utilized properly, arbitration can provide a viable, affordable, and, most importantly, equitable resolution to commercial disputes. The Society's Arbitration Rules foster a fair and efficient alternative to traditional litigation. For example, the rules provide for a Shortened Arbitration Procedure in disputes involving smaller monetary amounts, as well as for consolidated arbitration in certain cases. Additionally, by maintaining a standard practice of publishing the facts and reasoning behind its awards, the Society has built a database of over 4,200 awards to be relied upon in future arbitration.
Arbitration continues to gain momentum and has firmly established itself as an excellent alternative to litigation, but the Society also recognizes the importance of the various other forms of alternative dispute resolution. The implementation of Rules for Conciliation, Rules for Mediation, as well as the constant revision of its existing Arbitration Rules and Shortened Procedure as necessary, reaffirms the Society's singular position as a beacon in the field of alternative dispute resolution. In addition, the Society has made available its U.S. Open Form Salvage Agreement (MARSALV) for use in select salvage disputes. Because of the Court's limited role in overseeing agreements containing arbitration clauses, it is imperative that those agreements to arbitrate are governed by legal principles and ethical standards. As a lighthouse illuminates the path of navigation, the Society has facilitated the use of arbitration, provided guidance where there once was none, and set the highest ethical standards in the field of maritime law. I congratulate the Society on reaching the milestone of its fiftieth birthday.
LORETTA A. PRESKA
Chief Judge, U.S. District Court
For the Southern District of New York