Rules For Shortened Arbitration Procedure

DOCUMENT NO. 2

(This Procedure applies to contracts entered into on or after May 1, 2007 through September 14, 2010)

Click here for rules prior to May 1, 2007

Supplement to the Arbitration Clause

"Notwithstanding anything contained herein to the contrary, should the sum claimed by each party not exceed U.S. $___________ (insert amount, exclusive of interest on the sum claimed, costs of the arbitration, and legal expenses), the dispute is to be governed by the ''Shortened Arbitration Procedure'' of the Society of Maritime Arbitrators, Inc. (SMA) of New York, as defined in the Society's current Rules for such procedure, copy of which is attached hereto."

SMA RULES FOR SHORTENED ARBITRATION PROCEDURE

1. Upon giving notice of a claim under these rules, the claimant shall nominate an arbitrator from the SMA roster to act as the sole arbitrator and simultaneously request the respondent's agreement. Failing a response by the respondent within 10 days of this initial nomination, the arbitrator so nominated shall become the sole arbitrator. The arbitrator shall promptly submit his/her disclosure statement to the parties, as required under Section 9 of the standard SMA Rules.

2. If the respondent does not agree to the nominated arbitrator as sole arbitrator, the respondent shall propose three other persons from the SMA roster to serve as sole arbitrator. Failing agreement on a sole arbitrator, either party may request that the President of the SMA appoint the sole arbitrator. This appointment shall be binding upon the parties.

3. Within 15 days of appointment, the arbitrator shall establish a written schedule for the prompt submission of the claimant's initial statement of claim with all supporting documents. The respondent shall submit its response and any counterclaim with all supporting documents within 20 days of receipt of claimant's submissions. In the event of a counterclaim, the first moving party shall respond within 20 days or sooner. At the arbitrator's discretion, the schedule may be varied by a few days. Short replies by both parties to each other's defenses may be exchanged consecutively or simultaneously, at the arbitrator's discretion.

4. The arbitration shall proceed on documents alone.

5. There shall be no discovery except as deemed necessary by the arbitrator.

6. The total items of dispute submitted by both parties under this procedure shall not number more than four, the combined total of which shall not exceed the figure agreed in the contract. At the arbitrator's sole discretion, a reasonable amendment to this limitation may be permitted.

7. The parties may be represented by attorneys or commercial advocates. An allowance towards legal expenses or time and expenses incurred by the parties in the prosecution or defense of the case may be awarded at the discretion of the arbitrator, but any such award shall not exceed $3,500.00.

8. The award shall be issued within 30 days of receipt of the final replies or the arbitrator's declaration that the proceeding is closed.

9. The fee and expenses of the arbitrator shall not exceed: a) $2,000.00 if there is no counterclaim; b) $3000.00 if there is a counterclaim.

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