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Clause 1-4B. Arbitration Clause

Cl. 1-4B was new in the 2019 Version. 

There are two main reasons to insert an arbitration clause as an alternative to ordinary court proceedings. The first reason is that several insurers today refer to arbitration as their main dispute resolution solution, and it is therefore convenient to have a standard clause in the Plan that the parties can include. 

The second reason concerns uncertainty of the regulation on court jurisdiction and recognition and enforcement of judgments after Brexit. The EU legislation on court jurisdiction and recognition and enforcement of judgments in civil and commercial law is based on the revised Brussel I Directive of 2012, which is applicable also for Norway and Denmark through the Lugano Convention of 2007. The UK is however not a signatory party to the Lugano Convention, and this creates uncertainty about recognition and enforcement of EU/EFTA court decisions in the UK and UK court decisions in the EU/EFTA states. This is primarily a problem when the insurance is effected with non-Nordic claims leaders where jurisdiction in the UK often is a natural choice. The committee is therefore of the view that it is more convenient to refer disputes with non-Nordic claims leaders to arbitration, where recognition and enforcement is based on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), cf. Cl. 1-4A, sub-clause 2. It should however be noted that this may also be a problem for Nordic claims leaders in cases where there are co-insurers domiciled in the UK, and the question will be enforcement of Nordic judgments against such co-insurers. Even so, the default rule for this situation is ordinary court proceedings, cf. below. 

Sub-clause 1 states that “If the parties have agreed in writing that disputes shall be solved by arbitration, the following applies instead of Cl. 1-4A”. This means that the ordinary jurisdiction and background law Clause applies if the parties have not made a specific agreement to the contrary. The reason for keeping this solution as the default rule is that it is uncertain to what extent the Nordic shipowners in fact want to refer all disputes to arbitration. As mentioned above under Cl. 1-4A, sub-clause 1, with reference to sub-clause 4, there are rules in Finnish and Swedish law stating that any marine insurance dispute must be placed before the local official adjuster before the dispute can be brought before the domestic courts. A reference to arbitration would depart from this system and this may not be a preferable choice.  

Sub-clause 2 is the Nordic Offshore and Maritime Arbitration Association’s (Nordic Arbitration) arbitration clause sub-clause 1 and 3. The Nordic Maritime and Offshore Arbitration Association was established in 2017, and has developed arbitration regulation and best practice guidelines to fit Nordic legal tradition and culture. It is therefore convenient to refer arbitration to this system. 

Sub-clause 3 regulates the place of arbitration and background law for an insurance effected with a Nordic claims leader, and conforms to the regulation in Cl. 1-4A, sub-clause 2. 

Sub-clause 4 regulates the place of arbitration and background law for an insurance effected with a non-Nordic claims leader. It follows from Cl. 1-4A, sub-clause 3, that this rule applies as a default rule if the parties have not made a specific agreement on jurisdiction, forum and choice of law. If jurisdiction is not agreed, the case is referred to arbitration in Oslo, cf. first sentence. In this case, it follows from the second sentence that Norwegian background law applies. However, if the parties have agreed to arbitration in another Nordic country it is more natural to apply the law of this country. This solution also conforms to the provision for Nordic claims leaders in sub-clause 3. If the parties have agreed on arbitration in a non-Nordic country, however, the background law is again Norwegian. The Plan is mainly based on Nordic and Norwegian law and practice, and it is not convenient to combine the Plan with another legal system, cf. above on the Commentary to Cl.1-4A, sub-clause 1. If the parties have agreed on ordinary court proceedings and jurisdiction but not agreed on background legislation, Cl. 1-4B, sub-clause 4, on Norwegian background law should be applied by analogy.

According to sub-clause 5, any changes in the terms of the agreement set out in sub-clauses 2, 3 and 4 must be in writing. This conforms to Cl. 1-4A, sub-clause 4.