THE LMAA SMALL CLAIMS

PROCEDURE

and COMMENTARY

(Revised 1st January 2006)

THE LMAA SMALL CLAIMS PROCEDURE

1. INTRODUCTION

These provisions shall be known as the LMAA Small Claims Procedure 2006 effective 1st

January 2006. They shall apply to any dispute which parties have agreed should be referred

to arbitration under this Procedure. If any such agreement refers to a monetary limit for

disputes that may be so referred, such limit shall be deemed to exclude interest and costs

unless the parties agree otherwise.

2. APPOINTMENT OF ARBITRATOR

(a) If a dispute has arisen and the parties have agreed that it should be referred to arbitration

under the Small Claims Procedure, then, unless a sole arbitrator has already been agreed

on, either party may give notice to the other requiring him to join in appointing a sole

arbitrator. If within fourteen days the parties have agreed on a sole arbitrator and the

intended arbitrator has agreed to act, the Claimant shall within a further fourteen days

send to the Respondent (with copies to the arbitrator) a letter of claim accompanied by

copies of all relevant documents including experts’ reports and shall also send to the

arbitrator a remittance in his favour for the Small Claims fee as defined in para 3(b).

(b) If the parties have not within fourteen days agreed on a sole arbitrator, either party may

apply in writing to the Honorary Secretary, London Maritime Arbitrators Association for

the appointment of a sole arbitrator by the President. Such application shall be copied

to the other party and shall be accompanied by a copy of the letter of claim together with

copies of all said relevant documents and a remittance for the said Small Claims fee plus

£100, plus VAT where applicable, in favour of the LMAA. Where appropriate a party

applying to the President should provide a concise explanation of the issues which are

likely to arise and an indication as to whether any particular expertise on the part of the

arbitrator is required. The President, having considered the nature of the dispute shall

appoint an appropriate arbitrator and shall give notice to the parties. The LMAA. shall

send to the arbitrator the letter of claim and the documents together with the said Small

Claims fee, and shall retain the balance in respect of administrative expenses.

3. THE ARBITRATOR’S FEE

(a) The Small Claims fee includes the appointment fee, interlocutories, a hearing not

exceeding one day (if required by the arbitrator pursuant to para 5 (g)), the writing of the

Award and the assessment of costs (if any). It does not include expenses, such as the

hire of an arbitration room, which shall in the first instance be paid by the Claimant on

demand. However if there is any challenge to jurisdiction which, or which it is suggested

falls to the arbitrator to resolve, the arbitrator shall be entitled to charge on a reasonably

appropriate basis for such work, his additional fees being payable in the first instance by

the Claimant before he makes any award, ultimate liability for such additional fees being

for the arbitrator to resolve.

(b) The Small Claims fee shall be such standard fee as shall be fixed from time to time by the

Committee of the LMAA*: VAT shall be payable where applicable. For all purposes,

including time limits, payment of the Small Claims fee within 14 days of agreement being

reached upon a sole arbitrator under paragraph 2(a) shall be a condition precedent to the

valid commencement of proceedings under the Small Claims Procedure.

(c) In the event of the Respondent putting forward a counterclaim which exceeds the amount

of the claim an additional fixed fee in such amount (plus VAT where applicable), as shall

be fixed from time to time by the Committee of the LMAA*, is payable by the Respondent.

Payment of such fee within fourteen days of service of defence and counterclaim

submissions shall, for all purposes including time limits, be a condition precedent to the

Respondent’s entitlement to bring any such counterclaim within the proceedings in

question.

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(d) If the case is settled amicably before an award has been written, the arbitrator may retain

out of the Small Claims fee a sum sufficient to compensate him for services thus far

rendered and any balance shall be repaid.

4. RIGHT OF APPEAL EXCLUDED

The right of appeal to the Courts is excluded under this procedure. By adopting the Small

Claims Procedure the parties shall be deemed to have agreed to waive all rights of appeal.

For the avoidance of doubt, this provision does not apply to any ruling by an arbitrator on his

own jurisdiction.

5. PROCEDURE

(a) A letter of defence and details of counterclaim (if any) accompanied in each case by

copies of all relevant documents including any experts’ reports shall be delivered by the

Respondent to the Claimant within twenty-eight days from receipt of the letter of claim or

from the date of the appointment of the arbitrator, whichever shall be the later.

(b) A letter of reply and defence to counterclaim (if any) shall be delivered by the Claimant to

the Respondent within a further twenty-one days. Where an additional fee is payable

under paragraph 3(c) hereof in respect of the counterclaim, the twenty-one days shall run

only from receipt by the arbitrator of the additional fee. The arbitrator shall be entitled to

refuse to admit evidence submitted at the stage of reply and defence to counterclaim (if

any) if it should properly have been served with the letter of claim.

(c) The Respondent shall, if he so wishes, deliver to the Claimant a letter of reply to defence

to any counterclaim within a further fourteen days.

(d) Any extension to the above time limits (including that for the service of a letter of claim

set out in paragraph 2(a) above) must be applied for before expiry of the existing time

limit. If a party fails to serve its pleading within the time limit set, the arbitrator, on the

application of the other party or of his own motion, will notify the defaulting party that

unless the outstanding communication is received within a fixed period (maximum 14

days) he will proceed to the award on the basis of the submissions and documents before

him to the exclusion of all others. (In the case of failure to serve a letter of claim the

arbitrator shall make an award dismissing the claim.) The time allowed by the arbitrator’s

notice, added to any extension of time previously agreed between the parties in respect

of the same pleading, shall not in total exceed 28 days. Any pleading submitted by the

defaulting party subsequent to expiry of the time limit set by the arbitrator’s notice shall

not be admissible.

(e) Following the service of the letter of reply, or, where there is a counterclaim, following

service of the letter of reply to defence to counterclaim, the arbitrator may declare to the

parties that pleadings have closed. No further pleadings shall be considered by the

arbitrator following such a declaration.

(f) Copies of all the above letters and documents shall be sent to the arbitrator and to the

other party, or if the other party is acting through a solicitor or representative, to that