In maritime transportation an arbitration clause limited to General Average/Arbitration does not apply to claims related to belated delivery

May 20, 2019

A company managing a ship and the ship owner contracted in a vessel lease agreement with an Israeli company for the shipment of palm oil from Singapore through the Philippines and Indonesia to Israel. The agreement included a provision setting that any General Average will be decided in arbitration in London, England, under the York/Antwerp Rules, but upon a delay in the delivery of the goods due to technical issues with the ship, the Israeli lease approached the Admiralty Court of Haifa.
The Supreme Court held that the arbitration clause deals only with General Average and thus a claim for belated delivery may be held in the Admiralty Court in Haifa instead of an arbitration in London. An arbitration clause limited to claims of General Average nature deals only with cases related to the sacrifice of property, cargo or ship parts, upon danger, for the joint safety of the ship and its cargo and after the ship captain declared a ‘general average’ status, as opposed to a general arbitration clause that states that “all disputes” will be heard in arbitration. Here the arbitration clause also referred to the York/Antwerp Rules, which are dealing only with General Average claims.