The NOMA Arbitration Rules were introduced in 2017. With this, the Nordic countries have a well-functioning regime for shipping arbitrations, which offers more transparency and clarity than the ad hoc-arbitrations that were previously conducted. The rules have been warmly welcomed in the market as a Nordic alternative to the shipping arbitration institutions and rules in other jurisdictions. In this article we will give a short summary and update of the developments since 2017, and some comment on the status and way forward for NOMA.
The Nordic countries have for many years been a significant shipping and offshore hub. For this reason, a fair number of disputes within these sectors have traditionally been handled in arbitration. Contrary to what has been the case in other shipping hubs, notably New York, London and Singapore, arbitrations in the Nordic countries have traditionally been so-called “ad hoc”-arbitrations, i.e. not involving any arbitration institute or based on institutional arbitration rules. While this worked well for lawyers and other “insiders” in the Nordic shipping environment, it did not provide much transparency and comfort to parties from outside the Nordic countries.
For these and other reasons, the Maritime law associations of Denmark, Sweden, Finland and Norway decided some seven or eight years ago that it would be beneficial for all to establish a Nordic arbitration association and a set of arbitration rules applicable to the shipping industry. The initiative was also motivated by a desire to attract more international business to Nordic arbitration. Given the fact that Norway and Denmark had a significant offshore industry, it was decided that both the association and the rules should be referred to as “Offshore and Maritime Arbitration”. The rules as such are however general in nature, and may be used also outside the shipping and offshore industries.
The association was established and a working group with shipping law experts from all the Nordic countries was appointed to draft the new arbitration rules. The first set of rules (Rules of Nordic Offshore and Maritime Arbitration Association (NOMA)) were published in November 2017. As stated in the rules, they are based on the widely used UNCITRAL Arbitration Rules, but adjusted somewhat to reflect well established traditions in Nordic arbitration.
Together with the arbitration rules, NOMA issued a set of Best Practice Guidelines (the “Guidelines”). These are meant to be used together with the NOMA arbitration rules but may also be used in ad hoc arbitrations not based on a specific set of arbitration rules. The Guidelines specify in further detail matters that have developed over many years in Nordic arbitration, for example, issues to be dealt with at the Case Management Conference (CMC) held at an early stage of the arbitration, and the arbitrators’ use of procedural orders for the conduct of the arbitration.
At the beginning, few, if any, contracts had a NOMA arbitration clause, but it soon became a fairly common practice for parties to agree on the application of the Guidelines even if the NOMA rules had not been agreed in the contract. The Guidelines include a document named “CMC-matrix”, i.e. a document setting out the matters to be discussed at the CMC (Appendix 1), and a set of rules “on the taking of evidence”, aiming at setting out an efficient and economical process for the taking of evidence (Appendix 2).
The NOMA Arbitration Rules and related documents can be found on NOMA’s web site. The web site also includes news etc., including several articles published over the years in various publications. These articles provide a lot of information for those who would like more details.
Developments Since 2017
From the outset, it has been a goal for NOMA and the Nordic Maritime Law associations to market the NOMA Rules and Guidelines, and particularly to seek to convince major charterers and others in the industry to incorporate NOMA arbitration in their standard contracts. These efforts have been successful, and particularly gained traction when it was decided that NOMA arbitration would be introduced as an alternative dispute resolution mechanism in the new revision of the Nordic Marine Insurance Plan as of 2019. A very significant share of the world commercial fleet (more than 20%) is insured for H&M and LOH on these terms. Since then, NOMA has gradually been able to widen the application of the NOMA Rules.
NOMA appreciated from the outset that in order to offer an attractive product, the general arbitration rules should be accompanied by other dispute resolution tools that are helpful in order to resolve commercial disputes. In 2021 NOMA launched their NOMA Fast Track Arbitration Rules. As the name suggests, these rules provide a procedure aimed at securing an even more efficient and fast process, with features such as a sole arbitrator being the main rule, shorter time limits etc. The rules may be applied to any dispute, but unless otherwise agreed between the parties will apply to disputes where the claim and/or counterclaim does not exceed USD 250,000.
NOMA also decided to issue their own Mediation Rules, and these were launched earlier this year (2023). Together with the Mediation Rules, NOMA also issued a Model Agreement for mediation.
The development of NOMA products may have been slowed down somewhat during the COVID-period, but in the autumn of 2022, it was decided to try to revive ongoing projects and the further development of NOMA. A new Board of Directors was appointed in November. Since then, the above-mentioned Mediation Rules have been launched, a Standing Revision Committee has been established (inspired by the Nordic Marine Insurance Plan) which will monitor and propose necessary changes to the various rules, and a Procedural Committee has been appointed to deal with certain procedural matters where NOMA’s involvement is required by the parties according to the rules. Earlier this year NOMA also launched a LinkedIn-profile where news etc. are regularly published. This is one of several marketing efforts put in motion lately.
A recommended NOMA Arbitration Clause has been on the NOMA website. When the Mediation Rules were launched, however, it was decided that the clause should be amended to become a Dispute Resolution Clause which would also include mediation. The new clause was published in August 2023.
Although NOMA refers to itself as institutional arbitration, the normal procedure is that the parties and arbitrators conduct the arbitration in accordance with the Rules but otherwise without any involvement by NOMA. NOMA will only become involved at the request of the parties, and only for limited purposes such as appointment of arbitrators if the parties fail to agree.
Nordisk and NOMA
Nordisk has all along been a strong supporter of NOMA. A former Nordisk Managing Director, Georg Scheel, was instrumental in drafting the first set of rules and was for the first years the contact person for NOMA. We have been represented on the advisory board from the outset, and in the working group drafting the Fast Track Arbitration Rules. At present we are represented on the Board of Directors and the Procedural Committee, and act as the NOMA contact (NOMA@nordisk.no).
Our engagement fits perfectly with our position as a Nordic defence club, and our role as publisher of the Nordiske Domme i Sjøfartsanliggender (“Nordic Maritime Judgments”, Nordisk – Nordiske Domme), a publication where judgments and arbitration awards within the shipping and transport sector in the Nordic countries have been published since 1900.
NOMA now seems well placed for gaining increased popularity and continued growth, with its functional dispute resolution rules and administrative structure in place.