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Jonathan Lux: In a world of conflict, the value of London's mediators shines

This article was originally published in TradeWinds, The Global Shipping News Source. Written by Terry Macalister.

Blessed are the peacemakers, it says in the Bible’s Book of Matthew 5:9, and it is tempting to wonder where to find some of them in these times of conflict.

You tend to think Catalonia could do with a peacemaker, as could Donald Trump and members of his own Republican Party who seem increasingly at odds with each other.

And what about Theresa May and Michel Barnier as they rock and roll their negotiating way around a Brexit schism?

This week, we hear that northern Italian states are flexing their muscles and questioning why they should bail out their financially weaker neighbours in the south of the country. Is this desire for more autonomy going to lead to something wider in times to come?

The fact is that these political upheavals cannot make the world an easier place to navigate economically and commercially.

National fragmentation and uncertainty is almost bound to lead to more commercial bust-ups — including in the maritime field.

Well that is the view of someone who spends his life in a kind of peacemaking role: Jonathan Lux, a London lawyer who is well known in shipping.

“Brexit is creating huge uncertainty and volatility and wherever you get those kinds of conditions it inevitably leads to disputes,” he argued.

“You could think that the place where mediation is needed most urgently is the Brexit negotiation themselves.”

Lux, a mediator, arbitrator and barrister attached to the St Philips Stone legal chambers, has more than a theoretical interest in Britain’s terms of exit from the European Union.

“There are definitely opportunities and threats from Brexit in terms of London’s role as a maritime law centre.

“The EU has been a force for promoting mediation as a way of settling commercial disputes by ensuring settlements are respected in all member states.

“The threat would come from Britain leaving the EU and not ensuring the same policy commitments are reinforced in UK law.”

Maritime disputes

Others also have concerns that cross-border disputes could be made harder to resolve if Britain went its own way.

About 70% of worldwide maritime disputes are believed to be dealt with in London, whether by the commercial courts or via arbitration or mediation. It seems warring parties like the relative certainty that comes from a legal system built around hundreds of years of case law.

“If we [Britain] pull out of the EU it does not sound the death knell for mediation but it may be more difficult for EU member states if we disapply bits of EU law.”

Lux is a particular champion of mediation, seeing it as a low cost and speedy way of breaking through major disagreements between, say, shipowners and their charterers.

Even the courts themselves have expressed concern about the soaring cost of lawyers and litigation proceedings that can stretch out for years at a time, when many owners are suffering from low freight rates and high debt levels.

But Lux also believes that mediation can provide the kind of innovative solutions that a judge would be unable to propose. And a mediation process is private and confidential — something that must be favoured by the majority of shipping executives.

“Mediation is always looking for the place of shared interest between the two parties instead of the kind of winner/loser system that tends to result from court cases.

“We had a tanker owner who had lost $1m from a charter cancelled because it was claimed the tanker arrived in port late. The mediation result gave the charterer first refusal on specified cargoes, voyages and freight rates. It suited both parties equally. There was no winner or loser.”

And Lux says mediation is a force for good that is the third stage in a wider human search for solutions to disputes.

“The first stage was trial by combat, which was all blood and gore; the second was a rights-based system, on the basis of law made by a King's or Queen's Judges; and the third is mediation, which is an interest-based system of disputes resolution,” he said.

The biggest advantage of mediation is that it allows both parties in a dispute to walk away with goodwill intact. In a world beset by conflict that solution has got to be blessed.

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