Understanding the LMAA Small Claims Procedure (SCP)

A Practical Guide to Maritime Arbitration

Maritime disputes often arise in the course of everyday commercial operations. Whether the issue concerns hire, freight, demurrage, towage, cargo damage, offshore services or ship management, the cost of resolving a dispute should be proportionate to its value.

To address this need, the London Maritime Arbitrators Association (LMAA) developed the Small Claims Procedure (SCP), a streamlined arbitration process designed to resolve lower-value maritime disputes efficiently, economically and fairly.

Although the procedure is simplified, it remains a formal arbitration conducted under the Arbitration Act 1996 (as amended by the Arbitration Act 2025). Awards issued under the SCP are legally binding and may be recognised and enforced internationally under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention), subject to the applicable legal requirements.

This article provides a practical overview of how the procedure operates.

What is the LMAA Small Claims Procedure?

The SCP is a specialist maritime arbitration procedure intended to provide a quicker and more cost-effective alternative to conventional arbitration.

It preserves the essential principles of arbitration—party autonomy, procedural fairness and impartial decision-making—while simplifying procedural steps, limiting written submissions and reducing overall costs.

Unless the parties agree otherwise, the Procedure applies where both the claimant's claim and any counterclaim do not exceed US$100,000, with the monetary limit applying separately to each. Interest and costs are excluded from this calculation unless the parties agree otherwise.

When Does the Procedure Apply?

The SCP may apply where:

• the parties have incorporated the LMAA Small Claims Procedure into their contract;

• the parties agree to use the Procedure after a dispute has arisen; or

• the arbitration agreement otherwise permits its use.

Commencement of arbitration under the Procedure is sufficient to interrupt any contractual or statutory limitation period.

Appointment of the Arbitrator

The Procedure is designed to be conducted before a Sole Arbitrator.

The parties are encouraged to agree upon the appointment of an arbitrator within 14 days after one party requests such agreement.

If they are unable to do so, either party may apply to the Honorary Secretary of the LMAA for the appointment of a Sole Arbitrator by the President of the LMAA. When making such an application, the parties may identify the nature of the dispute and indicate whether any particular technical or legal expertise would be desirable, but they may not nominate a preferred arbitrator.

Regardless of the method of appointment, the arbitrator must remain independent, impartial and free from conflicts of interest throughout the proceedings.

The Arbitrator's Fee

Unlike many commercial arbitrations where arbitrators charge by the hour, the SCP operates on a standard fixed-fee basis.

The applicable fee is determined periodically by the LMAA Committee and published separately on the LMAA website.

The standard fee generally includes:

• appointment of the arbitrator;

• interlocutory applications;

• a hearing of up to one day, where required;

• preparation of the award; and

• assessment of costs.

Additional fees may arise in limited circumstances, such as jurisdictional challenges or certain counterclaims.

Payment of the prescribed fee is a condition precedent to the continuation of the arbitration.

How the Procedure Works

1. Commencement of Arbitration

The claimant commences arbitration by serving a Notice of Arbitration in accordance with the arbitration agreement and the Arbitration Act.

2. Appointment of the Arbitrator

The parties either agree upon a Sole Arbitrator or an appointment is made through the LMAA appointment process.

3. Exchange of Written Submissions

The procedure follows a structured sequence of written submissions.

The claimant serves:

• a Letter of Claim (maximum 2,500 words), together with supporting documents.

The respondent serves:

• a Letter of Defence (maximum 2,500 words);

• a Counterclaim, if any (maximum 2,500 words).

The claimant may then serve:

• a Reply (maximum 1,000 words); or

• a Reply and Defence to Counterclaim (maximum 2,500 words).

Finally, where appropriate, the respondent may serve:

• a Reply to Defence to Counterclaim (maximum 1,000 words).

The arbitrator may require submissions that exceed these limits or fail adequately to identify the issues to be revised before the proceedings continue.

Documentary Evidence

The SCP is primarily a documents-only procedure.

Supporting documents typically include:

• charterparties;

• contracts;

• bills of lading;

• invoices;

• correspondence;

• statements of account;

• survey reports;

• technical documentation;

• contemporaneous records.

Unlike conventional litigation, there is no general disclosure process.

However, where the arbitrator considers that relevant documents have not been produced, the arbitrator may order their production and may draw appropriate inferences if they are not produced without adequate explanation.

Expert Evidence

Expert reports are not automatically admissible.

They require the permission of the arbitrator and are subject to the arbitrator's directions. Unless otherwise directed, expert reports are limited to 2,500 words.

Oral Hearings

One of the principal features of the SCP is that oral hearings are exceptional rather than routine.

Most disputes are determined solely on the written submissions and supporting documents.

Where the arbitrator considers that fairness requires an oral hearing, the hearing is normally limited to a single working day (five hours), with each party being afforded an equal opportunity to present its case.

The Award

Once submissions have closed, the arbitrator considers the evidence and issues a written Award.

Awards under the SCP are normally reasoned unless the parties have agreed otherwise.

The Procedure encourages the arbitrator to publish the Award within one month following receipt of the final submissions in documents-only cases, or within one month of the conclusion of any oral hearing.

The arbitrator also retains powers to correct accidental errors, clarify parts of the Award and issue additional awards where appropriate, consistent with section 57 of the Arbitration Act 1996.

Appeals and Challenges

One distinctive feature of the SCP is that, by adopting the Procedure, the parties agree to exclude appeals to the courts.

This contractual waiver promotes finality and certainty.

The exclusion does not prevent a party from challenging the arbitrator's jurisdiction where such a challenge is permitted by law.

Costs

The arbitrator has discretion to assess costs on a commercial basis, taking into account the nature and complexity of the dispute.

Recoverable legal costs are subject to the maximum limits prescribed by the LMAA from time to time.

In addition to legal costs, the successful party will ordinarily recover the Small Claims fee, although all costs remain subject to the arbitrator's discretion.

Enforcement of Awards

One of the principal advantages of arbitration is the international enforceability of arbitral awards.

Awards rendered in London may generally be recognised and enforced in jurisdictions that are party to the 1958 New York Convention, making arbitration particularly attractive where parties, vessels and assets are located in different countries.

This international enforceability is one of the principal reasons why London remains one of the world's leading centres for maritime arbitration.

Why Choose the SCP?

For many maritime disputes, the SCP offers significant practical advantages:

• specialist maritime decision-makers;

• fixed arbitrator's fees;

• streamlined procedure;

• limited disclosure;

• limited written submissions;

• reduced costs;

• expedited timetable;

• confidential proceedings;

• internationally enforceable awards.

These features enable parties to obtain a binding commercial decision without the delay and expense often associated with more complex litigation or arbitration.

Conclusion

The LMAA Small Claims Procedure demonstrates that effective dispute resolution need not be lengthy or prohibitively expensive.

By combining procedural efficiency with the legal certainty provided by the Arbitration Act 1996 (as amended) and the international enforceability afforded by the New York Convention, the Procedure provides an attractive mechanism for resolving lower-value maritime disputes.

For shipowners, charterers, offshore contractors, insurers and other participants in the maritime industry, it continues to represent one of the most efficient and commercially effective forms of maritime dispute resolution available.

Further Reading

• Arbitration Act 1996 (as amended by the Arbitration Act 2025)

• LMAA Small Claims Procedure 2021

• LMAA Terms 2021

• Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958)

Disclaimer: This article provides a general overview of the LMAA Small Claims Procedure and is intended for information purposes only. It does not constitute legal advice and should not be relied upon as a substitute for the applicable arbitration agreement, the current LMAA Procedures or professional legal advice.