By Armand M. Paré, Jr.
| Recent Sharp Trend in Awarding
Attorneys' Fees in New York Maritime
Arbitrations
By Armand M. Paré, Jr. |
|
The New York maritime arbitration community has frequently been lauded for the publication of reasoned awards which are available both in print and on line through LEXIS, although it has sometimes been criticized, especially in England, because New York arbitrations fail to award "costs", i.e., attorneys' fees, to the prevailing party. Recent developments in New York maritime arbitrations show a sharp trend in awarding attorneys' fees now rendering such criticism largely unwarranted.
This trend is best placed in perspective by a review of the last 100 arbitration awards published by the Society of Maritime Arbitrators, Inc. ("SMA"). This reveals that in 53% of these cases in which a final award was issued, an allowance towards attorneys' fees was made by New York arbitrators to the prevailing party. These awards are dated from September 1996 to January 1998 and span from SMA Award Nos. 3305 to 3405. Of these 100 awards, attorneys' fees were awarded on 47 occasions, denied on 42 occasions and on 11 occasions the panels issued partial final awards deferring a decision concerning fees until the final award. In the more recent of these awards, there is an even more pronounced trend in awarding attorneys' fees. In the last 25 printed awards, for example, the percentage of final awards in which attorneys' fees were granted was up to 60%.
The recent surge in the awarding of attorneys' fees in New York is perhaps best understood in light of both 1994 amendments to the SMA rules permitting the awarding of attorneys' fees and cases liberalizing the legal bases for awarding such fees, culminating in a 1996 Court of Appeals decision in Paine Webber Inc. v. Bybyk,81 F.3d 1193 (2d Cir. 1996). In that case, the federal Court of Appeals for the Second Circuit, which sits in New York, stated: "The Agreement provides that 'any and all controversies' shall be submitted to arbitration; there is no express limitation with respect to attorneys' fees." Id.at 1202. On that basis, the court refused to find that the arbitrators had no jurisdiction to hear a claim for attorneys' fees in the underlying securities arbitration in that case.
In view of the strong recent trend in awarding attorneys' fees in New York
arbitration, there has been a need and an interest in having some
considerations with respect to the awarding of attorneys' fees. A joint
committee consisting of members of the SMA and the U.S. Maritime Law
Association ("MLA") has been reviewing this topic for more than a year. At
the annual meeting of the MLA in New York at the end of April 1998, the MLA
Arbitration Committee approved the considerations drafted by the joint MLA/SMA
committee and the full SMA Board of Directors is presently studying
these considerations for approval and recommendation to the SMA membership. It
is hoped and expected that these considerations will continue to promote and
help unify the awarding of attorneys' fees in maritime arbitrations in New
York.
These considerations are available
for viewing at www.nb-ny.com.
Armand M. Paré, Jr. is a partner with Nourse & Bowles, LLP in New York and is the MLA Chairman of the MLA/SMA Liaison Committee that recently promulgated the 'Proposed Considerations for Awarding Attorneys' Fees in Maritime Arbitration' discussed herein. The views expressed herein are solely those of the author.
