ABSTRACT
A reference to arbitration may arise from the agreement of the parties or from statute. Arbitration is considered to be an alternative to the judicial settlement of disputes in the public arena and so S. Kroll1 argues that arbitration replaces state courts. Maritime arbitration is like commercial arbitration in that both are creatures of contract and so are subject to the constraints imposed by the law of contracts on the ability of individuals to negotiate the terms of their agreement, which means that the parties are at liberty to shape the form of their arbitration. A party entering into a contract has a free choice between arbitration and judicial litigation. Parties bind themselves to some form of arbitration by means of an arbitration clause contained in the contract that governs their relationship. For instance, an arbitration clause can be contained in a bill of lading contract and the ultimate holder of the bill of lading contract is then bound to arbitrate any claim arising out of a breach of the bill of lading contract.
