Chairman's Commentary

The data on the current financial crisis is alarming to say the least. There are predictions that whilst the stock markets have recovered some 40% of their values from the absolute trough we are headed for a long recession.

The capital markets have taken a beating . Hedge Fund assets – a reasonable New York health barometer have dropped from a peak of $1,850 billion in 2007 to $1,330 billion at the end of the first quarter of this year and net cash flowing out is running almost four times ahead of last year's pace ( $103 billion in first quarter 2009 versus $154 billion for all of 2008) . IPO's are lagging an amazing 84% behind 2008 which itself was 90% down on 2007!

At the beginning of 2008 the world's five largest investment banks were in New York City. Then Bear Stearns was acquired by JP Morgan, Lehman went bankrupt and Merrill Lynch was acquired by B of A. Goldman Sachs and Morgan Stanley became bank holding companies and five became zero!

So what can be drawn from this alarming data ( supplied courtesy of our friends at Crain's New York)? Firstly we are seeing the emergence of the boutiques and smaller banks, we are seeing an increase in the prominence of small private equity shops . All this will contribute to the reshaping of the Wall Street and capital markets landscape.

Where will the maritime industry come out in all this? Clearly with over 40 public companies and private equity constantly evaluating investments in the space, there is a place for our industry in a redefined Wall Street environment. The volatility that is so inherent in our markets continues to keep investors at a respectful distance and the severe cuts in dividends have impacted retail as well as institutional investors. Yet shipping stocks continue to trade with abandon and the dollar volume of US stocks traded rose 41% quarter over quarter and the U.S. continued to account for a staggering 50% of the value of all shipping stocks traded in the last quarter with a total trading volume of over $61 billion.

So whatever happens New York will be a the forefront in both better and worse times and NYMAR will continue to support and champion the cause!

NYMAR:	While your business revolves around the weather, how are you applying this to the business of arbitration?
Austin:	My business is providing expert opinion, specialized that it is, to owners, charterers, clubs and law firms in the maritime industry. Besides the many arbitrations I've participated in as a panel member, I have provided expert opinion to owners and charterers here in the United States as well as in maritime arbitrations in London and Canada. The experience has enabled me to gain a close-up understanding of the expectations of the users of arbitration services. I know this will serve me well as the Board of Governors and Officers of the SMA go about our business.
NYMAR:	How has this aspect changed over the years?
Austin:	As in all business matters today, streamlining is paramount. I see that in my business. Unnecessary, expensive and out-of-date practices do not survive. For example, today, New York maritime arbitrations have extensive email electronic correspondence between the parties and panel – it is only the exception that does not. The savings in time and cost to the users and arbitrators are great. The net result is a better, faster, and less expensive process.
NYMAR:	You are the newly elected President of the Society of Maritime Arbitrators. What is your vision for the next two years of the SMA?
Austin:	My term of office is two years. My predecessors and the Board of Governors have done great work in keeping the Society's rules and practices up to date and it is my desire to continue to work along those lines. We have a dynamic board and membership and during my term I see only a strengthening of the SMA's position as a leading organization in international maritime arbitration practices. We have for years conducted our luncheon speaker program where we have heard from prominent experts on such topics as arbitration appeal practices, allocation of fees, and even issues in London arbitration. This, of course, will continue and, in fact, we are going to develop programs within the Society to further disseminate the latest thinking on legal, arbitration and shipping issues to the membership. We are planning on conducting a series of themed seminars for the membership and users to accomplish this goal. The first one is under discussion for Connecticut in the fall. Additionally, I plan to conduct more mock arbitrations in order to sharpen the skills of the membership. Think of it as batting practice (even Jeter and Wright take batting practice).
NYMAR:	What do you feel are the greatest challenges facing the SMA?
Austin:	The SMA's challenge is to work with the whole of the NYMAR community to develop within the maritime industry a fuller appreciate of "New York Maritime, Inc" (As a graduate of Fort Schuyler, I already have a deep appreciation for New York Maritime College). Our collective NYMAR challenge is to ensure that international companies continue to see New York as a shipping center with expertise to meet their needs in all sectors of the industry. The challenge to me and the Board of Governors is to continue to inform people about the SMA, its rules and benefits. For example, there are some that still do not realize that in our rules, New York panels can award attorneys' fees. The allowance depends on the merits and facts of the case. Additionally, here in the U.S., reasons for vacating an award are very limited. On the other hand, many think that in London, you can easily appeal decisions, whereas the 1996 English Arbitration Act has made it very difficult to appeal an award. Locally, we have to work within our own house to be sure arbitrations continue to move forward in a timely manner – almost all do so. Remember, the SMA is not an arbitration administration such as the AAA. There is no such thing as an administrative fee based upon the size of the claim. In New York arbitrations, matters are administered by the attorneys and the panel collectively. This has great benefit in keeping administrative expense to an absolute minimum, but it sometimes introduces issues of timeliness, which only the presidential bully pulpit can address, when it comes to administration.
NYMAR:	If you were to give a "State of the SMA" address today, what would you say?
Austin:	The state of the SMA is strong and vibrant. We have an active and involved membership with expertise from across the industry. As a constituent of the international maritime industry and a 45 year old institution, we are a solid resource for the resolution of shipping disputes. In matters of maritime arbitration, the SMA offers rules for expert dispute resolution services conducted within a community of eminent maritime attorneys and arbitrators all ultimately accountable to what is considered to be the most influential American maritime court, the United States District Court for the Southern District of New York. For shipowners or charterers, it doesn't get any better than that.
NYMAR:	Two months ago in this column, we reprinted an article from ten years ago about arbitration in New York. You responded with some updates, but promised a fuller listing this month. What are some of the significant differences in today's arbitration practices?
Austin:	I've mentioned some of them already but the short list is: Full time arbitrators, awarding of legal fees, and modernization of the process via electronic communications. We have a membership with a fuller scope of shipping industry backgrounds and in addition, our awards are available electronically to anyone with Internet access.
NYMAR:	What do you believe are some of the greatest misperceptions about arbitration in New York?
Austin:	Here is my list: Misperception: The publishing of awards is mandatory. Wrong! We encourage the publishing of the decisions of our members but it is not mandatory. Parties have the right to keep a decision private and confidential. Misperception: Reluctance to award attorneys' fees. Wrong! It is the norm. Misperception: Drawn out stop and go proceedings. Wrong! The days of "stop and go" proceedings are certainly a thing of the past. Currently in New York, most arbitration hearings are booked for a full block of consecutive hearing dates. Our members make themselves available to suit the needs of the parties. This reduces time and expense to the parties. Misperception: No arbitrators with legal backgrounds. Wrong! When the issues being decided are more "legalistic" than commercial, we have many people in our membership with legal education and skills for the parties to consider. For example, as president, I recently had to appoint an arbitrator under a container service contract calling for someone with a background in shipping law and container claims. No problem, done.
NYMAR:	Have Rule B attachments been a factor in the arbitration world? How big?
Austin:	Rule B has not had much direct impact on the SMA activities as it is a matter for the courts. Certainly, as an invaluable tool to secure claims pending in arbitrations, it serves a purpose. As it establishes security for a claim, it is likely to encourage parties to proceed to arbitration once the claimant has been successful in the courts.

Dahlman Rose Indices

Monthly News

Coast Guard Commandant Allen Announces 2009 World Maritime Day Parallel Events: New York City anchors national port events

Commandant Thad Allen has announced that the United States will be the host of the 2009 World Maritime Day Parallel Event being held in New York City and around the country on October 16th. The theme this year is "Climate Change: A Challenge for IMO too!". The event will be marked in New York at Chelsea Piers with a delegate conference, a "Green Ship" Exhibition, Student Science Fair and a reception. At the urging of Commandant Allen, activities with marine environmental protection themes will take place in ports around the nation marking the event.

"We are honored to be the hosts of the 2009 International Maritime Organization (IMO) World Maritime Day Parallel Event. The Parallel Event is an opportunity for the maritime community to come together with the public to celebrate the contributions of the maritime industry, as well as discuss and promote ways in which we can address areas important to us all" stated Admiral Allen. "We expect representation from the IMO, the international and national maritime communities, the public, the media and students from grammar schools through university."

The program in New York will examine Climate Change issues from emerging technology and best practices to regulatory implications and actions. A concurrent Green Ship Exhibition will highlight products and services relating to the maritime industry, and a judged Student Science Fair will engage high school and university participation.

While the US Coast Guard is the host of the event along with the IMO, other federal agencies will also be participating, including the Department of State, the Environmental Protection Agency, and NOAA. Corporate and organization sponsors (to date) include Alaris, Blank Rome, Chamber of Shipping of America, the Coast Guard Foundation, Sea River Maritime, Lockheed Martin Corporation, North American Marine Environment Protection Association (NAMEPA), New York Maritime Inc. (NYMAR), Overseas Shipholding Group, BIMCO, ASA (American Salvage Association), Waterways Council, Sea Research Foundation, and the Teekay Corporation.

"We invite you to participate in this signature event to help us recognize the importance of the maritime industry and showcase our contributions to the safe, secure and environmentally responsible transportation of the world's goods. We hope you will consider being part of our event and support our goal to advance environmentally responsible shipping" concluded Admiral Allen.

For more information on the 2009 World maritime Day Parallel Event, go to www.uscg.mil/or email worldmaritimeday@uscg.mil.

Leroy Lambert To Lead Standard Club's NY Office

LeRoy Lambert, a leading maritime lawyer, is to become President of Charles Taylor's New York P&I operations and so head the Standard Club's US presence from September 1. Mr. Lambert joins the club from Blank Rome, having been in private practice for twenty five years. He was a partner with Healy & Baillie until it combined with Blank Rome in 2006. Mr. Lambert's practice has included all areas of maritime law, with the emphasis on charter-party and bill of lading disputes.

The New York office provides support and claims management to the club's US and Canadian members, which include a number of blue chip maritime companies. It also acts as correspondent in the region for all club members, supporting them in their claims handling and loss mitigation. The other executives in the NY office are also all qualified lawyers.

The New York office is a key hub in the Standard Club's global network of offices, which includes Bermuda, Singapore, Piraeus and Tokyo, as well as the main office in London.

Capital Link Launches a Series of Stock Market Maritime Indices

Capital Link, Inc. a New York based Investor Relations and Advisory firm with a strategic focus on shipping, announced the launching of a series of stockmarket Maritime Indices. To read the press release, click here. To see the Maritime Indices, click here.

Marine Money Week Another Smashing Success

Marine Money welcomed 971 delegates to this year's conference, belying the state of the markets, or the bankers' nearly uniform statement of "open for business—sort of" (the exception was the banker who flat out stated they weren't lending). While all present were treated to a serious dose of reality, there was some optimism from owners and a mixed message from economists who are still sorting out the alphabet soup of recovery (is it a U, V, W or V plus L??). Peppered into the proceedings were outstanding social/networking events hosted by AMA Capital Partners, Jeffries and Dahlman Rose. For photos of the event, go to www.marinemoney.com.

CMA Annual Summer Picnic & Lobster Bake: Thursday evening, July 16th

The always popular CMA Annual Summer Picnic will take place this Thursday evening, July 16th, 2009 from 5:30-9:00PM once again at the Stamford Yacht Club (97 Ocean Drive West Stamford, CT http://www.stamfordyc.com for directions).

The CMA will once again subsidize the event and are able to hold the price at $75 per person for CMA Members, the same price as for the past six years for the Summer Picnic. For Non-Members the cost will be $125 per person, which will include a one-year membership to the CMA.

The fee includes - 3.5 hours of open bar of Heineken, domestic draft beer, house wine, juice and soda and a Picnic Menu, including lobster!

Financial Performance Charts

Shipping Company Performance Chart (NYSE)
(source: NYSE)

Shipping Company Performance Chart (NASDAQ OMX)
(source: NASDAQ OMX)

Taste of NYC | Upcoming Events and Entertainment

NYC Websites

• newyork.timeout.com/
• www.nycvisit.com
• www.zagats.com
• http://www.ny.com/nightlife/
• http://www.ny.com/museums/
• http://www.allny.com/antiques/auctioneers.htm
• http://www.nytix.com
• http://www.majorleagueevents.com
• http://goingcoastal.wordpress.com

• "The New York International Fringe Festival"
  The Buzz — The Broadway season has come to an end, Bernie Madoff is locked up for a long, long time... come to New York and head to the fringe!!
  
  The New York International Fringe Festival (FringeNYC) is the largest multi-arts festival in North America, with more than 200 companies from all over the world performing for 16 days in more than 20 venues – that's a total of more than 1300 performances! FringeNYC generates an atmosphere of extreme excitement, and our energy is contagious! www.fringenyc.org. Click here for more info.
  
  
• Best "Mobile" Restaurants
  The Buzz — A perfect time to visit our city…and you can eat cheaply here too.. Time Out recently recommended these best of the best "mobile" restaurants... perfect for that $5,000 per cay VLCC rate! Click here for more info.
  
  
• River to River Festival
  18 Battery Place - All Summer
  The Buzz — A summer-long free arts festival, River to River was founded after 9/11 to rejuvenate lower Manhattan. The name refers to the geographical location of the festival, which runs from Chambers Street all the way down to the southern tip of Manhattan and across. In short, from river to river. Everything from concerts (Ian Hunter and Chuck Brown, to name a few) to dance troupes and theater productions can be seen, and over 500 different performances are expected. Click here for more info.
  
  
• Celebrate Brooklyn! Festival
  Prospect Park, Prospect Park Bandshell - June 8-August 15
  The Buzz — People who live in Brooklyn celebrate it daily, but for those who don't, this festival is a great reason to show your love. Every summer since 1979, Prospect Park has hosted a wide array of free performances of music, dance, and film. For instance, this summer you get to enjoy the music of Femi Kuti, Blonde Redhead, Robert Cray, Burning Spear, and many more. The Prospect Park Bandshell seats 2,000, but why not pack a picnic and stake a claim on the lawn? Click here for more info.

New York State Travel & Tourism To speak with a travel counselor, call during regular business hours (Eastern Standard Time) at 800/CALL-NYS (U.S., territories, possessions and Canada) or 518/474-4116 (all other areas). http://www.iloveny.com/home.aspx

New York City Travel & Tourism (NY City & Company)
212-484-1222

NYC 311 - City of New York directory assistance covering events, attractions and other citywide information

• Dial 311 in Manhattan (NYC), Staten Island, Bronx, Queens and Long Island.
• Dial 212-639-9675 outside of Manhattan (NYC), Staten Island, Bronx, Queens and Long Island. This is a toll call.