Suggestions On Improving Floor Trading Arrangement Of Shipping Exchange From The Perspective Of Ship Sale And Purchase Brokers

Floor trading includes three aspects: membership system, business attestation and dispute resolution, among which membership system stands in the center. The construction of membership system plays vital role in the process of establishing floor trading mechanism. As to business attestation procedure, the functions of which can be summarized as follows: to mandate dealing inside exchange; to maintain business stability by impeding double contracts; and to block spreading of false information of ships. The alternative dispute resolution which is the necessary supplement to judiciary and arbitration has the obvious advantage in resolving small cases.Comparing with practices of Baltic Exchange, the floor trading through the Baltic Exchange is not mandatory and the exchange not endowed with the power of supervising individual business between members, but playing the neutral role without intervening with specific deal and in the way it functions establishes extensive networks between members in order to spread out information in the most efficient way. Through making sophisticated rules and regulations, the Baltic Exchange provides members with the commercial principles that are widely recognized by the shipping world and the cautious practitioners may find the breach of those rules and codes a really serious consequence. The core value of floor trading is not creating a floor and to mandate dealing inside, but lowering the risks of breach of contracts and torts by designing rules and overseeing and publicizing the improper practices that break those rules.Ship sale and purchase brokers (hereinafter referred to as SnP brokers) play key role in deals. SnP brokers may be found from time to time in relation to induction of breach of contracts or involved in double-contract scenario. The ambiguous identity of SnP brokers and lacking authority from principals may also affect the binding effects of contract. In some occasions SnP brokers may act as valuers, contracted or not, with intentions of promoting business.Endowing membership to SnP brokers will solve some legal problems arising due to induction of breach of contract and ambiguous identity of SnP brokers. The spreading of false ship information and double-contract deal also can be controlled through going through rigorous attestation procedure. As suggested in the thesis, shipping exchanges are highly expected to consider their role in retrospect, and also encouraged to invite brokers onboard the panel of ship evaluation. By doing all those things, improper practices in ship sale and purchase will be controlled. Exchanges will establish reputation in shipping world as well.