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In re Canadian Gulf Line Ltd.

July 29, 1938

IN RE CANADIAN GULF LINE, LIMITED; CANADIAN GULF LINE, LIMITED,
v.
CONTINENTAL GRAIN CO.



Appeal from the District Court of the United States for the Southern District of New York.

Author: Hand

Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges.

AUGUSTUS N. HAND, Circuit Judge.

The question on this appeal is whether or not petitioner Canadian Gulf Line, Ltd., sub-charterer of the motorship "Soloy", is entitled to an order directing the respondent Continental Grain Co., charactered owner of the vessel, to arbitrate certain disputes between the parties in accordance with the provisions of the charterparty. The Canadian Gulf Line, Ltd., will hereafter be called "charterer" and The Continental Grain Co. "owner".

Under the original charterparty dated January 21, 1937, the charterer hired the motor "Dagrun" from the owner for six months but later paid $2,000 to have the motor "Soloy" substituted, believing that she would be available for the charterer's business earlier than the other vessel. The terms of the original charterparty under an "Addendum" thereto were to apply to the "Soloy". The bonus of $2,000 is alleged to have been paid upon the owner's representation that she would be available earlier than the "Dagrun" to take on newsprint paper at Powell River, British Columbia, whence the charterer by contract with the shipper was to transport the paper to Texas where it was to be delivered to newspaper publishers for use in their presses. The agreements between the parties to the charter nowhere contained any provision that the "Soloy" was to be engaged in any particular trade or contained any reference to the payment of $2,000 as a consideration for obtaining an earlier vessel than the "Dagrun".

The "Addendum" to the charter dated March 19, 1937, provided for substitution of the "Soloy" and concluded thus:

"Rate of hire and all other terms and conditions and exceptions of the said charter party remaining in full force and effect without alteration."

Clause 17 of the original charter reads as follows:

"That should any dispute arise between the Owners and the Charterers, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them, shall be final, and for enforcing any award this agreement may be a rule of the Court."

Disputes having thereafter arisen between the parties, they entered into a written agreement in consideration of each refraining from demanding immediate arbitration pursuant to Clause 17, supra. The agreement referred to the charter dated January 21, 1937, and Clause 4 of that agreement provided: "that if the claims heretofore asserted by Canadian-Gulf Lines, Ltd., against Continental Grain Company under the above dated Charter Party and Addendum are not settled and compromised between the two said parties on or before December 1, 1937, then and in such event either of the said parties may immediately demand arbitration of the same matters without further notice to the other, and that the matters in dispute between the said parties shall thereafter proceed to arbitration as promptly as circumstances permit."

The charterer demanded arbitration of its claims against the owner in respect to the following matters:

(1) Damages arising from a sale by the owner to the charterer of bad Diesel oil.

(2) Loss of ten days' hire.

(3) Damages in the amount of $9,060 for excess cost of rail transportation over water carriage of the newsprint paper from Powell River in British Columbia to Texas because of delay caused by ...


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