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PARSONS & WHITTEMORE, INC. v. REDERIAKTIEBOLAGET N

March 22, 1956

PARSONS & WHITTEMORE, Inc., Plaintiff,
v.
REDERIAKTIEBOLAGET NORDSTJERNAN, Defendant



The opinion of the court was delivered by: HERLANDS

The question to be determined upon this motion for a stay of trial pending arbitration is whether or not the rate agreement sued upon and containing an arbitration provision is a 'maritime transaction' or 'a contract evidencing a transaction involving commerce' within the meaning of the United States Arbitration Act, Title 9 U.S.C.A. §§ 1-3. Unless the agreement is one or the other, this Court would be without jurisdiction to enforce the arbitration provision and to issue a stay in aid of it.

For the reasons set forth in this opinion, it has been concluded that the agreement is both a 'maritime transaction' and 'a contract evidencing a transaction involving commerce'; and that the application for the stay should be granted.

Plaintiff is a New York corporation which buys wood pulp on the Pacific Coast for export and sale to customers outside the United States. Defendant is a Swedish corporation. It maintains a steamship line and acts as a common carrier between the Pacific Coast of Canada and the United States and European ports. It is a member of the Pacific Coast European Conference, legalized under 46 U.S.C.A. § 814.

 To induce shippers to patronize Conference lines exclusively, the Conference gives shippers who sign exclusive patron-age or rate agreements a right to tariff rates lower than those applicable to nonsigners. These rate agreements are on forms prepared by the Conference. On March 5, 1951, plaintiff signed such an agreement. The utilization of a 'Shippers Rate Agreement' appears to be standard operating procedure for member lines of the Pacific Coast European Conference.

 It is essential to consider the terms of that rate agreement. It provides (paragraph '1') that the shipper (i.e., plaintiff) shall offer for transportation on vessels of the several steamship lines (who are members of the Pacific Coast European Conference and are referred to as 'carriers') 'all of its shipments by water' on which the contract rates (as shown in the relevant tariff of the Conference) are applicable.

 It further provides:

 'This agreement covers all export shipments of the Shipper * * *. All such shipments shall be tendered to the Carriers for their vessels * * *. In agreeing to so confine the carriage of its (their) shipments to the vessels of the Carriers the Shipper hereby promises and declares it is the intent and purpose to do so without evasion * * *.'

 Paragraph '3' provides:

 'This is a rate agreement and is not and shall not be construed to be a space agreement. Space agreements may be entered into as hereinafter provided with the Carriers, parties hereto. * * *'

 Paragraph '4' provides:

 'The Carriers severally agree to furnish from time to time, when requested, at the applicable contract rates * * *, space for the aforesaid shipments of the Shipper to the discharging ports of the Carrier(s), provided that such space is available when the Shipper makes application therefor. * * *'

 Paragraph '5' provides:

 'Arrangements for the actual carriage of the shipments covered by this Agreement is to be individual with the Carrier specially agreeing to transport the ...


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