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SANKO S.S. CO. v. COOK INDUS.

December 8, 1972

In the Matter of the Arbitration between SANKO S.S. CO. LTD., Petitioner,
v.
COOK INDUSTRIES, INC., Respondent


Brieant, District Judge.


The opinion of the court was delivered by: BRIEANT

MEMORANDUM

BRIEANT, District Judge.

 Respondent ("Cook") has moved for an order pursuant to 9 U.S.C. §§ 9 and 13, confirming the award of a panel of arbitrators, dated June 19, 1972, and for entry of judgment thereon. Petitioner ("Sanko") has moved for an order pursuant to 9 U.S.C. § 10, vacating the arbitration award. No evidentiary hearing has been held.

 The controversy arbitrated arose out of a maritime contract with respect to which an action in admiralty would have been within the subject matter jurisdiction of this Court. The Federal substantive law of arbitration applies, and the Court has jurisdiction over the parties and the subject matter. Robert Lawrence Co. v. Devonshire Fabrics, 271 F.2d 402 (2d Cir. 1959).

 Sanko is a Japanese controlled corporation which has an office in New York, and, in addition, is represented by its "general agent" in New York, J. H. Winchester & Co. ("Winchester"). Sanko is an owner of vessels available, inter alia, for charter in the international grain trade.

 Cook has been described by our Court of Appeals as "corn dealers in an industry made up of comparatively few companies." Cook Industries, Inc. v. C. Itoh & Co. (America), Inc., 449 F.2d 106, 107 (2d Cir. 1971).

 The issues raised on the respective motions may be determined upon uncontested facts set forth in the affidavits of the parties, and the inferences drawn therefrom.

 On February 26, 1971, Cook and Sanko entered into a voyage charter party. This charter party provided for arbitration as follows:

 
"NEW YORK PRODUCE EXCHANGE ARBITRATION CLAUSE
 
Should any dispute arise between 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, for the purpose of enforcing any award, this agreement may be made a rule of the Court. The arbitrators shall be commercial men."

 A dispute did arise. The parties entered into a written submission of arbitration, dated May 10, 1972, as contemplated by the Produce Exchange Rules. Three commercial men were nominated; Mr. Barnett by Sanko and Mr. Crooks by Cook. These two, so chosen, appointed Mr. John P. Besman as the third arbitrator.

 The arbitrators conducted hearings and the Court has reviewed the transcript. An arbitration award was made, dated June 19, 1972, which describes the history of the controversy and finds that the charterers (Cook) failed to make a timely nomination of the loading port, ultimately selected as New Orleans, as required by the charter party, and that the owners (Sanko) failed to tender notice of readiness by August 25, 1971, the time limited by the charter party.

 The vessel was delayed in discharging at Houston on the completion of her prior commitment, and consequently did not arrive at New Orleans until August 26th, at which time her notice of readiness to load was rejected by Cook as untimely. Cook then exercised its option to cancel in accordance with the charter party.

 Cook contended before the arbitrators that as a result of "various conversations", Sanko knew well in advance of the actual nomination that the charterers intended to nominate New Orleans, and that even if official notification of nomination of the loading port had been given timely, the vessel could not have made the canceling date. The panel determined unanimously that Cook had breached the charter party in failing to make a timely nomination of the loading port, but decided that they could not "accept the proposition put forth by owners that there is any causal relationship whatsoever between the charterers' tardy nomination of a loading port by some 24 hours and the fact that the vessel missed her canceling date." Accordingly, the arbitrators unanimously denied Sanko's claim and assessed the costs and arbitrators' fees equally.

 It cannot be said that this unanimous disposition of the controversy by these three commercial men was unusual, unfair, unjust or unreasonable.

 The motion to vacate the award is based on that portion of § 10 of the Arbitration Act, reading as ...


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