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January 20, 1975

Alexander Yulio et al., Plaintiffs
Moore-McCormack Lines, Inc. et al., Defendants

Pollack, D.J.

The opinion of the court was delivered by: POLLACK

Decision and Opinion


 This is a case of Admiralty and Maritime jurisdiction which has been tried to the Court without a jury. Plaintiffs, duly licensed marine engineers, claim that they are entitled to receive severance pay based upon the transfer of the S.S. BRASIL and the S.S. ARGENTINA to foreign registry by defendant Moore-McCormack Lines, Inc. The transfer was made to Holland-American Lines, Inc., named as a co-defendant. The plaintiffs are members of Marine Engineers Beneficial Association, and MEBA, District No. 1 (hereinafter referred to as MEBA, collectively) which are also named as defendants.

 The collective bargaining agreement between MEBA and defendant Moore-McCormack Lines, Inc. in effect at the time of the transfer of the two vessels to foreign registry provided that severance pay in the amount agreed therefor would be paid to the Special Fund of the MEBA Pension Plan, rather than to the individual engineers who lost their jobs as a result of the transfers. The amounts of severance calculated and due under the agreed formula were paid by defendant Moore-McCormack Lines, Inc. to the MEBA Pension Trust to be placed in the Special Fund of the Pension Plan on the respective dates of transfer of the two vessels in August 1972.

 Shortly thereafter, counsel for plaintiffs raised a claim with the Union that the individual plaintiffs rather than the Special Fund were entitled to the severance pay. The Union submitted the claim of these individuals to the grievance process established by the collective bargaining agreement, and after a hearing thereon, in which counsel for plaintiffs participated, an Opinion and Award of the Impartial Arbitrator found that the provisions of the applicable 1972 collective bargaining agreement provided that severance pay was to be paid to the Special Fund of the Pension Plan upon the transfer of a vessel to foreign registry; that the individual marine engineers, including plaintiffs herein, were not entitled to receive severance pay; and that these provisions were controlling and effective as of the date of the transfer of the vessels in question to foreign registry. He thus held that defendant Moore-McCormack Lines, Inc. had properly paid the severance pay to the Special Fund of the MEBA Pension Plan.

 Some sixteen months after the determination of the Impartial Arbitrator, the plaintiffs instituted this action, allegedly on their own behalf and on behalf of the marine engineers duly assigned to the steamships BRASIL and ARGENTINA at the time of the ships' last voyages.

 At the close of plaintiffs' case, their counsel consented to the dismissal of the complaint against Holland-American Lines, Inc., with prejudice, and the complaint against it was thereupon dismissed, without costs. Decision as to the other defendants was reserved at the close of the entire case, and the parties were given leave to submit such post-trial briefs as they might deem necessary in the light of the submissions made theretofore. The case has now been finally submitted.

 For the reasons shown hereafter, the complaint must be dismissed on the merits and judgment entered in favor of defendants.

 The parties herein stipulated to a Statement of Facts, which was marked Plaintiffs' Exhibit 1, in evidence, with the exception by plaintiffs of general objections thereto on grounds of materiality and relevancy and specific objection to the matter contained in paragraphs 23 and 24, the content of which the Court now finds as fact, and with the further exception by plaintiffs that paragraph 9 should be amended to recite additionally that the collective bargaining agreement of 1969 referred to therein was arrived at after July 29, 1969 and made retroactive to June 16, 1969. The suggested inclusion of that information in paragraph 9 is not material to the determination of the issue before the Court and paragraph 9 is therefore made a finding of the Court in the form in which it has been stated in Plaintiffs' Exhibit 1. The objections on the ground of relevancy and materiality to matter contained in Plaintiffs' Exhibit 1 are overruled.

 Accordingly, Plaintiffs' Exhibit 1 is hereby incorporated by reference as part of the Court's findings of fact thereby avoiding its needless repetition herein.

 The plaintiffs challenge the validity of the arbitration mentioned above which was held in respect to their claims. The collective bargaining agreement provides that all disputes relating to the interpretation or performance thereof should be determined in accordance with the provisions in Section 2 entitled "Grievance Procedure and Arbitration". The evidence conclusively establishes that the arbitration procedure was duly observed.

 A Union representative who appeared as a witness on the trial herein testified, and the Court finds, that in accordance with the provisions of the collective bargaining agreement dated June 16, 1972 and applicable herein, a "Licensed Personnel Board" had been duly appointed and met on September 13, 1972; that it consisted of two persons representing and appointed by the Union, two persons representing and appointed by the shipowner and the Impartial Arbitrator, David Cole, Esq., who had been duly selected theretofore and who acted as chairman at the meeting. Notice of an arbitration hearing on the controversy set forth by the plaintiffs through their counsel had been duly furnished to the interested parties, including plaintiffs' then attorney. On that occasion the Union and Company representatives agreed to leave determination of the dispute to the chairman of the meeting, the Impartial Arbitrator, and the latter thereupon took the appropriate evidence, received briefs from the plaintiffs' attorney, and ultimately rendered the decision which is found in paragraph 33 of Plaintiffs' Exhibit 1.

 As shown in Plaintiffs' Exhibit 1, paragraph 26, the collective bargaining agreement provides:

The Arbitrator designated will serve as the chairman of any meeting of the Licensed Personnel Board. If said Board resolves any grievance either by majority vote or by mutual ...

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