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ANDROS COMPANIA MARITIMA, S.A. v. ANDRE & CIE.

March 21, 1977

ANDROS COMPANIA MARITIMA, S.A., as agents for Owners and/or Chartered Owners of the S.S. SIFNOS and the S.S. PAROS, Plaintiff, against ANDRE & CIE., S.A., Defendant.


The opinion of the court was delivered by: CONNER

MEMORANDUM AND ORDER

CONNER, D.J.:

 The subjects of the above-captioned maritime action are two February 1975 charter parties for the carriage of wheat from the United States Gulf Coast to Basrah, Iraq, executed by plaintiff Andros Compania Maritima, S.A. [Andros], a Panamanian corporation, and defendant Andre & Cie., S.A. [Andre], a corporation organized under the laws of Switzerland. Claiming demurrage due and owing under each charter party, Andros commenced this suit on June 8, 1976, and, pursuant to the provisions of Rule B(1) of the Supplemental Rules for Certain Admiralty and Maritime Claims, F.R.Civ.P. (Supp.), *fn1" / effected a maritime attachment on all funds, credits, or other properties owned by Andre and held within this district by Garnac Grain Company [Garnac]. Presently before the Court is Garnac's motion for an order vacating that attachment.

 At the root of Garnac's principal arguments on this motion is an arbitration clause contained in both of the charter parties at bar, providing in relevant part as follows:

 "All disputes from time to time arising out of this contract shall, unless the parties agree forthwith on a single arbitrator, be referred to the final arbitrament of two arbitrators carrying on business in London, * * *, one to be appointed by each of the parties, with power to such arbitrators to appoint an Umpire. * * *."

 Pursuant to that provision and at Andros' instance, albeit subsequent to the institution of this suit, the parties nominated their respective arbitrators in London; the arbitration of the claims raised in Andros' complaint is apparently now in progress.

 I.

 Garnac maintains that the above arbitration clause places the dispute between Andros and Andre within the bounds of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards [the Convention], 3 U.S.T. 2517, T.I.A.S. No. 6997, as implemented by Sections 201-08 of the Federal Arbitration Act, 9 U.S.C. §§ 201-08 (1976 Supp). In the light of 9 U.S.C.§ 202, *fn2" / and of the United Kingdom's accession to the Convention in September 1975, U.K. Treaty Command No. 6419, Andros would hardly be able to counter that contention. *fn3"

 With so much acknowledged, there remains for consideration Garnac's argument that the Convention's applicability here is perforce fatal to the attachment presently under contest. That assertion, it must be noted, is not without some precedential support. Thus, in McCreary Tire & Rubber Company v. CEAT S.P.A., 501 F.2d 1032 (3d Cir. 1974), the Third Circuit, concluding that "a continued resort to foreign attachment * * * is inconsistent with [the Convention's] purpose," id. at 1038, directed the district court to discharge the attachment levied in its case. Similarly, in Metropolitan World Tankers Corp. v. P. N. Pertambangan Minjakdangas Dumi National, 1976 A.M.C. 421 (S.D.N.Y. January 5, 1976), Judge Motley of this district, citing McCreary as authority, vacated an order of attachment, observing that, "there is no * * * indication that * * * prearbitration attachment is warranted under the convention." Id. at 423.

 Andros, for its part, would have this Court conclude that the McCreary and World Tankers cases are distinguishable -- and significantly so -- from our own. To be sure, the distinctions urged are readily noted. Thus, in both McCreary and World Tankers, the attachments at issue -- by contrast to the attachment in the present case -- had been effected pursuant to the provisional-remedy allowances of State law. Moreover, in neither case could the plaintiff have colorably invoked -- as Andros does herein -- the aid of Section 8 of the Federal Arbitration Act, 9 U.S.C. § 8, which provides that,

 "If the basis of jurisdiction be a cause of action otherwise justiciable in admiralty, then * * * the party claiming to be aggrieved may begin his proceeding hereunder by libel and seizure of the vessel or other property of the other party according to the usual course of admiralty proceedings, and the court shall then have jurisdiction to direct the parties to proceed with the arbitration and shall retain jurisdiction to enter its decree upon the award."

 Nevertheless, whether such distinctions are as significant as Andros would have them be is rather more problematic. Admittedly, the rulings in McCreary and World Tankers rest in part upon a base not furnished in the present case, i.e., the fact that "'the obvious purpose of the enactment of [9 U.S.C. § 205] permitting the removal [from State court] of all cases falling within the terms of the [treaty] was to prevent the vagaries of State law from impeding its full implementation," Metropolitan World Tankers Corp. v. P. N. Pertambangan Minjakdangas Dumi National, supra, at 423, quoting McCreary Tire & Rubber Company v. CEAT S.P.A., supra, at 1038.However, it is no less true that each decision -- in at least some pertinent part -- bears unhappily upon Andros' present cause. Hence the following observations from McCreary:

 "Quite possibly foreign attachment may be available for the enforcement of an arbitration award. * * *. This complaint does not seek to enforce an arbitration award by foreign attachment. It seeks to bypass the agreed upon method of settling disputes. Such a bypass is prohibited by the Convention if one party to the agreement objects. Unlike § 3 of the federal Act, article II(3) of the Convention provides that the court of a contracting state shall 'refer the parties to arbitration' rather than 'stay the trial of the action.' The Convention forbids ...


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