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February 23, 1983

In the Matter of the Arbitration between COMPAGNIA ITALIANA TRANSOCEANICA DI NAVEGAZIONE, S.p.A., Petitioner, and HUGO NEU & SONS INTERNATIONAL SALES CORP., Respondent

Sand, District Judge.

The opinion of the court was delivered by: SAND

SAND, District Judge.

Petitioner Compagnia Italiana Transoceanica Di Navegazione, S.p.A. ("Compagnia") has moved this Court for an order pursuant to 9 U.S.C. ยง 9 confirming an arbitration award dated September 10, 1982. Respondent Hugo Neu & Sons International Sales Corp. ("Hugo Neu") opposes such motion on the ground that the arbitration panel that rendered the award was not appointed in accordance with the governing contract provision. Upon consideration of the memoranda and affidavits and contentions of counsel at oral argument, and having resolved any and all factual issues in respondent's favor, the Court is of the opinion that the award should be confirmed.

 On October 5, 1977, Compagnia, as owner, entered into a written contract of charter with Hugo Neu, as charterer, of the vessel Transoceania Silvia. Clause 41 of the charter states:

"It is mutually agreed that should any dispute arise between Owners and Charterers, the matter in dispute shall be referred to three persons at New York for arbitration, one to be appointed by each of the parties herein, and the third by the two so chosen. Their decision or that of any two of them shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The arbitrators shall be commercial men. Should the two so chosen not be able to agree who the third Arbiter should be, then the New York Produce Exchange is to appoint such third arbitrator. The third arbitrator is to be an admiralty attorney."

 The last sentence of this clause, requiring that the third arbitrator be an admiralty attorney, is, as agreed upon by the parties, a typewritten addition to a standard arbitration provision for charter contracts.

 Hugo Neu contends, and Compagnia does not contest, that this insertion was made at the request of Hugo Neu; its purpose was to attain "greater certainty that the result would be more predictable and more consistent with legal precedents." Affidavit of John L. Neu, dated December 10, 1982, para. 3.

 Subsequently, disputes arose between Compagnia and Hugo Neu in connection with claims made by the former under the charter. In the first half of 1980, when it became apparent that these disputes would require resolution by arbitration, Hugo Neu was in contact with its counsel, Burlingham, Underwood & Lord, and specifically with Lars Forsberg, to represent Hugo Neu in the arbitration. Included in the papers received by Mr. Forsberg at that time was a copy of a letter dated February 29, 1980, sent by Alexander Nichols to Hugo Neu advising that Peter Avagliano, an arbitrator appointed by Hugo Neu, and Captain Aghelos C. Boulalas, an arbitrator appointed by Compagnia, had selected Mr. Nichols as the third arbitrator and procedural chairman. Exhibit 3 to Reply Affidavit of William J. Blumenschein, dated Jan. 5, 1983.

 The first hearing was held on June 19, 1980, and was attended by the three nominated arbitrators; Mr. Forsberg; and Mr. William Blumenschein of Walker & Corsa, counsel for Compagnia. Prior to the empaneling of the arbitration board, each of the nominees stated on the record his previous contacts with any of the parties or counsel and his maritime-related experience. With regard to the latter, Mr. Nichols stated:

MR. NICHOLS: I am the president of Brokers & Management Corporation. Brokers & Management Corp. is one of the companies under the group of companies otherwise identified as the Callimanopulos Group.
We represent owners and we attend vessels while they are in New York. And we do chartering for such vessels as dry cargo ships or tankers.
In the course of my employment with Brokers & Management, which goes back ten years, I have fixed ships with the firm of Mr. Avagliano, and to the best of my knowledge, all of these fixtures were uneventful and we never had a claim.
The same is also true with the firm of Hugo Neu. Again, I would like to say that all our fixtures were uneventful and did not involve disputes, litigations or arbitrations.
. . . .
I am familiar with both law firms representing the parties primarily due to my duties as a claims adjuster some ten, twelve years ago when I was working for LaMont Burns ...

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