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IN RE SEA DRAGON

October 6, 1983

In the Matter of the Arbitration between SEA DRAGON, INC., Disponent Owners of the DIMOS HALCOUSSIS, Petitioner, and GEBR. VAN WEELDE SCHEEPVAARTKANTOOR B.V. Respondent.


The opinion of the court was delivered by: DUFFY

MEMORANDUM & ORDER

KEVIN THOMAS DUFFY, D.J.:

 Petitioner, Sea Dragon, Inc. ("Sea Dragon"), owner of the vessel M.V. DIMOS HALCOUSSIS, seeks to confirm an arbitration award against respondent, Gebr. Van Weelde Scheepvaartkantoor B.V. ("Van Weelde"), charterer of the same vessel. Petitioner is a Panamanian corporation and respondent is a Dutch corporation. For the reasons set forth below, the arbitration award is vacated.

 I.

 FACTS

 In June, 1981, the parties entered into a contract for the shipment of four cargoes of sugar. The vessel performed the chartered voyage and discharged on February 24, 1982. A demand by the owner of the vessel for arbitration arose from a dispute over the non-payment of $105,435.83 in freight due. The respondent admitted the debt, but argued that the arbitration panel was precluded from rendering an award in favor of the petitioners. To do so, respondent argued, would violate a Netherlands' court sequestration order obtained by Uni-Ocean Lines Pte. Ltd. ("Uni-Ocean"), a creditor of the charterer. Nonetheless, on February 4, 1983, a majority of two arbitrators, with one dissenting vote, directed an award of $105,435.83 plus interest in favor of petitioner.

 The Netherland order obtained by Uni-Ocean enjoined the charterer, Van Weelde, from paying its debt to the owner, Sea Dragon. Uni-Ocean is a creditor of Sea Dragon and a debtor of Van Weelde. Uni-Ocean and Sea Dragon are currently in arbitration before a panel of the Society of Maritime Arbitrators. Persumably, Uni-Ocean is attempting to obtain a judgment for monies allegedly owed to it by Sea Dragon. Thus, the Dutch sequestration order is meant to provide a fund for the ultimate satisfaction of a judgment against Sea Dragon in the Uni-Ocean/Sea Dragon dispute. The Dutch order, issued on February 11, 1982, directs Van Weelde "to keep the sequestered matters [$105,435.83 owing from Van Weelde to Sea Dragon] in its possession under penalty of invalidity of the payments and/or deliveries made in contravention of this sequestration order." Respondent's Affidavit in Opposition, Exh. 1. Under Dutch law, apparently, a creditor by court order may attach any assets owned by his debtor, including monies owing to the debtor from a third party. See Affidavit of Peter Houtman, Respondent's Affidavit in Opposition. Thus, in the instant case, Uni-Ocean, as creditor of Sea Dragon, has attached the debt admittedly owing from Van Weelde to Sea Dragon.

 II.

 DISCUSSION

 Court review of arbitration awards is narrowly limited by 9 U.S.C. §§ 10 & 11. Confirmation is mandatory unless the award falls into one of the narrow statutory exceptions prescribed in sections 10 and 11 of the Arbitration Act or into one of the judicially-created exceptions.

 Respondent argues that the arbitration award in issue should be vacated under subsection (a) of 9 U.S.C. § 10. Subsection (a) provides:

 In either of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration --

 (d) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.

 Respondent's argument in opposition to Sea Dragon's motion to confirm is twofold. First, it contends that the arbitration board exceeded its authority by ruling in Sea Dragon's favor. Specifically, Van Weelde argues that ordering it to pay the debt owed to petitioner, contrary to the Dutch sequestration order was in manifest disregard of law and contrary to public policy. Second, respondent argues that the award should be vacated because it is incomplete, ...


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