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Liberian Vertex Transports Inc. v. Associated Bulk Carriers

June 29, 1984

LIBERIAN VERTEX TRANSPORTS, INC., AS OWNER OF THE ORE/OIL MOTOR VESSEL WORLD KINGDOM, PLAINTIFF-APPELLANT,
v.
ASSOCIATED BULK CARRIERS, LTD., OF HAMILTON, BERMUDA, AS TIME CHARTERER UNDER A TEXACOTIME II CHARTER PARTY DATED APRIL 2, 1982, DEFENDANT-APPELLEE



Appellant Argues that the District Court Erred in Refusing to Confirm a Partial Final Arbitration Award.

Feinberg, Chief Judge, Meskill and Kearse, Circuit Judges.

Author: Feinberg

FEINBERG, Chief Judge:

Liberian Vertez Transporters, Inc. (LVT), appeals from an order of the United States District Court for the Southern District of New York, Kevin Thomas Duffy, J., denying LVT's petition to confirm a partial final arbitration award against appellee Associated Bulk Carriers, Ltd. (ABC), and granting appellee's cross-petition to vacate the award. For reasons stated below, we find that Judge Duffy's order was not an appealable final order, and we dismiss the appeal.

I.

In April 1982, LVT, as owner, and ABC, as charterer, entered into a charter party, pursuant to which ABC agreed to hire from LVT the vessel WORLD KINGDOM. The agreement called for the arbitration of disputes.

The vessel was redelivered in March 1983. Both LVT and ABC then prepared a final monthly statement of amounts due under the charter party. LVT's calculation indicated a balance due LVT of $220,286.71. In contrast, ABC's statement indicated a credit due ABC of $5,694.89. LVT then demanded arbitration pursuant to the charter party's arbitration clause and the case was submitted to a pnel of three arbitrators. LVT sought an immediate partial final award of $125,841.19 on four claims: (1) $67,463.68 withheld by ABC as an offsest for a cargo shortage claim raised against ABC by a sub-charterer of the vessel; (2) $4,377.51 for an additional day of hire, not paid because of what LVT alleged ws a mathematical error; (3) $50,000 as a loading bonus; and (4) $4,000 as a cleaning bonus for making the vessel suitable for oil cargo in September 1982. LVT also sought interest, costs and attorney's fees. LVT argued that a partial final award as to these claims was appropriate because ABC's non-payment was clearly unjustified and in violation of the charter party.

LVT also presented other claims to the arbitrators, but did not ask to have them included in the partial final award: (1) $17,327.63 as additional hire while the vessel was cleaned in March 1983; (2) $41,296.94 as additional hire for the use of fuel during this cleaning period; (3) $4,000 as a bonus for such cleaning; and (4) $73,618.85 as a performance bonus. LVT conceded that an evidentiary hearing might be necessary before the adjudication of these claims.

ABC raised defenses to each of the claims that LVT sought to include in the partial final award. It also asserted that it was entitled to offsets of $25,327.13 as a result of a "slow pumping" claim, $9,121.89 for expenses that should have been borne by LVT but were in fact disbursed by ABC, and $58,606.58 for hire improperly included in LVT's final statement. ABC also argued that it would be inappropriate for the arbitrators to enter a partial final award.

An interim decision and partial final award was issued in November 1983, with one arbitrator dissenting. LVT was awarded the full $125,841.19 that it sought, plus interest. The panel's majority noted that a partial final award was appropriate because the issues decided in the award were not "factually dependent upon those issues which ha[d] not yet been considered." It found that "uncontested hire is separable from contested hire, which will be dealt with at a later date." The dissenting arbitrator disagreed. He stated that the dispute did not present any separable issues, as the relevant question was "the amount of final hire owing under the charter, not whether one or more segments of this hire were deducted in error." He added:

To segregate this issue into what appears to be disputed and undisputed portions, always an imprecise art in the early stages of an arbitration, is, I submit, inconsistent with prior arbitration practice and can only result in needlessly fragmenting these proceedings. There can be no finality in the disposition of this issue until all claims pertaining to it are adjudicated.

LVT then petitioned the district court for an order confirming the award. ABC cross-petitioned for an order vacating the award. Judge Duffy refused to confirm the award on the ground that it was not a "final and definitive award" within the meaning of 9 U.S.C. § 10(d). Thus, he denied LVT's petition and granted ABC's cross-petition. This appeal by LVT followed.

II.

The threshold question before us is whether Judge Duffy's order is appealable under 28 U.S.C. § 1291, which grants the courts of appeals jurisdiction over "appeals from all final decisions of the district courts." Relying principally on Stathatos v. Arnold Bernstein S.S. Corp., 202 F.2d 525 (2d Cir. 1953), appellee ABC argues that the order is not a "final decision" because it did not put an end to the arbitration proceedings. In Stathatos, the district court considered a motion to vacate an arbitration award on the ground that newly discovered evidence showed that the law firm of one of the arbitrators had once represented a party to the arbitration. The district court granted the motion, vacating the prior award and resubmitting the matter to arbitration. Id. at 526. This court concluded that the district court order would result in further arbitration and ...


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