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IN RE ANK SHIPPING CO.

November 7, 1984

In the Matter of the Arbitration between ANK SHIPPING CO. OF GREECE, Owner of the M/V "EAGLE," Petitioner, and SEYCHELLES NATIONAL COMMODITY CO., LTD., Respondent.


The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

 This is a petition pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. by Ank Shipping Co. of Greece ("Ank") to compel respondent Seychelles National Commodity Co., Ltd. ("Seychelles") to arbitrate disputes arising out of a maritime contract of charter party. Seychelles cross-moves to dismiss the petition and to assess attorney's fees and disbursements against Ank.

 The litigation arises out of an ill-starred voyage in May and June of 1982 of the M/V EAGLE, owned by Ank. Indeed, it appears from the motion papers that this was the last voyage of the EAGLE under Ank's ownership.

 By charter party dated May 5, 1982, Ank chartered the EAGLE to Seychelles to carry a cargo of bagged sugar from Sagua de Tanamo, Cuba to Mahe, Republic of Seychelles. The Seychelles Islands are located in the Indian Ocean, about 1,000 kilometers to the northeast of Madagascar.

 The EAGLE completed loading at Sagua de Tanoamo on or about May 24, 1982, the master issuing bills of lading on that date. On May 27 Ank's agent billed Seychelles and received prepaid freight of $261,250, that sum representing 95% of the total charter freight.

 However, the EAGLE did not progress particularly far in her voyage. For reasons which do not appear from the present record, she put into the port of San Juan, Puerto Rico, where on June 25, 1982 she was arrested by a warrant issued by the Clerk of the United States District Court for the District of Puerto Rico. The warrant of arrest was obtained in aid of a suit in rem and in personam brought by a bunker supplier who furnished bunkers to the EAGLE at Barranquilla, Colombia in November, 1981, and remained unpaid.

 Much of the factual discussion appearing in this opinion is adapted from the opinion and order of the Hon. Hector M. Laffitte, United States District Judge, who conducted the proceedings involving the EAGLE in the District of Puerto Rico, sub nom. Zeba Maritime Co. v. M.V. EAGLE, etal, D.P.R. Civ. No. 82-1560HL.Seychelles has attached a copy of Judge Laffitte's opinion and order to its motion papers in the case at bar.

 As will appear from the ensuing discussion, ANK was encountering financial difficulties. However, before tracing the course of the Puerto Rican litigation, it is significant to note that disputes had arisen between Anka dn Seychelles arising out of events at the Cuban loading port. Ank claimed that Seychelles was liable under the charter party for port expenses and detention incurred at the loading port; and further, that Ank had a lien against the cargo in respect of such claims.

 On July 9, 1982, while the vessel was in San Juan, Ank's agents telexed Seychelles' agents as follows:

 "UNLESS BY 1200 HOURS EDT JULY 12, 1982 OWNERS ARE PAID THE CURRENT CHARGES WHICH YOU HAVE RUN UP IN THE AMOUNT OF 89,875.00 DOLLARS, THEY WILL EXERCISE THEIR LIEN AGAINST THE CARGO AND SELL THE SAME ACCOUNTING TO YOU FOR THE BALANCE. THESE ARE LIQUIDATED DAMAGES."

 Seychelles' agent responded on July 12, 1982:

 "IN RESPONSE TO YR MESSAGE OF JULY 9 1432H, CHARTERERS HAVE RESPONDED AND REQUEST THAT YOU TAKE NOTE OF ...


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