The opinion of the court was delivered by: CONNER
WILLIAM C. CONNER, District Judge:
This controversy arises out of two 1980 contracts by which petitioner Fils et Cables d'Acier de Lens ("FICAL") agreed to sell and respondent Midland Metals Corporation ("Midland") agreed to buy galvanized steel wire. Pursuant to New York arbitration clauses in the contracts, the parties submitted to arbitration to dispute respecting the quality of the product delivered under the contracts and the resulting non-payment of the purchase price. On September 23, 1983 the arbitrators rendered their decision awarding specified principal amounts to each party plus interest on certain of the principal amounts due from Midland to FICAL. FICAL petitioned this Court for confirmation of the award and Midland cross-petitioned for modification of the award under an unusual contract provision stipulating that any arbitration award would be subject to judicial review to determine whether the arbitrators' findings of fact are "supported by substantial evidence" and whether "as am matter of law based on said findings of fact the award should be affirmed."
On April 5, 1984, this Court rendered an Opinion confirming the arbitration award insofar as it determined the principal amounts due from each party to the other, but remanded the matter to the arbitrators for further findings or explanation respecting the basis for their award of interest on the principal amounts due FICAL but not on the principal amount due Midland.
On September 24, 1984, the arbitrators rendered a supplemental award to explain their rationale respecting the award of interest. The matter is now before the Court on FICAL's petition to confirm the supplemental award and Midland's cross-petition to modify it.
The Court's opinion of April 5, 1984 is referred to for a fuller exposition of the background of the controversy. For present purposes, the following brief summary will suffice.
On June 4, 1980, the parties entered into a contract by which FICAL agreed to sell and Midland agreed to buy 650 metric tons of galvanized steel wire of specified quality which Midland intended to resell to Taiwan Power Co. ("Taiwan"). Although Taiwan accepted the wire and paid for it, Taiwan complained that the product failed to meet the contract specifications. On September 8, 1981, Midland sent FICAL a Telex demanding $862,154.56 (representing the full sales price of $818,154.56 plus $44,000 -- the amount of th performance bond which Midland and posted to guarantee delivery pursuant to the contract). Midland indicated that it was withholding $266,217.30 which was due from it to FICAL because of the dispute over the quality of the product.
After lengthy negotiations, Midland entered into a settlement with Taiwan by which the $44,000 performance bond was forfeited as of January 19, 1982 and Midland paid Taiwan an additional $181,104.14. on February 17, 1983. In addition, during the period up to February 17, 1983, Midland incurred expenses of $24,920.86 in connection with the dispute of its settlement, making a total of $250,025 paid by Midland because of the failure of the wire to meet specifications.
The parties entered into a second contract dated December 4, 1980 by which Midland agreed to purchase from FICAL an additional quantity of galvanized steel wire intended in part for delivery to other customers and in part for Midland's inventory. The contract price for this wire was payable in French francs ("ff") 90 days after the invoice dates.
In their original award, the arbitrators ruled that Midland should pay FICAL the following principal amounts:
$ 266,217.30 for wire sold to Taiwan
$ 4,788.97 for wire sold to other customers
ff 1,004,503 for wire in inventory and in hands ...