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COMPANIA PORTORAFTI COMMERCIALE, S.A. v. KAISER IN

July 2, 1985

In the Matter of the Arbitration between COMPANIA PORTORAFTI COMMERCIALE, S.A., as Owner of the M/V CAPTAIN GREGOS, Petitioner, and KAISER INTERNATIONAL CORPORATION, as Charterer, Respondent


The opinion of the court was delivered by: HAIGHT

MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

These are cross-motions to compel arbitration and for related relief. Subject matter jurisdiction is founded upon the Federal Arbitration Act, 9 U.S.C. ยง 1 et seq.

 Facts

 At the pertinent times petitioner Compania Portorafti Commerciale, S.A. owned the motor vessel CAPTAIN GREGOS. Petitioner chartered the vessel for a voyage to respondent Kaiser International Corporation. The written charter party was dated November 19, 1984. Clause 24 provided for arbitration of disputes. It reads in pertinent part as follows:

 
"24. ARBITRATION. Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London whichever place is specified in Part I of this charter pursuant to the laws relating to arbitration there in force, before a board of three persons, consisting of one arbitrator to be appointed by the Owner, one by the Charterer, and one by the two so chosen. The decision of any two of the three on any point or points shall be final. Either party hereto may call for such arbitration by service upon any officer of the other, whereever [wherever] he may be found, of a written notice specifying the name and address of the arbitrator chosen by the first moving party and a brief description of the disputes or differences which such party desires to put to arbitration. If the other party shall not, by notice served upon an officer of the first moving party within twenty days of the service of such first notice, appoint its arbitrator to arbitrate the dispute or differences specified, then the first moving party shall have the right without further notice to appoint a second arbitrator, who shall be a disinterested person with precisely the same force and effect as if said second arbitrator has been appointed by the other party. . . ."

 In the event of a party's failing to appoint its arbitrator within the 20-day period specified, so that the demanding party also appointed the second arbitrator, those two arbitrators select the third arbitrator to complete the arbitration panel.

 The chartered voyage was completed in December, 1984. Petitioner asserts a claim for demurrage. Respondent disputes the claim and asserts a balance owing to it under the charter.

 The parties' representatives engaged in a dialogue hoping to resolve the disputes. Certain of the pertinent communications appear in the motion papers. For example, on March 15, 1985 petitioner's representative sent to Kaiser supporting documents on the demurrage claim and concluded on this relatively amicable note:

 
"On behalf of Owner, we would certainly appreciate your usual cooperation in placing this matter on the top of the pile since the amount involved is considerable."

 Petitioner's representative sent a follow-up telex to Kaiser on March 20, still looking towards amicable resolution, but now suggesting that respondent remit $140,000 "as good will gesture with understanding that balance claimed will be processed within reasonable period of say 10 days."

 Rather than making such a payment, respondent apparently asserted additional claims against petitioner. That provoked a telex to respondent on behalf of petitioner dated March 29 which read in pertinent part:

 
"PURSUANT TO PROVISIONS OF C/P CLAUSE 24 THIS TLX WILL SERVE AS OWNS FORMAL DEMAND TO COMMENCE IMMEDIATE ARBITRATION NEW YORK FOR ALL CLAIMS ASSERTED UNDER CHARTER INCLUDING CHTRS ALLEGED CARGO LOSS/CONTAMINATION CLAIMS AT CLOGHAN POINT/ST EUSTATIUS.
 
"OWNER HAS APPOINTED MR HAMMOND L CEDERHOLM, C/0 JAMES W ELWELL AND CO INC, SUITE 1557, ONE WORLD TRADE CENTER, NEW YORK NY 10048 (TEL 212-432-0380) AS ARBITRATOR. OWNER DEMANDS THAT CHARTERER ...

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