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GENERAL AUTH. FOR SUPPLY COMMODITIES v. S.S. CAPET

April 9, 1986

GENERAL AUTHORITY FOR SUPPLY COMMODITIES, Plaintiff,
v.
S.S. CAPETAN COSTIS I, her engines, boilers, etc., OLYMBOS SHIPPING CORP., ARAB FINAGRAIN AGRI-BUSINESS TRADING COMPANY, Defendants; OLYMBOS SHIPPING CORP., Third-Party Plaintiff, v. STELLAR CHARTERING AND BROKERAGE, INC. and CONTINENTAL GRAIN EXPORT CORPORATION, Third-Party Defendants



The opinion of the court was delivered by: MACMAHON

MacMahon, District Judge.

 Olymbos Shipping Corp. ("Olymbos") and Stellar Chartering and Brokerage, Inc. ("Stellar") move, pursuant to 9 U.S.C. ยง 4, to compel arbitration and stay this action.

 FACTS

 In March 1984, Olymbos chartered its vessel CAPETAN COSTIS I to Stellar pursuant to a charter party to carry corn from the United States to Egypt. Stellar then entered into a charter party with Arab Finagrain Agri-Business Trading Co. ("Finagrain") to have the corn carried to Egypt. Finagrain had bought the grain from Continental Grain Export Corp. ("Continental").

 General Authority for Supply Commodities ("GASC") was the purchaser of the grain and the receiver in Egypt. When the cargo arrived, GASC refused to accept part of the shipment on the ground that it was damaged. GASC then brought this action, and Olymbos impleaded Stellar and Continental.

 Clause 41 of the charter party between Olymbos and Stellar states that the "Vessel is chartered on behalf of General Authority for Supply Commodities." The charter party also contains the following arbitration clause, entitled "New York Produce Exchange Arbitration Clause:"

 
Should any dispute arise between Owners and Charterers, the matter in dispute shall be referred to Three (3) persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The arbitrators shall be commercial men.

 The charter party between Stellar and Finagrain also noted that the vessel was chartered for GASC and stated that an "Arbitration Clause New York" was to be fully incorporated in the charter party.

 The bill of lading issued to the order of plaintiff for the cargo contained the following incorporation clause:

 
All terms, conditions and exceptions as per charter party covering this fixture and any addenda thereto to be considered as incorporated herein as if fully written.

 In February 1985, Stellar and Olymbos began choosing arbitrators for their dispute over the damaged cargo. The first arbitration session was held in June 1985. A second session was held in November 1985, and GASC was invited to participate. When GASC declined, the session was held without GASC's participation. Olymbos and Stellar then made these motions.

 DISCUSSION

 In this circuit, "a holder of a bill of lading which specifically refers to a charter party and in unmistakable language incorporates the charter party's arbitration section can compel a party to the charter party to arbitrate a dispute which comes within the scope of the arbitration provision." *fn1" It is also well settled in this circuit that when an arbitration clause in a charter party is limited to owners and charterers, it binds only those named parties. *fn2"

 In this case, the bill of lading does not specifically refer to the charter party. Rather, the bill refers to the "charter party covering this fixture," and there is no indication which of the two charter parties is meant. *fn3" Indeed, in its papers submitted to the arbitrator, Olymbos admitted that the bill of lading did not incorporate the charter party and its arbitration clause. In any event, even if the bill of lading did incorporate the charter party, the arbitration clause would ...


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