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ORIENTAL COM. & SHIPPING v. ROSSEEL

July 12, 1991

ORIENTAL COMMERCIAL & SHIPPING CO., (U.K.), LTD., ORIENTAL COMMERCIAL & SHIPPING CO., LTD. AND ABDUL HAMID BOKHARI, PLAINTIFFS,
v.
ROSSEEL, N.V., DEFENDANT.



The opinion of the court was delivered by: Sweet, District Judge.

OPINION

The Parties

OC & S is a Saudi Arabian corporation engaged in the petroleum business. OC & S-UK is an English corporation affiliated with OC & S. Bokhari is a citizen and resident of Saudi Arabia and is the principal owner of both OC & S and OC & S-UK. Rosseel is a Belgian corporation also engaged in the petroleum business.

The Facts

In 1984, OC & S-UK and Rosseel entered into a contract for the sale of oil. When the transaction was not completed as planned, Rosseel sought arbitration in New York pursuant to an arbitration clause in the contract. In support of this goal, Rosseel applied to the Honorable Peter K. Leisure of this district for an order compelling OC & S-UK to submit to arbitration. OC & S-UK resisted this application on the grounds that the arbitration clause was unenforceable. After Judge Leisure granted Rosseel's request, Oriental Commercial & Shipping Co. v. Rosseel, N.V., 609 F. Supp. 75 (S.D.N.Y. 1985), Rosseel sought to join OC & S and Bokhari as parties to the arbitration, asserting that they were principals of OC & S-UK. Oriental thereupon sought a further stay of the arbitration on the grounds that only OC & S and Bokhari were not subject to the terms of the contract. After an evidentiary hearing on the issue, Judge Leisure denied the request for the stay on December 19, 1988. Oriental Commercial & Shipping Co. v. Rosseel, N.V., 702 F. Supp. 1005 (S.D.N.Y. 1988) ("the December Opinion").

Oriental filed a timely notice of appeal of the December Opinion. However, during a pre-argument conference in connection with the appeal the Staff Counsel for the Second Circuit suggested that the Circuit Court lacked jurisdiction over the appeal and Oriental agreed to withdraw it. However, in order to preserve its rights for future resolution, Oriental insisted on the addition of a stipulation to the standard Second Circuit form for withdrawing an appeal. The language agreed upon read as follows:

  The parties agree that any proceedings to confirm
  or vacate the arbitration award will be brought in
  the U.S.D.C., S.D.N.Y. In any appeal therefrom,
  the issues sought to be raised here can be raised
  at that time.

("the Stipulation"). After both parties had signed the form, it was filed with the Clerk of the Circuit Court and marked "SO ORDERED" by the clerk on May 15, 1989.

On May 11, 1989, Judge Leisure filed an order dismissing the case in light of the December Opinion, 125 F.R.D. 398. Oriental filed a second appeal from this order, but again agreed to withdraw it on the same terms, by means of a second stipulation identical to the one entered on May 15.*fn1

The arbitration between Rosseel and OC & S-UK, OC & S and Bokhari took place in January and May, 1990, and in June the arbitrators awarded Rosseel over $4 million. An amended award was issued on August 16, 1990 ("the Award").

During the pendency of the London action, Oriental filed the present complaint, seeking declaratory judgment that the London Action was barred by the Stipulation, that Rosseel was required to seek confirmation of the Award in this jurisdiction and that the Award was not binding on the parties until such confirmation was granted. Oriental's stated goal in this proceeding is to preclude Rosseel from recovering on the Award until Oriental obtains appellate review of Judge Leisure's rulings enforcing the arbitration ...


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