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October 11, 1991


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


Petitioner Sen Mar, Inc. ("Sen Mar") is a New York corporation with its principal place of business in New York. Tiger Petroleum Corporation ("Tiger") is a Netherlands Antilles corporation with its principal place of business in London, England. Both Tiger and Sen Mar are buyers and sellers of oil. Sen Mar has petitioned this Court for an order compelling Tiger to proceed to arbitration and for the appointment of an arbitrator under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "Convention"). See 9 U.S.C. § 201 et seq. Tiger has moved to dismiss the petition under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Tiger's motion asserts that: (1) the arbitration clause is unenforceable because it is not an "agreement in writing" within the meaning of the Convention; (2) the underlying contract is not enforceable because it does not satisfy the statute of frauds; and (3) the Court cannot construe the language of Sen Mar's purported arbitration clause as a mandate to arbitrate.


Prior to July 17, 1987, Miguel Puga, an independent oil broker, and Carlos Gamboa, Sen Mar's authorized selling agent, had several discussions regarding the contents and location of a Sen Mar oil tanker. Puga, although not authorized to contract on Tiger's behalf, was authorized by Tiger to determine the availability and location of oil, which is known in the industry as cargo. Gamboa contends that he and Puga formed an oral contract while Puga contends that he has never, nor would he ever, contract on Tiger's behalf.

On July 17, Sen Mar sent Tiger two telexes that purportedly confirmed the agreement reached in the Gamboa-Puga conversations. The first telex contained quantity, price and time for delivery terms, as well as an acknowledgment that Tiger's bank, Paribas Bank, London, would furnish a letter of credit. The second telex was more detailed, containing the terms of the first telex as well as terms that addressed payment, shipping details, inspection rights and losses. The second telex also provided that "Law: New York State Law, Arbitration, if any to be held in New York." Because these telexes were sent on a Friday afternoon, Tiger did not examine them until Monday, July 20.

On July 21, Puga informed Gamboa that Tiger had sent the telexes to Paribas and that Paribas objected to the payment term, which required Tiger's payment before Sen Mar's delivery of the oil. As a result, Puga and Gamboa orally agreed that Tiger would pay a greater price for the oil but would make payment after delivery of the oil. Sen Mar then sent a third telex to Tiger in which it renewed its request for a letter of credit.

On July 23, Tiger sent Sen Mar a telex informing Sen Mar that Tiger was having difficulty finding a buyer for the cargo. In addition, the telex stated that "meantime we have no possibility to issue any sort of document, due that cargo has not been concluded." Because Gamboa could not find a buyer for the cargo, Puga and Gamboa orally agreed to the new payment term at the original price.

Sen Mar then sent Tiger a telex in which it attempted to confirm the alleged contract and in which it also told Tiger that it had withdrawn cargo from the market in reliance on the agreement. At the time Sen Mar sent this telex, the price of crude oil per barrel had dropped more than one dollar. By July 24, the price of crude oil had again declined. On July 24, Tiger sent Sen Mar a telex that stated "with reference to your telex . . . we hereby reemphasize that no cargo of crude oil has been concluded with Sen Mar Inc. No confirmation or reconfirmation exists at all between Tiger Petroleum Corp N.V. and Sen Mar Inc." On July 29, Sen Mar informed Tiger by telex that if Tiger did not receive a letter of credit by the next day, Sen Mar would sell the cargo and hold Tiger liable for losses.

When it failed to receive the letter of credit on July 30, Sen Mar sold the cargo on the market at a price per barrel that was thirty cents less than the price Tiger had allegedly agreed to pay. As a result of incurring these damages, Sen Mar informed Tiger of its intention to submit its claim to arbitration. Tiger replied that no contract existed between Sen Mar and Tiger and it therefore refused to submit to arbitration. After one more attempt to elicit a reply from Tiger to its arbitration demand, Sen Mar filed a petition with this Court to compel arbitration and appoint an arbitrator.

       The Court Will Treat Respondent's Motion as One for
                        Summary Judgment

Federal Rule of Civil Procedure 12(b) permits a court to convert a motion to dismiss under Rule 12(b)(6) to a motion for summary judgment under Rule 56 if the parties present and the court considers matters outside the pleadings. The Rule further requires that the court give the parties an opportunity to present all material pertinent to the Rule 56 motion. See Fed.R.Civ.P. 12(b). Both Sen Mar and Tiger have submitted affidavits and exhibits in support and opposition to Tiger's motion to dismiss. Moreover, the parties' memoranda of law refer extensively to these materials. As a result, this Court will treat Tiger's motion as one for summary judgment under Rule 56. See Fonte v. Board of Managers of Continental Towers Condominium, 848 F.2d 24, 25 (2d Cir. 1988) (court must convert 12(b)(6) motion to one for summary judgment where it considers affidavits and factual allegations contained in memoranda of law).

Moreover, the parties are not entitled to an opportunity to submit more materials. This Court has already considered the affidavits of Puga, Gamboa and the Presidents of both Sen Mar and Tiger. In addition, this Court has examined all relevant telexes and the parties' memoranda of law. The second circuit has stated that by virtue of the submission of such materials, the parties "should reasonably have recognized the possibility that the motion might be converted into one for summary judgment." In re G & A Books, Inc., 770 F.2d 288, 295 (2d Cir. 1985), cert. denied sub nom., M.J.M. Exhibitors, Inc. v. Stern, 475 U.S. 1015, 106 S.Ct. 1195, 89 L.Ed.2d 310 (1986). The court added that a "party cannot complain of lack of a reasonable opportunity to present all material relevant to a motion for summary judgment when both parties have filed exhibits, affidavits" and memoranda of law concerning the motion. Id.

"It is well settled that a court should grant a motion for summary judgment only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact." Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 (2d Cir. 1990); see United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). The Supreme Court has stated that courts determine whether an issue is genuine and material for purposes of summary judgment by assessing "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986) ("court may grant summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.").

   I. The Arbitration Clause Does Not Satisfy the Convention's

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