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November 12, 1991


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



In March of 1987, the Owner and Charterer entered into a Time Charter Party contract for the vessel M/V LEONIDAS GLORY, at $1,950 per day (the "Charter Party"). The Charter Party called for the vessel to load granite blocks at Mangalore, India, during April and May, 1987. These granite blocks were to be discharged at Santander, Spain, St. Malo, France and Antwerp, Belgium. On route to Santander, the vessel encountered heavy weather which the Owner claimed caused delays in arriving at the designated ports of discharge.

Consequently, the Charterer claimed damages for underperformance in the amount of $39,622.00, based upon a delay of 11.34 days as compared to a routine voyage. The Charterer asserted its claim for underperformance in the Court of Commerce in Antwerp, under Belgian law. At the Charterer's request, the Court of Commerce issued a Detention Order which prevented the LEONIDAS GLORY from sailing from the court's jurisdiction, and appointed a neutral Nautical Surveyor to investigate the vessel's records in order to determine and report the causes of the alleged delay.

The Charterer informed the Owner that in lieu of arresting the vessel it would accept a letter of guarantee in the amount of $45,000, as security for any liability due to the vessel's underperformance. Although the Owner had made arrangements to drydock the vessel for a Class Survey in a Netherlands shipyard the day after discharge, May 27, 1987, and an arrest would prevent the Owner from going on drydock as scheduled, the Owner refused to post the security. As a result, the Charterer applied to the Belgian Court and obtained an order of arrest for the LEONIDAS GLORY. Under Belgian law,*fn1 the Owner was permitted to contest the arrest but failed to do so, even though it was represented in Antwerp.*fn2

The vessel was subsequently arrested on May 26, 1987, after completion of discharge at Antwerp. After the arrest, the Owner posted adequate security, the arrest was lifted and the vessel was allowed to sail from Antwerp. However, due to the arrest the vessel was delayed in Antwerp for two days.

During the vessel's detention, the Nautical Surveyor determined that the LEONIDAS GLORY had indeed underperformed for a total of 118 hours, or 4 days and 22 hours (as opposed to the 11.34 days claimed by the Charterer) on the voyage from Mangalore to Antwerp. The Surveyor also found that the Charterer should be compensated in the amount of $17,709.89.

After this determination, the Owner invoked the arbitration clause of the Charter Party contract,*fn3 and sought arbitration of the various claims and cross-claims at New York. The claims and cross-claims were as follows: (1) The Charterer claimed the $17,708.89 to which the Nautical Surveyor determined it was entitled as a result of underperformance; (2) The Owner claimed damages for unpaid freight, repairs necessitated by stevedores, fees and expenses incurred at Antwerp due to the arrest, expenses incurred due to the postponement of scheduled drydocking while the vessel was under arrest at Antwerp, including the costs of arranging drydocking in Greece, the cost of the extra drydocking, the costs of the arbitration proceeding and the cost of the letter of guarantee posted in Antwerp. Pre-hearing submissions were presented to a Panel of three arbitrators (the "Panel"), which was formed in accordance with Clause 17, and a hearing was held on March 29, 1990.

On April 15, 1991, the Panel issued a Decision and Award in which it denied the Charterer's claims. Contrary to the Nautical Surveyor, the Panel concluded that the weather conditions during the voyage and the Captain's concern for safety were serious enough to justify the Captain's decision to seek shelter at Crete and reduce the speed of the vessel. Thus, the delay was justified, and the Charterer was not entitled to recover for underperformance. The Panel further concluded that the arrest of the vessel was

  wrongful and unjustified under the circumstances
  because Charterers could have started their
  investigation of alleged speed loss at the first
  two discharge ports instead of waiting till [sic]
  two hours before completion of discharge. Owners
  would then have had plenty of time to grant
  Charterers Letter of Undertaking without the
  vessel being delayed two days.

Decision and Award, Exhibit "A" to DeOrchis Aff., at 15.

Based upon these findings, the Panel awarded the Owner $75,068.28. According to the Charterer, $49,013 of this award was intended to reimburse the Owner for expenses relating to what the arbitrators deemed the "wrongful and unjustified" arrest.*fn4 The Charterer moves to vacate only this portion of the award.*fn5 The Charterer alleges that in awarding the Owner $49,013 for expenses incurred in connection with the Belgian arrest, the "arbitrators exceeded their powers, or so imperfectly ...

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