arbitration clause, which unlike the Clipper Gas-PPG agreement, expressly "required only arbitration between the parties to the agreement." Weyerhaeuser Co. v. Western Seas Shipping Co., 743 F.2d at 637 (emphasis added). The Clipper Gas-Georgia Gulf and Clipper Gas-PPG arbitration clauses are not limited to disputes arising solely between the owner and charterer, but rather, call for arbitration of "any and all differences and disputes of whatsoever nature arising out of this Charter." See Tanker Voyage Charter Party, annexed as Exhibit "1" to Verified Petition of P/R Clipper Gas, dated March 20, 1992, at P 24 (emphasis added). Prior decisions of this Court note that arbitration clauses which provide for arbitration of "all" disputes evidence an intent by the parties to consolidate related arbitrations. See Ore & Chemical Corp. v. Stinnes Interoil, Inc., 606 F. Supp. at 1515; (distinguishing between arbitration agreements calling for arbitration of all disputes and those requiring arbitration between the parties); Reefer Express Lines Pty., Ltd. v. Mediteranska Plovidba, 1987 U.S. Dist. LEXIS 4337, 1987 WL 11685, at *3 (S.D.N.Y. 1987) (same) ; see also Compania Espanola de Petroleos, S.A. v. Nereus Shipping, S.A., 527 F.2d at 973. As the parties in the matter at hand agreed upon language requiring arbitration of all disputes, not solely those arising between Clipper Gas and PPG, consolidation is implicit
Third, contrary to Judge Edelstein's opinion in Ore & Chemical Corp. v. Stinnes Interoil, Inc., 606 F. Supp. 1510 (S.D.N.Y. 1985), the Supreme Court's decision in Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 84 L. Ed. 2d 158, 105 S. Ct. 1238 (1985), did not overrule Nereus. In Byrd, an investor brought suit in federal court against his broker, alleging federal securities law violations and pendent state law claims. The broker, assuming the federal securities act claims non-arbitrable, moved to compel arbitration, pursuant to the customer agreement, of only the pendent state law claims. The district court denied the motion, and the Ninth Circuit affirmed. See Byrd v. Dean Witter Reynolds, Inc., 726 F.2d 552, 553 (9th Cir. 1984). The Supreme Court reversed, holding that where a valid agreement to arbitrate exists, a district court could not deny arbitration of the pendent state claims in favor of trying all claims together in federal court. Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. at 217. Even though the simultaneous arbitration of the pendent state claims and litigation of the federal securities violations in federal court might lead to inconsistent results and needless duplication of resources, the Supreme Court held that as "the preeminent concern of Congress in passing the [Arbitration] Act was to enforce private agreements into which parties had entered, . . . we [will] rigorously enforce agreements to arbitrate, even if the result is 'piecemeal' litigation. . . ." Id. at 221.
The Supreme Court did not address, however, whether a district court has the power to consolidate arbitration of two related proceedings. Sociedad Anonima de Navegacion Petrolera v. CIA. de Petroleos de Chile S.A., 634 F. Supp. at 808. Rather, the Supreme Court, relying upon what it found to be Congress' intent of overcoming judicial reluctance to order arbitration, compelled arbitration of claims when a motion to compel arbitration was pending. Byrd, 470 U.S. at 219. Thus, Byrd did not overrule Nereus and provides no contrary precedent.
Moreover, Judge Edelstein's prediction in Ore & Chemical Corp. v. Stinnes Interoil, Inc., 606 F. Supp. 1510, 1512 (S.D.N.Y. 1985), that the Second Circuit would reverse its opinion in Nereus in light of Weyerhaeuser and Byrd has not been born out. Relying on Byrd for the proposition that private arbitration agreements must be enforced as written, regardless of any consequent inefficiency, Judge Edelstein denied a petition to compel consolidated arbitration. See Ore & Chemical Corp. v. Stinnes Interoil, Inc., 606 F. Supp. at 1511. In reaching his decision, the Judge opined that "if the Court of Appeals for the Second Circuit were to reconsider the issue, it would overrule Nereus, and hold that a district court does not have the power under 9 U.S.C. § 4 to compel consolidated arbitration, where the parties did not provide for consolidated arbitration in the arbitration agreement." Id. at 1512-1513. Contrary to Judge Edelstein's opinion, however, the Second Circuit has not addressed the issue since Nereus, nor has a decision of the Circuit indicated that the vitality of Nereus is questionable. Furthermore, no other court in this district has reached the same conclusion as Judge Edelstein.
See Elmarina, Inc. v. Comexas, N.V., 679 F. Supp. at 391; Sociedad Anonima deNavegacion Petrolera v. CIA. de Petroleos de Chile S.A., 634 F. Supp. at 809; Shoyo Shipping Co., Ltd. v. Shipmair, B.V., 86 Civ. 2148, 1986 WL 11607, at *2 (S.D.N.Y. May 7, 1986). Thus, despite Judge Edelstein's arguments to the contrary, this Court is bound to abide by the overwhelming weight of authority in this circuit and follow Nereus.
Having concluded that this Ccurt has the power to compel consolidated arbitration, the Court must determine whether it should exercise this discretionary power. Consolidation is only proper in certain circumstances, namely where there are common questions of law or fact and a possibility of conflicting awards or inconsistent results. Compania Espanola de Petroleos, S.A. v. Nereus Shipping, S.A., 527 F.2d at 974; Rio Energy Int'l, Inc. v. Hilton Oil Transport, 776 F. Supp. at 122; Sociedad Anonima de Navegacion Petrolera v. CIA. de Petroleos de Chile S.A., 634 F. Supp at 809. To defeat a motion for consolidation, the nonnoving party must show prejudice that "is sufficiently substantial to outweigh the advantages of resolving the dispute in a consolidated proceeding." Sociedad Anonima de Navegacion Petrolera v. CIA. de Petroleos de Chile S.A., 634 F. Supp. at 809 (quoting Insco Lines, Ltd. v. Cypromar Navigation Co., 1975 A.M.C. 2233, 2235 (S.D.N.Y. 1975)). The mere desire to have one's disputes heard separately is not sufficient. Id.
In the instant matter, consolidation is appropriate. There are common questions of law and fact in the two arbitrations. Clipper Gas seeks to arbitrate the dispute regarding the loading of the vinyl chloride monomer, the condition of the cargo upon loading, and the alleged contamination at the cargo. As the PPG parcel and the Georgia Gulf parcel were commingled, petitioner alleges that any arbitration with Georgia Gulf will involve many of the same facts, the same witnesses, and the same issues as the arbitration involving PPG. This Court agrees that a principal issue of both proceedings is the question of who is responsibile for the alleged contamination. Thus, numerous questions of fact and law are identical in both disputes.
Further, as Clipper Gas maintains, consolidation will not only speed the resolution of these claims, but also reduce the possibility of inconsistent awards. Georgia Gulf has asserted a counterclaim against Clipper Gas to recover damages for the contamination of the cargo. Clipper Gas has denied liability and asserts that PPG or Georgia Gulf is at fault. In separate proceedings, the arbitrators in she Clipper Gas-Georgia Gulf arbitration would not be bound by the decision of the arbitrators in the Clipper Gas-PPG arbitraticn. Thus, without consolidation, PPG may be found liable for the contaminated cargo in the Clipper Gas-Georgia Gulf arbitration, while the Clipper Gas-PPG arbitration finds Georgia Gulf at fault.
In addition, PPG has failed to convince the Court that substantial prejudice would result if the arbitrations were consolidated. PPG argues that a consolidation of proceedings at this stage would require dismantling of the existing panel, and "starting all over." PPG Opp. at 24. Apparently, however, very little has occurred in the Clipper Gas-Georgia Gulf proceeding. See Verified Petition of P/R Clipper Gas, dated March 20, 1992, at P 14. Moreover, any possible prejudice resulting from the dismantling of the panel would be suffered by Clipper Gas and Georgia Gulf, not PPG. Regardless of whether the arbitrations at hand go forward as separate or consolidated proceedings, PPG must, in either event, chose an arbitrator for the panel. On balance, therefore, there seems to be no reason why all the parties should not be present at the same arbitration.
PPG also argues that Clipper Gas has either waived its right to demand consolidation or is estopped from making such a demand. This Court finds that PPG's additional arguments opposing consolidation are equally without merit. As stated previously, PPG has failed to demonstrate substantial prejudice, and therefore, cannot justify asserting a claim of estoppel. See Matsushita Elec. Corp. of America v. Gottlieb, 1991 U.S. Dist. LEXIS 10511, 1991 WL 152615, at *9 (S.D.N.Y. 1991) ("the part claiming estoppel must not only rely on the words or conduct of the other party, but must also . . . suffer prejudice therefrom."). In addition, while this Court does not condone Clipper Gas's two year delay in bringing this motion for consolidation, delay, by itself, is not sufficient to find a waiver or deny the instant motion.
See Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983) (noting the strong federal presumption against waiver of arbitration rights); Sweater Bee by Banff, Ltd. v. Manhattan Indus., Inc., 754 F.2d 457, 463 (2d Cir.), cert. denied, 474 U.S. 819, 88 L. Ed. 2d 55, 106 S. Ct. 68 (1985) (delay in raising arbitration claim not considered a waiver).
Finally, this Court agrees with PPG's argument that the three-man panel appointed to resolve this dispute is not feasible in a consolidated proceeding. Although the parties are still to select an acceptable panel of arbitrators, this Court believes that a five-man arbitration panel for the three parties involved is appropriate. See Compania Espanola de Petroleos, S.A. v. Nereus Shipping S.A., 527 F.2d at 975 (ordering five arbitrators in consolidated proceeding); see also In re Czarnikow-Rionda Co., Inc., 512 F. Supp. at 1309-1310 (five-man panel ordered although the arbitral agreement provided for three arbitrators) Antco Shipping Co., Ltd. v. Sidermar, S.p.A., 417 F. Supp. 207, 219 (S.D.N.Y. 1976) (same). This Court is convinced that a five member panel will provide each party with its own representative, a provision which appears in the charter agreements, and will prevent any prejudice.
For the reasons stated above, the petition to compel a consolidated arbitration is granted. The parties are directed to select a panel as follows:
(1) Each of the three parties shall appoint an arbitrator within twenty (20) days of the filing of this Court's opinion. If any party shall fail to nominate its arbitrator within that time, the Court will appoint one.
(2) The three arbitrators appointed shall jointly appoint two additional arbitrators. The appointment of the two additional arbitrators must be done by unanimous consent. If such unanimous selection of the two additional arbitrators does not take place within twenty (20) days after the three original arbitrators are selected, they will be appointed by the Court.
SHIRLEY WOHL KRAM
UNITED STATES DISTRICT JUDGE
DATED: New York, New York
October 23, 1992