Ark did not give KMK a clue as to the provisions of the arbitration clause, if any, that Samsun would subsequently insert in the charter party. The venue of arbitration was of foreseeable interest to KMK which, given the present political climate, expresses an understandable preference not to arbitrate disputes in the United States.
The cases cited by Samsun to bind KMK to New York arbitration under the "sub details" rubric all differ from the case at bar in that the exchange of telexes resulting in a fixture specifically identified the charter party form or arbitration clause which became a part of the contract. That is true of Great Circle Lines, Ltd. v. Matheson & Co., Ltd., supra, upon which Samsun places primary reliance. The telexed fixture recapitulation in that case contained the phrase "subject details NYPE46." 681 F.2d at 123. That was a reference to the New York Produce Exchange 1946 charter party form, a well-known industry document. In that circumstance, the Second Circuit said that "the legal effect of adopting NYPE46 is inescapable -- it provided the details for the charter, subject to change only by further negotiation." That was sufficient to bind the parties to arbitration in New York, as provided in the New York Produce Exchange form because, as the court of appeals observed: "One of the main terms of the fixture was adoption of NYPE46; a printed form containing a multitude of details, with arbitration as the mechanism stipulated by the parties for resolving differences as to the contract's meaning." Id. at 126.
In Interocean Shipping Company v. National Shipping & Trading Corporation, 523 F.2d 527 (2d Cir. 1975), the telexes resulting in a fixture provided that "the Mobiltime form charter 'sub details' would be used excluding certain clauses." 523 F.2d at 531 (footnote omitted). The Mobiltime form referred to contained an arbitration clause which the court held bound the parties.
In Keystone Shipping Co. v. Compagnie Marocaine de Navigation, 1990 U.S. Dist. LEXIS 8975, 1990 WL 104029, 1990 AMC 2971 (S.D.N.Y.), the fixture telex, after setting forth the essential terms of the voyage, provided that the voyage be governed "per terms and conditions of the North American Grain charter part (pro forma 1982)." In his order compelling arbitration Judge Leisure reasoned: "In essence, the fixture is an embodiment of the Norgrain form. As this form has been in existence since 1982, the Court must conclude that Comanav was aware or should have been aware of the arbitration provision contained therein." 1990 U.S. Dist. LEXIS 8975, 1990 WL 104029 at *4.
In Maritime Ventures International, Inc. v. Caribbean Trading & Fidelity, Ltd., 689 F. Supp. 1340, 1345-46 (S.D.N.Y. 1988), the broker's telexes contained a specific reference to arbitration in New York.
In Pollux Marine Agencies, Inc. v. Louis Dreyfus Corp., 455 F. Supp. 211, 213-14 (S.D.N.Y. 1978), the fixture telex said: "We confirm having fixed the foll with you today subject details of Eldece Time." One of the pro forma details of the Eldece time charter was a New York arbitration clause, to which the parties were held.
These cases stand for the proposition that a reference in the fixture telexes to arbitration in New York, or at the very least a reference to a familiar charter party form which provides for arbitration in New York, binds the parties to arbitrate any disputes in New York, even though the formal charter party is not executed until later (or not at all). It is possible to say, in each of these cases, that before the brokers' communications gave rise to a binding contract, the party resisting arbitration was placed on notice, one way or the other, that disputes would be arbitrated. I read these cases as requiring such notice before a party can fairly be regarded as having agreed to New York arbitration. If I am correct in that, then Samsun cannot show an agreement by KMK to New York arbitration.
Samsun cites no case, and I have found none, holding that a reference in a fixture telex to "otherwise as per owners' charter party"
is sufficiently precise to give a charterer notice of, and accordingly bind it to, whatever arbitration clause the ship owner may subsequently insert in the typed charter party.
No court has apparently held that this phrase cannot have that effect. This may be a case of first impression. However, the rule is clear enough that a party cannot be compelled to arbitrate at a particular place and in a particular fashion unless it has agreed to do so; and I do not think that the phrase in the fixture telex upon which Samsun relies is sufficient for the purpose.
Samsun argues in the alternative that KMK is estopped from denying the existence of a New York arbitration clause. Primary reliance is placed upon Halcoussis Shipping Ltd. v. Gonzalez Corp., 1977 AMC 1658 (S.D.N.Y. 1977) (not officially reported), which Samsun says arose "in not unsimilar circumstances." Supplemental Reply Brief at 11. In fact, the circumstances are materially dissimilar.
The vessel in Halcoussis was fixed to carry a part cargo of liquid tallow from New Orleans to Algiers. Carriage of such cargoes are customarily covered by the VEGOIL pro forma charter party form, which contains a New York arbitration clause. A claim for demurrage having arisen, the shipowner petitioned to compel the charterer to arbitrate. Judge Motley found that following the custom of the ship brokerage business, the negotiations between the brokers were oral, "and were predicated upon a pro forma charter party -- in this case a VEGOIL pro forma." 1977 AMC at 1600. A broker's notes of the conversations "indicated that a VEGOIL pro forma would be the basis for the charter agreement." Id.
By inadvertence, the charterer's broker, in advising charterer of the fixture by telex dated May 21, 1976, did not include in the fixture terms a reference to the VEGOIL pro forma charter party. However, when on June 2, 1976 charterer's broker received from owner's broker an appropriately altered VEGOIL pro forma charter party for execution by the parties, charterer's broker passed that contract on to charterer on the same day. The charterer made no objection to its terms and conditions before the vessel arrived at the loading port of New Orleans on June 9, 1976 and began her performance under the charter.
In compelling the charterer to arbitrate, the first point of decision in Judge Motley's opinion focused upon the oral negotiations between the brokers. She wrote:
In the tallow trade, some form of VEGOIL pro forma form is usually employed. The oral agreement reached between brokers in the trade constitutes a binding agreement with the writing subsequently exchanged acting as confirmations. The oral agreement is understood to incorporate the terms of a form charter party, and both Peralta and Halcoussis' broker operated under this assumption in this case.
1977 AMC at 1663.
The court also found it significant that the charterer made no objection "to use of the VEGOIL form and inclusion of the arbitration clause until well after the demurrage dispute arose" at the discharge port in Algiers. Id. 1664. This is the language upon which Samsun relies. But it appears in the context of the case where a particular charter party form was agreed upon by the brokers during their negotiations as the point of reference. Furthermore, the evidence showed that only two months before, the charterer, contracting to ship tallow from New Orleans to Algiers, signed a VEGOIL pro forma containing the same arbitration clause. Id. at 1659. The charterer thus had specific knowledge of the form which the brokers agreed would control the charter party in suit.
The facts in the case at bar are quite different. As noted, neither the brokers' negotiations nor the fixture telex contained any reference to a well-known and familiar pro forma charter party. In that regard, Halcoussis differs from the instant case as do the cases discussed supra. As for the estoppel point, the charterer in Halcoussis had the charter party containing the arbitration clause in hand a week before the vessel arrived at the loading port. In the case at bar, Nimble faxed to Seas Ark a completed charter party on March 17, 1995, eight days after lay time commenced and six days after loading began. But Nimble then instructed KMK through Seas Ark not to sign that charter party, and did not send the revised contract until April 5, by which time for all that appears the vessel had sailed from the loading port. These facts are materially different from those in Halcoussis. They do not entitle Samsun to invoke the equitable doctrine of estoppel.
Because I conclude that Samsun has not and cannot prove that KMK agreed to arbitrate these charter party disputes in New York, I deny Samsun's petition to compel arbitration.
By that holding, I exhaust my limited jurisdiction under the Federal Arbitration Act, and make no other order in the case.
The Clerk of the Court is directed to dismiss the petition with prejudice.
DATED: New York, New York
May 29, 1996
CHARLES S. HAIGHT, JR.
UNITED STATES SENIOR DISTRICT JUDGE