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IN RE GRIFFIN INDUSTRIES

July 21, 1999

IN THE MATTER OF THE ARBITRATION BETWEEN GRIFFIN INDUSTRIES, INC. AND OCEAN LOGISTICS CORPORATION, AS CHARTERERS, PETITIONER, AND PETROJAM, LTD. AS OWNER OF THE M/V PETROJAM TRADER, RESPONDENT.


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

  OPINION

Petitioners Griffin Industries, Inc. ("Griffin") and Ocean Logistics Corp. ("OCL" and collectively, "Petitioners") have moved to vacate, or in the alternative, to modify the arbitration awards dated December 14, 1998 and December 22, 1998, pursuant to the Federal Arbitration Act, 9 U.S.C. § 10, 11 (the "FAA"). Respondent Petrojam, Ltd. ("Petrojam") has cross moved to: (1) confirm the arbitration awards pursuant to section 9 of the FAA, 9 U.S.C. § 9, and (2) to transfer this action to the United States District Court for the Southern District of Florida pursuant to 28 U.S.C. § 1404(a).

For the reasons set forth below, Petrojam's motion to transfer is denied, Petitioners' motion to vacate or modify the arbitration awards is denied, and Petrojam's motion to confirm the arbitration awards is granted.

The Parties

Griffin is a United States corporation with an office and principal place of business located at 4221 Alexandria Pike, Cold Spring, Kentucky 41076.

OCL is a United States corporation with an office and principal place of business located at Suite 301, 3636 South I-10 Service Road West, Metarie, Louisiana 70001.

Petrojam is a Jamaican corporation with an office and principal place of business located at 96 Marcus Garvey Drive, Kingston, Jamaica.

Background

During early 1997, Petitioners and Petrojam entered into two charter party agreements (the "Agreements"). The Agreements contained identical arbitration clauses which provided for arbitration of any disputes under the Agreements in the City of New York (the "Arbitration Clause").

Disputes arose between Petitioners and Petrojam and the parties agreed to resolve these disputes by consolidated arbitration in the City of New York. Petitioners appointed their arbitrator from the Roster of Members of the Society of Maritime Arbitrators, Inc. ("SMA"), Petrojam appointed its arbitrator from the SMA, and the two so selected chose a third arbitrator and procedural chairman from the SMA. Petrojam submitted its initial documentation to the arbitrators on or about September 25, 1997. After several delays, Petitioners submitted their initial submissions on January 23, 1998.

According to Petitioners, the parties contemplated and expected that the arbitrators would conduct a hearing or hearings "in as much as several issues could only be addressed through the oral testimony and cross-examination of witnesses." (Petition at ¶ 11). Petrojam asserts that with respect to oral hearings it had proposed that "[d]epending on the argument presented, it may be possible to rest on the written submissions, and avoid an oral hearing." (McAlpin Aff.Exh. A). Petrojam avers that since Petitioners did not submit any opposition to the procedures proposed by Petrojam, the arbitrators, noting no objection by Petitioners, adopted Petrojam's proposal on February 13, 1998.

On April 20, 1998, as Petitioners had failed to timely submit their response brief, Petrojam requested that the arbitrators rule based on the documents submitted to date. The arbitrators promptly sent a letter to Petitioners indicating that they were prepared to rule:

  We were expecting your response to the owner's
  argument by April 10, 1998. Kindly advise the panel
  of your status as we are prepared to act on the
  information received to date. Your prompt cooperation
  would be appreciated.

Petitioners subsequently submitted their reply brief. According to Petrojam, Petitioners made no mention of or request for oral hearings at this time.

On December 14 and 22, 1998, the arbitrators issued final arbitration awards awarding Petrojam damages against the Petitioners. On January 12, 1999, Petrojam filed a petition to confirm the arbitration awards in the United States District for the Southern District of Florida. See In the Matter of the Arbitration Between Petro Jamaica and Griffin Industries, Inc., and Ocean Logistics Corp., Civ-Moreno, 99-0066. On March 9, 1999, Petitioners appeared and filed an answer in the confirmation action in the Southern District of Florida.

On March 11, 1999, Petitioners filed the instant action to vacate or modify the arbitration awards in the Southern District of New York. On April 2, Petrojam filed its cross motion to confirm the awards, and filed its motion to transfer this action to the Southern District of Florida. Oral argument was heard on April 21, 1999, at which time the motions were deemed fully submitted.

By order dated June 30, 1999, the Honorable Federico A. Moreno granted Petitioners' motion to stay the action in the Southern District of Florida pending this ...


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