In determining whether transfer is warranted "for the
convenience of the parties and witnesses [and] in the interest of
justice" under § 1404(a), courts generally consider several
factors. The factors to be considered in the instant case include
(1) the convenience of witnesses, (2) the convenience of the
parties, (3) the location of relevant documents and the relative
ease of access to sources of proof, (4) the locus of operative
facts, (5) the availability of process to compel the attendance
of unwilling witnesses, (6) the relative means of the parties,
(7) the forum's familiarity with the governing law, (8) the
weight accorded the plaintiff's choice of forum, and (9) trial
efficiency and the interest of justice, based on the totality of
the circumstances. See Orb Factory, Ltd. v. Design Science Toys,
Ltd., 6 F. Supp.2d 203 (S.D.N.Y. 1998) (citing Wilshire, 976
F. Supp. at 181); see also Constitution Reinsurance Corp. v.
Stonewall Ins. Co., 872 F. Supp. 1247, 1250 (S.D.N.Y. 1995);
Cento Group, S.p.A v. OroAmerica, Inc., 822 F. Supp. 1058, 1060
The general rule in the Second Circuit is that "as a principle
of sound judicial administration, the first suit should have
priority, `absent the showing of balance of convenience in favor
of the second action.'" Capitol Records, Inc. v. Optical
Recording Corp., 810 F. Supp. 1350, 1353 (S.D.N.Y. 1992)
(quoting Remington Prods. Corp. v. American Aerovap, Inc.,
192 F.2d 872, 873 (2d Cir. 1951)). As this Court has held, however,
the first-filed doctrine "does not supersede the inquiry into the
balance of convenience required under § 1404." River Road Int'l,
L.P. v. Josephthal Lyon & Ross Inc., 871 F. Supp. 210, 214-15
(S.D.N.Y. 1995) (citing Rolls-Royce Motors, Inc. v. Charles
Schmitt & Co., 657 F. Supp. 1040, 1061 (S.D.N.Y. 1987)).
Special circumstances may warrant an exception to the
first-filed doctrine. See William Gluckin & Co. v. International
Playtex Corp., 407 F.2d 177, 178 (2d Cir. 1969). The Supreme
Court has endorsed this case-specific approach, and has held that
"[w]ise judicial administration, giving regard to conservation of
judicial resources and comprehensive disposition of litigation,
does not counsel rigid mechanical solution of such problems."
Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180,
183, 72 S.Ct. 219, 96 L.Ed. 200 (1952). Petitioners contend that
special circumstances dictate that this Court should hear their
motion to vacate or modify the arbitration awards. Specifically,
Petitioners assert that a transfer to Florida could abrogate
their right to move to vacate the arbitration awards.
There is, as Petitioners note, a split among the appellate
courts as to whether the venue provisions of sections 9, 10 and
11 of the FAA are exclusive or permissive.*fn1 The Sixth and
Ninth Circuits have held that the venue provisions are mandatory,
requiring that motions to confirm or vacate arbitration awards be
brought in the district where the award was made. See, e.g.,
Island Creek Coal Sales Co. v. Gainesville, 729 F.2d 1046 (6th
Cir. 1984); Sunshine Beauty Supplies, Inc. v. United States
District Court for the Central District of California,
872 F.2d 310 (9th Cir. 1989). A majority of the circuits, including the
Second Circuit, have held that venue is permissive. See, e.g.,
Motion Picture Laboratory Technicians Local 780 v. McGregor &
Werner, Inc., 804 F.2d 16 (2d Cir. 1986); Smiga v. Dean Witter
Reynolds, Inc., 766 F.2d 698 (2d Cir. 1985); Apex Plumbing
Supply, Inc. v. United States Supply Co., 142 F.3d 188 (4th
Cir.), cert. denied, ___ U.S. ___, 119 S.Ct. 178, 142 L.Ed.2d
145 (1998); Sutter Corp. v. P & P Indus., Inc., 125 F.3d 914
(5th Cir. 1997); In re VMS Securities Litigation, 21 F.3d 139
(7th Cir. 1994). Under this interpretation, an action to confirm
or vacate may be brought in the district in which the award was
made, but it is not required. Thus, "[o]nce a federal court has
subject matter jurisdiction over an action, it may confirm an
arbitration award even though it was not the district where the
award was made." Smiga, 766 F.2d at 706.*fn2
The Petitioners submit that the Eleventh Circuit has not yet
determined whether it will apply a permissive or an exclusive
interpretation to section 9, 10 and 11 of the FAA. Petitioners
cite Baltin v. Alaron Trading Corp., 128 F.3d 1466 (11th Cir.
1997), in support of their assertion that "the Eleventh Circuit
expressly left open the possibility that it might determine the
exclusive construction to be the correct construction."
(Petitioners' Brief at 4). Consequently, Petitioners urge that
they run the risk of being deprived of their remedies under the
FAA.*fn3 Even assuming that the issue of whether the venue
provision of sections 9 and 10 of the FAA are permissive or
exclusive will be presented to the Eleventh Circuit during the
pendency of the confirmation action in Florida, nothing in the
Baltin decision suggests that the Eleventh Circuit will adopt
an exclusive construction. The Eleventh Circuit in Baltin
stated only that because the district court did not have subject
matter jurisdiction, the issue of venue need not be reached.
See 128 F.3d at 1468 n. 4.
Petitioners further postulate that because Florida was formerly
part of the Fifth Circuit, and because the Fifth Circuit formerly
adopted an exclusive construction, see City of Naples v. Prepakt
Concrete Company, 490 F.2d 182 (5th Cir. 1974), the Eleventh
Circuit might follow suit. However, Petitioners do not, and
cannot state with any certainty that the Eleventh Circuit will
follow the Fifth Circuit. Moreover, if the Eleventh Circuit does
choose to adhere to the construction adopted by the Fifth
Circuit, it seems at least equally plausible that it would follow
the current state of the law in the Fifth Circuit which allows
for a permissive construction. See Sutter Corp. v. P & P Indus.,
Inc., 125 F.3d 914 (5th Cir. 1997). Finally, the only case cited
by the parties from the Southern District of Florida, Dombrowski
v. Swiftships, Inc., 864 F. Supp. 1242 (S.D.Fla. 1994), adopted a
permissive construction of the venue provisions of the FAA.
Petitioners' speculation as to what the law might become does not
constitute a special circumstance warranting an exception to the
According to Petitioners, Petrojam's choice to file in the
Southern District of Florida "gives off the unmistakable aroma of
forum shopping." (Petitioners' Brief at 11). Forum shopping by a
party in the first-filed action is included among the special
circumstances that have been held to warrant exception to the
first-filed rule. See Riviera Trading Corporation v. Oakley,
Inc., 944 F. Supp. 1150, 1158 (S.D.N.Y. 1996) (citing Rayco Mfg.
Co. v. Chicopee
Mfg. Corp., 148 F. Supp. 588 (S.D.N.Y. 1957)). "Forum shopping
occurs when a litigant selects a forum only with a slight
connection to the factual circumstances of his action, or where
forum shopping alone motivated his choice." Capitol Records,
Inc. v. Optical Recording Corporation, 810 F. Supp. 1350, 1353
(S.D.N.Y. 1992). Petitioners have not demonstrated that
Petrojam's filing was motivated solely or largely by forum
In addition to forum shopping, other "special circumstances"
that warrant exception to the first-filed rule include the
defendant's good faith attempts at settlement, judicial economy,
the minimal difference in time between the filing of the two
actions, and the lack of progress in either litigation. See
Columbia Pictures Industries, Inc. v. Schneider, 435 F. Supp. 742
(S.D.N.Y. 1977), aff'd 573 F.2d 1288 (2d Cir. 1978); Capitol
Records, 810 F. Supp. at 1354. While none of these factors
militate strongly against transfer, taken together, judicial
economy and the lack of progress in either litigation support the
exercise of the Court's discretion in rejecting the first-filed
rule. See Capitol Records, 810 F. Supp. at 1355; see also
Riviera Trading, 944 F. Supp. at 1159; River Road, 871 F. Supp.
at 214. It remains to analyze whether the convenience of the
parties and witnesses, and the administration of justice, will be
advanced by transfer to Florida.
Petitioners urge that the balance of convenience favors a New
York forum. Petitioners rely on Motion Picture Laboratory, 804
F.2d at 18, for the proposition that the place where the
arbitration was held is presumptively the convenient forum for
settling the dispute.*fn4 See also Matter of Arbitration
Between U.S. Offshore, Inc. and Seabulk Offshore, Ltd.,
753 F. Supp. 86, 89 (S.D.N.Y. 1990); Alexander Ins. Ltd., 1991 WL
150224 at *2; Fahnestock & Co. v. Waltman, 1990 WL 124354 at *6
(S.D.N.Y. Aug.23, 1990), aff'd, 935 F.2d 512 (2d Cir. 1991).
Motion Picture Laboratory is distinguishable from the instant
case. In Motion Picture Laboratory, the Second Circuit held
that the arbitrator's award was "made" in Florida for the
purposes of determining proper venue where the arbitrator's
decision had been signed, sealed, and mailed from New York, but
the site of the dispute was in the Middle District of Florida,
the parties operated out of Florida, the arbitrator's hearings
had been held in Florida, and the repercussions of the
arbitrator's decision would be felt exclusively in Florida. In
light of its earlier holding that section 9 of the FAA should be
read as permissive, the court stated that its finding that venue
was proper in the Middle District of Florida did "not necessarily
compel" the conclusion that venue was improper in the Southern
District of New York. 804 F.2d at 18. However, given that an
"essentially identical" action had been filed first in Florida,
the court applied the "well-settled first filed rule" and ordered
the dismissal of the New York action in favor of the Florida
action. Id. at 19.
The Motion Picture court found that the balance of
convenience weighed "overwhelmingly" in favor of Florida as the
parties had "absolutely no ties to the Southern District of New
York." Id. In the present action, neither New York nor Florida
have any connection with the underlying Agreements upon which the
awards at issue are based. Neither Petitioners nor Petrojam have
strong ties to the Southern District of New York — all
parties are non-New York corporations with their principal places
of business outside the State of New York. Moreover, this Court
has not heretofore assumed jurisdiction over nor otherwise had
any connection with this matter.
While the parties have, by agreeing to arbitrate here, "already
indicated that [the Southern District of New York] is mutually
convenient to settle their dispute," id. (quoting Central
Valley Typographical Union, No. 46 v. McClatchy Newspapers,
762 F.2d 741, 744 (9th Cir. 1985)) it does not appear that New York
is, in fact, more convenient than Florida. Arguably, the two fora
are equally convenient. It is however, Petrojam's burden to
demonstrate that the balance of convenience favors Florida.
Moreover, in light of Judge Moreno's decision to stay the
litigation in Florida, trial efficiency and the interest of
justice dictate that this action should remain in New York.
Accordingly, Petrojam's motion to transfer is denied.
II. The Arbitration Awards Will Be Confirmed
The FAA provides that a court "must grant . . . an order
[confirming an arbitration award] unless the award is vacated,
modified, or corrected as prescribed in sections 10 and 11 of
this title." 9 U.S.C. § 9; see Ottley v. Schwartzberg,
819 F.2d 373, 375 (2d Cir. 1987).
The grounds for vacating are narrow. Indeed, courts have
consistently held that "`arbitration awards are subject to very
limited review in order to avoid undermining the twin goals of
arbitration, namely, settling disputes efficiently and avoiding
long and expensive litigation.'" Dirussa v. Dean Witter
Reynolds, Inc., 121 F.3d 818, 821 (2d Cir. 1997) (citation
omitted). Moreover, the burden is on the party seeking to vacate
the award to establish one of the statutory grounds for relief.
See Willemijn Houdstermaatschappij, BV v. Standard Microsystems
Corp., 103 F.3d 9, 12 (2d Cir. 1997). Thus, the Second Circuit
"adhere[s] firmly to the proposition  . . . that an arbitration
award should be enforced, despite a court's disagreement with it
on the merits, if there is a `barely colorable justification for
the outcome reached.'" Landy Michaels Realty Corp. v. Local
32B-32J, 954 F.2d 794, 797 (2d Cir. 1992) (citation omitted).
Under Section 10 of the FAA, 9 U.S.C. § 10, there are four
possible grounds for vacating an arbitration award:
(1) Where the award was procured by corruption,
fraud, or undue means.
(2) Where there was evident partiality or corruption
in the arbitrators, or either of them.
(3) Where the arbitrators were guilty of misconduct
in refusing to postpone a hearing, upon sufficient
cause shown, or in refusing to hear evidence
pertinent and material to the controversy; or of any
other misbehavior by which the rights of any party
have been prejudiced.
(4) Where the arbitrators so exceeded their powers,
or so imperfectly executed them that a mutual, final,
and definite award upon the subject matter submitted
was not made. . . .
9 U.S.C. § 10(a).
Petitioners contend that the arbitrators engaged in misconduct
and exceeded their powers in violation of 9 U.S.C. § 10(a)(3)
and 10(a)(4) of the FAA. Alternatively, Petitioners allege that
the arbitrators made evident material miscalculations that
warrant modification of the awards. These contentions will be
1. Arbitrator Misconduct
Petitioners assert that the arbitrators were required to
conduct oral hearings and that their failure to do so constituted
"misconduct" under 9 U.S.C. § 10(a)(3). While hearings are
advisable in most arbitration proceedings, arbitrators are not
compelled to conduct oral hearings in every case. See Matter of
Arbitration Between InterCarbon Bermuda, 146 F.R.D. 64
(S.D.N.Y. 1993). As long as an arbitrator's choice to render a
decision based solely on documentary evidence is reasonable, and
does not render the proceeding "fundamentally unfair," the
arbitrator is acting within the liberal sphere of permissible
In InterCarbon, the Honorable Mary Johnson Lowe reviewed a
9 U.S.C. § 10(a)(3) "arbitrator misconduct" challenge to an
arbitration award. As in the instant case, the challenge was
based upon the fact that "the arbitrator decided certain
contractual issues without hearing live testimony . . ." 147
F.R.D. at 72. Specifically, Intercarbon claimed that the parties
orally expressed an intent inconsistent with written contractual
terms, and wished to present witnesses to the arbitrator to
testify to that effect. Judge Lowe determined that the record
supported Intercarbon's claim that it made "repeated pleas" for
oral hearings which the arbitrator apparently ignored, but
nevertheless upheld the award. Id. Analogizing to the procedure
for summary judgment under Fed. R.Civ.P. 56, Judge Lowe held that
the arbitrator's decision to render a determination based on
written submissions alone was reasonable. In its briefs,
Intercarbon submitted affidavits of proposed witnesses that were
cursory and ambiguous, and at most created "potential factual
issues." Id. at 73. As Intercarbon could have presented
credible evidence of a compelling factual dispute in its briefs
but failed to do so, Judge Lowe concluded that "hearings will not
be required just to see whether real issues surface." Id. at
Petitioners attempt to distinguish InterCarbon on the grounds
that the parties in InterCarbon were given notice by the
arbitrators that no hearings were required. Petitioners claim
that in the instant case "the lack of notice and secret closure
of the proceedings denied Petitioners the right to be heard . .
." (Petitioners' Reply Brief at 4). However, Petitioners were
given notice that a decision by the arbitrators based solely on
the papers submitted by the parties was a distinct possibility.
Petrojam's proposed procedures included a provision that made
oral hearings expendable at the option of the parties or the
arbitrators. Moreover, in light of the record, and in particular
the admonition to Petitioners by the arbitrators on April 10,
1998 that they were "prepared to act on the information received
to date," Petitioners claims of lack of notice and "secret"
proceedings is not credible.
Petitioners cite Cofinco, Inc. v. Bakrie & Bros., N.v.,
395 F. Supp. 613 (S.D.N.Y. 1975), for the proposition that arbitral
awards must be vacated where a party is deprived of an
opportunity to receive a full and fair hearing on the merits. In
Cofinco, however, the party challenging the arbitration award
was completely denied the opportunity to present any evidence,
oral or written, regarding the merits of his defense to a claim.
As the Court stated, "[t]he appeals panel made a final ruling on
questions that had been expressly postponed below, where it had
been recognized . . . that the basic right to present and test
evidence on issues of fact that had not been accorded. There was
never occasion to hear this evidence in the first instance." 395
F. Supp. at 615. Accordingly, the case fell within the "minuscule
proportion of awards vulnerable in court." Id. In the instant
case, the decision of the arbitrators was based on the documents
and written submissions of the parties, including Petitioners'
twenty-eight page, fifteen exhibit brief. The lack of oral
hearings does not amount to the "denial of fundamental fairness"
required to warrant vacating the award. Transit Cas. Co. v.
Trenwick Reins. Co., 659 F. Supp. 1346, 1354 (S.D.N.Y. 1987),
aff'd, 841 F.2d 1117 (2d Cir. 1988).
2. Imperfect Execution of Powers
A failure by the arbitrators to abide by the applicable rules
constitutes a violation of 9 U.S.C. § 10(a)(4). See 29 Moore's
Federal § 709.32[e] at 709-759 (3d ed.).
In the present action, the Arbitration Clause does not specify
the rules to be followed in the arbitration proceeding, and the
parties disagree as to which rules are applicable. Petitioners
claim that the relevant procedures are the formal rules specified
by the Maritime Arbitration Rules of the SMA which provide for
oral hearings unless the parties agree in writing to forego
hearings, and which provide that "[o]nce all submissions are
completed, the Chairman shall declare the proceedings closed."
Petrojam counters that it did not agree to abide by the entire
body of SMA rules, and that the relevant procedures were those
proposed by Petrojam and adopted by the arbitrators.
Petitioners have failed to meet their burden of establishing
that the parties agreed to incorporate the body of the SMA rules.
There are no documents in the record, either drafted by the
parties or the arbitrators, that refer to or cite specific SMA
rules. Moreover, courts reviewing an arbitration award must
construe all doubts in favor of upholding the award. See 29
Moore's Federal § 709.32[e] at 709-759. Accordingly,
Petitioners' 10(a)(4) motion is denied.
A. Evident Material Miscalculation
Petitioners contend that in the event that the arbitration
awards are not vacated, they must be modified to "eliminate
material miscalculations." (Petitioner's Brief at 19).
Specifically, Petitioners urge that the arbitration award dated
December 14, 1998 should be modified to show a total due Petrojam
from Griffin in the amount of $7,762.29, and the arbitration
award dated December 22, 1998 should be modified to show a total
due to Petrojam from OCL in the amount of $62,917.34.
A party challenging an arbitration award must show that no
proper basis for the award can be inferred from the facts of the
case. See Wall Street Associates L/P v. Becker Paribas, Inc.,
27 F.3d 845 (2d Cir. 1994). In the instant case, Petitioners'
allegations of miscalculation cannot be determined from the
factual record. Rather, the Court must essentially re-decide the
merits of the case by analyzing the arbitrators decisions and the
documents and briefs of the parties. Such a de novo review,
however, is inappropriate. See 29 Moore's Federal §
709.32[e] at 709-759 (award must be confirmed if the intent of
the panel is apparent or can be inferred from the facts of the
case; the court will not conduct a de novo review).
For the reasons stated above, 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.
It is so ordered.