The opinion of the court was delivered by: Scheindlin, District Judge.
Petitioner Louis Dreyfus Negoce S.A. ("Dreyfus") moves this
Court, pursuant to the United States Arbitration Act,
9 U.S.C. § 1 et seq., and the Declaratory Judgment Act, 28 U.S.C. § 2201,
for an order: (1) declaring that the claim brought by respondent
Blystad Shipping & Trading Inc. ("Blystad") against Dreyfus is
not subject to arbitration in New York; (2) staying any further
proceedings in the pending New York arbitration; and (3)
enforcing a choice of law/choice of forum provision stipulating
that Blystad's claim must be brought in London. For the reasons
set forth below, Dreyfus' motion is denied.
On November 27, 1996, Blystad and Dreyfus entered into a tanker
voyage charter party (the "Charter"), providing for the carriage
of a shipment of crude degummed soyabean oil from the United
States to China. See Affidavit of Clifford A. Dahl, Assistant
Chartering Manager at Dreyfus ("Dahl Aff."), ¶ 2. Blystad was the
time charterer of a vessel known as the M.T. THORSFREDDY (the
"Vessel"), owned by Jahre Dahl Bergesen ("Bergesen"). See id.;
Affidavit of David Nourse, counsel for Dreyfus ("Nourse Aff."),
Ex. C. Dreyfus intended to sell the soyabean oil to Lief
Enterprise Pty Ltd. ("Lief"), which intended to sell it to Kaland
Limited ("Kaland"). See Nourse Aff., ¶¶ 2, 11.
The Charter provided that the Vessel would pick up the soyabean
oil at Brownsville, Texas, and New Orleans, Louisiana, and
discharge it at "One (1) safe berth each/One (1)/Two (2) safe
port(s) CHINA;" the Charter did not specify the discharge port in
China. See Dahl Aff., Ex. B, Cl. C. In December 1996, the
soyabean oil was loaded onto the Vessel at Brownsville and New
Orleans. See Dahl Aff., ¶¶ 8, 9; Nourse Aff., ¶ 4. Pursuant to
instructions received from Lief, tanker bills of lading providing
that the soyabean oil should be discharged at Qingdao, China,
were issued. See Nourse Aff., ¶ 4; Dahl Aff., ¶ 9, Exs. C, D.
On or about January 13, 1997, as the Vessel was approaching
China, Blystad advised that the Vessel was expected to arrive at
Qingdao on January 18, but that the original bills of lading had
not yet arrived. See Nourse Aff., ¶ 5; Dahl Aff., ¶ 12. Blystad
requested that Dreyfus arrange for a letter of indemnity from the
receivers of the soyabean oil, so that the Vessel might discharge
the soyabean oil on its arrival in Qingdao without waiting for
presentation of bills of lading. See id. Blystad provided
Dreyfus with a form letter of indemnity; Dreyfus forwarded this
form letter to Lief. See Nourse Aff., ¶ 5; Dahl Aff., ¶ 13.
[T]he Charterer warrants that the cargo shall be
discharged at the ports and berths specified in Part
I. Any change in loading or discharging ports or
berths shall be made only as the result of special
agreement in writing between Charterer and Owner, and
in such case, Charterer shall assume all cost
incident to such change, including the value of the
vessel's time if the voyage is prolonged thereby.
Dahl Aff., Ex. B, Cl. 6(c). Dreyfus relayed Kaland's request to
Blystad and indicated that letters of indemnity regarding the
change of destination and the discharge of cargo without the
presentation of the original bills of lading would be issued by
both Lief and Dreyfus. See Nourse Aff., ¶ 6; Dahl Aff., ¶ 13.
Blystad advised Dreyfus that the Vessel's expected arrival date
in Qin Huang Dao was January 18 and requested that the letters of
indemnity be forwarded. See Nourse Aff., ¶ 6; Dahl Aff., ¶ 13.
On or about January 20, 1997, Dreyfus received two letters of
indemnity from Lief. See Nourse Aff., ¶ 7; Dahl Aff., ¶ 16.
These letters of indemnity were typed on Lief's letterhead,
signed on its behalf, and dated January 17 and 20, 1997; they
were in the form provided by Blystad and were addressed to
Blystad, as "owners," and Dreyfus, as "charterers." See Nourse
Aff., ¶ 7; Dahl Aff., ¶ 16, Ex. K. Dreyfus endorsed both letters
of indemnity by adding its name, address, and signature on the
second page of each letter and then superimposing a copy of the
text of the letters, thus endorsed, upon Dreyfus' letterhead.
See Nourse Aff., ¶ 8; Dahl Aff., ¶ 17, Ex. L. Dreyfus then
forwarded these endorsed letters of indemnity to Blystad, which
confirmed that the letters were in order and that the Vessel had
been instructed to discharge the soyabean oil without delay.
See Nourse Aff., ¶ 8; Dahl Aff., ¶ 18.
The letters of indemnity state, in relevant part:
In consideration of your complying with our above
request we hereby agree as follows:
1. To indemnify you, your servants and agents and to
hold all of you harmless in respect of any liability,
loss or damage of whatsoever nature which you may
sustain by reason of delivering the goods to China
Ocean Shipping Agency, Qin Huang Dao in accordance
with our request.
2. In the event of any proceedings being commenced
against you or any of your servants or agents in
connection with the delivery of the goods as
aforesaid, to provide you or them from time to time
with sufficient funds to defend the same.
3. If the vessel or any other vessel or property
belonging to you should be arrested or detained or if
the arrest or detention thereof should be threatened,
[in connection with the delivery of the goods as
aforesaid,] to provide such bail or other security as
may be required to prevent such arrest or detention
or to secure the release of such vessel or property
and to indemnify you in respect of any loss, damage
or expenses caused by such arrest or detention
whether or not the same may be justified.
4. As soon as all original Bills of Lading for the
above goods shall have arrived and/or come into our
possession, to produce and deliver the same to you
[or to your agents at Port of Discharge] whereupon
our liability hereunder shall cease [immediately].
5. The liability of each and every person under this
indemnity shall be joint and several and shall not be
conditional upon your proceeding first against any
person, whether or not such person is party to, or
liable under, this indemnity.
Dahl Aff., Exs. K, L.*fn1
After discharging the soyabean oil at Qin Huang Dao, the Vessel
was arrested by order of the Tianjin Maritime Court. See Nourse
Aff., ¶ 9. The Vessel remained under arrest for about three
months. See id. Following its release, the Vessel discharged a
second parcel of soyabean oil at Shantou, China, and then left
China. See id.
On March 5, 1997, Blystad commenced an action against Dreyfus
and Lief in the High Court of Justice, Queens Bench Division,
Commercial Court, in London (the "London High Court"). See
Nourse Aff., ¶ 10; Unsworn Declaration Under Penalty of Perjury
of Stephen Kirkpatrick, counsel for Dreyfus in London