The opinion of the court was delivered by: Berman, District Judge.
This action arises from the alleged nondelivery, shortage, and
loss of 1511 cartons of frozen shrimp. (Mazaroli Aff. ¶ 2; Smith
Aff. ¶ 2.) Plaintiffs Eastern Fish Co. ("Eastern Fish") and
Insurance Company of North America (collectively, "Plaintiffs")
contend that the frozen seafood was lost on or about April 21,
1998 en route to the port of Guayaquil, Ecuador and now seek
$140,000.00 in damages. Plaintiffs further contend that if a bill
of lading had been issued, this Court would have been designated
therein as having exclusive jurisdiction over this dispute.*fn1
Defendants South Pacific Shipping Co., Ltd. d/b/a Ecuadorian
Line, Inc. ("SPS/ELI"), South Pacific Shipping Co., Ltd. ("South
Pacific"), and Ecuadorian Line, Inc. ("Ecuadorian Line")
(collectively, "Defendants") contend that pursuant to Paragraph
15 of (Appendix 1
to) the Service Contract, dated March 1, 1997, between Eastern
Fish and SPS/ELI ("Service Contract") — a document which was in
fact executed — a controversy or claim arising out of or relating
to the Service Contract, such (according to Defendants) as the
dispute at bar, shall be referred to arbitration. For the
reasons set forth below, Defendants' motion to dismiss these
proceedings is granted.
On March 1, 1997, Defendant SPS/ELI entered into the Service
Contract with Eastern Fish providing for the carriage of ten
containers of frozen shrimp (and fish) from Ecuador Base Ports to
North Atlantic and Florida Base Ports.*fn2 (Halaszynski Aff. ¶
2.) The usual and customary practice was for each shipment to be
carried from the supplier's premises to the port of loading by a
subcontracting trucking company, hired and paid by Defendant
Ecuadorian Line. (Bloom Dec. ¶ 3.) The cargo would then be loaded
on a ship for transport by sea. Nine of the ten containers to be
delivered under the Service Contract arrived in New York without
incident. (Bloom Dec. ¶ 5.)
On April 21, 1998, at the premises of Langostino S.A., a shrimp
exporter in Machala, Ecuador, the cargo of shrimp in question was
loaded on behalf of Eastern Fish in Container NPDU400595-8.
(Bloom Dec. ¶ 5; Halaszynski Aff. ¶ 4.) While the Container was
being transported by the trucking company from Langostino's
premises to the port of Guayaquil, Ecuador, it was hijacked by
ten armed and masked men. (Bloom Dec. ¶ 5; Smith Aff. ¶ 3.) A
bill of lading was never issued for this Container. (Bloom Dec.
¶ 6.) On April 19, 1999, Plaintiffs filed a complaint for damages
(based upon contract and tort claims) against Defendants as
common carriers and/or bailees. (Comp. ¶ 9.) On November 2, 1999,
Defendants moved to dismiss or stay these proceedings pending
arbitration arguing that arbitration (rather than litigation)
under the Service Contract was the appropriate means of dispute
Arbitration as a means of resolving disputes is well
established and broadly favored. See AT & T Technologies, Inc.
v. Communications Workers of America, 475 U.S. 643, 650, 106
S.Ct. 1415, 89 L.Ed.2d 648 (1986) ("It has been established that
where the contract contains an arbitration clause, there is a
presumption of arbitrability . . ."); David L. Threlkeld & Co.
v. Metallgesellschaft Ltd., 923 F.2d 245, 248 (2d Cir.), cert.
dismissed, 501 U.S. 1267, 112 S.Ct. 17, 115 L.Ed.2d 1094 (1991)
("Federal policy strongly favors arbitration as an alternative
dispute resolution process"). A court, in deciding whether a stay
should be granted, must first determine whether the parties
agreed to arbitrate and then determine whether the scope of the
agreement encompasses the claim(s) being asserted. See United
States Fire Ins. Co. v. National Gypsum Co., 101 F.3d 813, 816
(2d Cir. 1996) (citing Progressive Casualty Ins. Co. v. C.A.
Nacional De Venezuela, 991 F.2d 42, 45 (2d Cir. 1993));
Genesco Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 844 (2d
Cir. 1987); Netherlands Curacao Co. N.V. v. Kenton Corp.,
366 F. Supp. 744, 746 (S.D.N.Y. 1973) (citing Prima Paint Corp. v.
Flood & Conklin Mfg. Co., 388 U.S. 395, 404, 87 S.Ct. 1801, 18
L.Ed.2d 1270 (1967)).
Agreement to Arbitrate: Service Contract
"Under general contract principles, a party is bound by the
provisions of a contract that he signs unless he can show special
circumstances that would relieve him of such an obligation."
Genesco, 815 F.2d at 845; see also Coleman v. Prudential Bache
Securities, Inc., 802 F.2d 1350, 1352 (11th Cir. 1986) (per
curiam); N & D Fashions, Inc. v. DHJ Industries, Inc.,
548 F.2d 722, 727 (8th Cir. 1976). Eastern Fish entered into the Service
Contract*fn4, which, as noted, contained the following
(arbitration) clause in Appendix 1, Paragraph 15:
"The parties hereto agree that any controversy or
claim arising out of or relating to this Service
Contract or the breach thereof, shall be referred to
and finally resolved by arbitration in the City of
New York, New York, in accordance with the MARITIME
ARBITRATION RULES of the SOCIETY OF MARITIME
ARBITRATORS . . ." (Halaszynski Aff. Ex. 1 at 4.)
The question is not "whether there was subjective agreement as to
each clause in the contract, but on whether there was an
objective agreement with respect to the entire contract."
Genesco, 815 F.2d at 846; see also N & D Fashions, 548 F.2d
at 727. By entering the Service Contract, Eastern Fish clearly
agreed to arbitrate.
Plaintiffs contend that the Service Contract is not a contract
of carriage because, among other things, it relates to volume
commitments, service commitments, and rates. (Bloom Dec. ¶ 7.)
Thus, Plaintiffs argue that the terms and conditions of the
Service Contract do not apply to the lost (shrimp) cargo. (Bloom
Dec. ¶ 7.) Defendants assert that the Service ...