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CONTSHIP CONTAINERLINES, LTD. v. PPG INDUSTRIES

United States District Court, Southern District of New York


April 17, 2003

CONTSHIP CONTAINERLINES, LTD., PLAINTIFF,
v.
PPG INDUSTRIES, INC., DEFENDANT. CONTI ZWEITE CRISTALLO SCHIFFARHRTS GMBH & CO., KG MS CONTSHIP FRANCE, ET AL., PLAINTIFFS, V. PPG INDUSTRIES, INC., DEFENDANT.

The opinion of the court was delivered by: Henry Pitman, United States Magistrate Judge.

MEMORANDUM OPINION AND ORDER

Defendant, PPG Industries, Inc. ("PPG"), moves in these two consolidated actions to compel the production of certain documents exchanged between the plaintiffs in an arbitration involving the same incident that gives rise to this litigation. For the reasons set forth below, the motion is granted.

This is an action for damages arising out of a fire that occurred aboard the Contship France in the fall of 1997. Conti Zweite Cristallo Schiffarhrts GMBH & Co. ("Conti Zweite") is the owner of the Contship France; Contship Containerlines, Ltd. ("Contship") was the charterer of the vessel at the time of the fire.

In September 1997, PPG loaded four containers of calcium hypochlorite on board the Contship France in Norfolk, Virginia. PPG had manufactured the calcium hypochlorite, packaged it in drums and loaded the drums into the containers at its plant in West Virginia. These containers were then loaded onto the ship and placed in the lower cargo hold number 3. On October 15, 1997, while the ship was docked in Papeete, Tahiti, there was an explosion and fire in the lower cargo hold number 3. After the fire was extinguished, the ship was removed to Singapore for repairs. Conti Zweite and Contship claim here that PPG's calcium hypochlorite caused and/or contributed to the explosion and fire.

Conti Zweite and Contship filed claims against each other concerning their respective losses in an arbitration proceeding in London, and it is the documents generated in the course of that arbitration that give rise to the present motion. In response to PPG's request for all documents that comprise the record in that arbitration, Conti Zweite and Contship have produced here the documentary evidence that was submitted in the arbitration. They have not produced (1) expert submissions; (2) correspondence with the panel of arbitrators; (3) briefs and other submissions to the panel and (4) hearing transcripts. Conti Zweite and Contship claim that the four categories of materials that have been withheld are protected by the confidentiality that attached to the London arbitration proceedings and the work product doctrine. Neither argument is convincing.

The origin of the alleged confidentiality cited by Conti Zweite and Contship is not entirely clear. Neither has cited any contractual provision between them giving rise to an obligation of confidentiality, nor do they cite a regulation of any arbitral body as the source of confidentiality. Rather, they claim that, under English law, an obligation of confidentiality is implied in law as part of their agreement to arbitrate. Insurance Co. v. Lloyd's Syndicate, [1995] Vol. 1 Lloyd's Rep. 272, 274-75 (Q.B.); Hassneh Ins. Co. v. Mew, [1993] 2 Lloyd's L. Rep. 243, 246-47 (Q.B.).

Even if I assume that plaintiffs' contention as to the state of English law is correct, it does not preclude the disclosure sought here. The identical argument was rejected in Caringal v. Karteria Shipping, Ltd., No. Civ. A. 99-3159, 2001 WL 874705 (E.D. La. 2001):

The Court has considered Hassneh and its progeny, but finds nothing in this line of cases from Great Britain that undermines the principle that the Court may order disclosure when appropriate. Even if documents are confidential, a Court may order disclosure if (1) the documents are relevant and (2) "disclosure is necessary for disposing fairly of the cause or matter or for saving costs." Hassneh, 2 Lloyd's Rep. at 250. However, the Hassneh court did note that disclosure in the absence of a court order may place a party at considerable risk of being accused at a later date by other participants in the arbitration of improper disclosure. In light of this reality, the Court understands why Karteria has sought review of Magistrate Shushan's order prior to disclosing the relevant documents. However, the Court finds that Magistrate Shushan properly determined that the arbitration documents should be produced.
2001 WL 874705 at *1. See also United States v. Panhandle E. Corp., 118 F.R.D. 346, 349-51 (D. Del. 1988) (arbitration proceedings not confidential where there was no evidence that the parties had, in fact, agreed to hold the proceedings in confidence).

In this case, as in Caringal, the documents are undeniably relevant. They relate to the very incident that is in issue here. Their disclosure is also necessary for disposing of this matter fairly and inexpensively. The documents will add to the information available to the parties concerning the cause of the explosion and fire, effectively prevent plaintiffs from asserting positions here that are inconsistent with the positions taken in the arbitration and minimize the possibility of duplication of effort.

Plaintiffs' assertion of work product protection is similarly unavailing. Assuming, without deciding, that the material in issue is in fact work product, Conti Zweite and Contship were clearly adverse to each other in the London arbitration. Since the documents in issue would have been disclosed to both in the London arbitration, whatever work product protection attached to the documents was waived. In Re SSteinhardt Partners, L.P., 9 F.3d 230, 234-35 (2d Cir. 1993) (traders's disclosure of document to S.E.C. at a time when trader was adverse to S.E.C. precluded any assertion of work product protection in subsequent class action litigation with private parties).

Accordingly, PPG's motion to compel-disclosure is granted in all respects. Within ten (10) days of the date of this Order, Contship and Conti Zweite are directed to produce to PPG (1) expert submissions; (2) correspondence with the panel of arbitrators; (3) briefs and other submissions to the panel and (4) hearing transcripts, prepared in connection with the London arbitration between Contship and Conti Zweite regarding the 1997 explosion and fire aboard the Contship France.

SO ORDERED

20030417

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