The opinion of the court was delivered by: JOHN KEENAN, Senior District Judge
ORDER & MEMORANDUM OPINION
Plaintiff Rapture Shipping Ltd. ("Rapture"), a Liberian corporation,
filed this action seeking to recover $1,048,483 in alleged property
damage and for punitive damages from Defendants Allround Fuel Trading
B.V. ("AFT") and Chemoil Corporation ("Chemoil").*fn1 This suit was
filed on January 31, 2003, after a similar action was dismissed in
December 2002 by the Rotterdam Court of First Instance (the "Rotterdam
Court"). Rapture alleges that defective marine diesel oil*fn2 delivered
by the defendants caused the breakdown of the M/V Monagas II's ("Monagas
II") auxiliary engines. Presently before the Court is a motion by the
defendants to compel arbitration and stay the action.
Through its agent, Oceanmaris Management Inc., Rapture contracted with
Praxis Energy Agents, S.A. ("Praxis") for the provision of marine fuel
oil to its vessel, the Monagas II. In order to fulfill its contract with
Rapture, Praxis entered into a bunker nomination contract with AFT and
AFT's parent company, Chemoil. Both the Oceanmaris/Rapture-Praxis and
Praxis-AFT/Chemoil contracts are dated November 12, 1999. The
Praxis-AFT/Chemoil bunker nomination lists Praxis as the buyer,
Chemoil/AFT as the seller and supplier and the Monagas II as the motor
vessel to receive the fuel. See Brennan Aff., Ex. 5. The
contract also states that Praxis was "[a]cting as contractual buyers and
in accordance with instructions received by purchaser M/V `Monagas II'
and owners." Id. In addition, the agreement set forth that the
bunker was being nominated in accordance with Chemoil/AFT's general terms
and conditions. Id.
On November 15, 1999, AFT/Chemoil sent, by facsimile, a bunker
confirmation to Praxis. The bunker confirmation reaffirmed that the sale
was based on Chemoil's standard terms and conditions for the sale of
marine fuel oil, and offered to provide a copy of those terms and
conditions if so requested. See Brennan Aff. Ex. 6. The bunker
confirmation established that [t]he fuel oil will be supplied with the
express recognition that procurement was authorized by the owner of the
vessel." Id. Finally, the bunker confirmation stated that
AFT/Chemoil would "assume that all parties agree to this confirmation
unless we are notified in writing within 24 hours." Id.
Although the Monagas II is listed as the vessel to receive the fuel,
Rapture is not a signatory or listed as a party to the Praxis-AFT/Chemoil
agreement. In fact, Rapture claims not have been aware of either the
Praxis-AFT/Chemoil agreement or the November 15, 1999 bunker
confirmation. See Lennon Aff. ¶ 5.
Rapture makes this claim despite the fact that the
Praxis-AFT/Chemoil agreement indicates that it was to be sent to Rapture
or its agent, Oceanmaris, as the end users of the fuel oil. See
Brennan Aff. Ex. 5.
On November 19, 1999, Chemoil delivered the bunkers to the Monagas II
while the vessel was docked in the Port of Rotterdam. Upon delivery of
the marine oil fuel, the Chief Engineer of the Monagas II signed a
receipt for the fuel. See Brennan Aff. Ex. 7. The receipt
signed by the Chief Engineer stated in plain terms that the fuel was
delivered "in accordance with Chemoil Corporation's Standard Terms and
Conditions of sale." Id. By signing the receipt, the Chief
Engineer declared that a copy of the Standard Terms and Conditions had
been provided and that he had the authority to bind the "vessel and her
Included among the "Standard Terms and Conditions of Sale of Marine
Fuel By Chemoil" is an arbitration provision. Article 12 of the Standard
Terms and Conditions state in pertinent part:
a) Any controversy or claim between Buyer and
Seller, or between Buyer and the fuel barge
contractor, relating solely to the quality or
quantity of marine fuels delivered or to be
delivered hereunder or to the sum payable for such
fuel shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the
American Arbitration Association.
Brennan Aff. Ex. 8.
On or about November 25, 1999, the Monagas II suffered a blackout.
Rapture alleges that the blackout was the result of a
breakdown of and damage to the Monagas II's engine equipment that
was caused by defective and unreasonably dangerous marine fuel oil
supplied by AFT and Chemoil at the Port of Rotterdam. See
Compl. ¶ 11. According to Rapture, the Monagas II was left powerless
and stranded during gale force weather conditions that necessitated the
procurement of salvage assistance. Id. at ¶ 12.
Initially, Rapture sued AFT for damages in the Court of First Instance
in Rotterdam, The Netherlands (the "Rotterdam action"). Rapture's claims
for relief were based both on theories of contract law and tort. Of
particular relevance, Rapture argued that AFT had acted as the selling
party toward Rapture and thereby created a contractual relationship
between the two parties. Among the defenses offered by AFT in opposition
to Rapture's claims was the proposition that the Rotterdam Court was not
the proper forum. AFT argued that the dispute belonged in arbitration.
AFT's argument was made in response to Rapture's contention that a
contractual relationship existed between Rapture and AFT.*fn3
By decision dated December 19, 2002, the Rotterdam Court
dismissed Rapture's claims. See Brennan Aff. Exs. 3, 4.
The Rotterdam Court assumed that, as Rapture suggested, a contractual
relationship was created. The court determined, however, that if a
contract had been formed it necessarily incorporated Chemoil's standard
terms and conditions of sale. As such, the arbitration clause included
therein applied and the Rotterdam Court was not a suitable forum for the
action. See Brennan Aff. Ex. 4. Not long after the Rotterdam
Court dismissed its action, Rapture brought suit in this Court.
Unlike the Rotterdam action in which Rapture sought damages based on
contract and tort law, the instant action is confined to claims of
product liability, negligence and fraud. Nonetheless, Rapture's claims
are based on the same incident and involve the same parties.*fn4
Furthermore, the primary affirmative defense raised that
arbitration should be compelled and the action stayed is
identical to the defense raised and litigated in the Rotterdam action.
The initial issue facing the Court, therefore, is what, if any, weight
should the Rotterdam Court's decision carry in this action. Not
surprisingly, the parties are of differing minds when it comes to