The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.
Stolt Tankers BV ("Stolt") petitions to compel Allianz Seguros S.A. ("Allianz") and Ace Seguradora S.A. ("Ace") (collectively, "Respondents") to proceed with arbitration and to enjoin Respondents from proceeding with a lawsuit in the court of Brazil. For the reasons discussed below, the petition to compel arbitration and enjoin Respondents from proceeding with their suit is granted.
On January 19, 2009, Stolt, as "Owner" of the M/V STOLT EXCELLENCE, and Tricon Shipping Inc. ("Tricon"), as "Charterer," entered into a voyage "Charter Party" on an amended "ASBATANKVOY Charter Party form" ("Asbatankvoy Form").*fn1 Specifically, through the Charter's "Fixture Recap,"*fn2 Stolt and Tricon agreed to the following provisions: (a) application of "U.S. Law;" (b) "Arbitration in New York;" (c) use of the "C/P [charter party] Asbatankvoy" form as the basis for their contractual arrangements; and (d) the inclusion of the "Tricon Shipping Inc. Shipping Clauses" as part and parcel of the Charter.*fn3
Part II, Clause 24 of the Asbatankvoy Form, in turn, provides as follows:
24. ARBITRATION. Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London whichever place is specified in Part I of this charter . . . .*fn4
On February 11, 2009, Tricon loaded onboard the M/V STOLT EXCELLENCE several quantities of "caustic soda." Stolt then issued "Tanker bills of lading" Nos. 482A, 482B, and 482C,*fn5 expressly identifying Klabin S.A. ("Klabin") as "Consignee" to bill Nos. 482A and 482B, and identifying Suzano Papel e Celolose S.A. ("Suzano") as "Consignee" to bill No. 482C. Each of the Stolt bills of lading contains the following clause:
This shipment is carried under and pursuant to the terms of the Charter 01 19 2009 at Houston, Texas between STOLT TANKERS, BV and TRICON SHIPPING as Charterer, and all the terms whatsoever of the said Charter, including the arbitration clause, except the rate and payment of freight specified therein, apply to and govern the rights of the parties concerned in this shipment.*fn6 Upon arrival of the M/T STOLT EXCELLENCE at Santos, Brazil, Klabin and Suzano alleged that a portion of the caustic soda had been damaged. Eventually, Zass Internacional Consultoria Ltda. ("Zass") advised Stolt that it represented Ace and Allianz, the purported subrogated underwriters of Suzano and Klabin, repectively,*fn7 and that it had been authorized by Ace and Allianz to seek recovery against Stolt in subrogation for the cargo claims allegedly paid to their insureds. Stolt engaged Brazilian counsel to deal directly with Zass, but ultimately the parties' efforts to resolve Respondents' claims proved unsuccessful, and Zass threatened to and did commence lawsuits in Brazil against Stolt. In response, Stolt retained counsel to demand that Respondents arbitrate in New York. Respondents have refused to nominate their arbitrator pursuant to the terms of the Charter and Stolt bills of lading. Stolt now moves to compel arbitration and to enjoin Respondents from continuing proceedings in Brazil.
A. In Personam Jurisdiction
A party who agrees to arbitrate in New York "must be deemed to have consented to the jurisdiction of the court that could compel the arbitration proceeding in New York. To hold otherwise would be to render the arbitration clause a nullity."*fn8 The Second Circuit has repeatedly upheld the rule that arbitration forum clauses confer personal jurisdiction by consent.*fn9 It is, therefore, "well-settled that federal courts applying New York law have personal jurisdiction over parties that agree to arbitrate their disputes in New York."*fn10
Because an insurer's "right of recovery . . . is governed by the same terms as the insured's right of recovery,"*fn11 an insurer-subrogee "is equally bound by a consent to jurisdiction."*fn12 Therefore, as long as the arbitration clause "is enforceable, this court has personal jurisdiction over [Respondents] . . . ."*fn13
Where a party has agreed to arbitrate and thus has consented to the jurisdiction of the courts where arbitration is to take place, "the sole function of process" is to notify the other party of the proceedings.*fn14 In accordance with Rule 4(h)(2) of the Federal Rules of Civil Procedure, the service of process on a foreign corporation abroad must be done in accordance with Rule 4(f). Rule 4(f)(3) states that the ...