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As v. Trefin Tankers Ltd.

United States District Court, S.D. New York

May 9, 2014

CRYSTAL POOL AS, Petitioner,
v.
TREFIN TANKERS LTD., Respondent.

OPINION AND ORDER

RONNIE ABRAMS, District Judge.

Before the Court is a petition to compel arbitration of a maritime contract dispute. Petitioner Crystal Pool AS alleges that Respondent Trefin Tankers Limited failed to pay money due on six invoices. Invoking an arbitration clause in the contracts at issue, Crystal Pool appointed an arbitrator in October 2012 and twice requested that Trefin Tankers appoint its own arbitrator. Receiving no response, Crystal Pool filed this action on December 27, 2012. The Court hereby grants Crystal Pool's petition and orders the parties to submit their dispute to arbitration.

BACKGROUND

In March and May of 2012, Crystal Pool, a Norwegian corporation, and Trefin Tankers, a Greek corporation, entered into two charter parties.[1] (Daly Aff. ¶¶ 3, 7, Exs. 2, 5; Pet. ¶¶ 2-3.) Pursuant to the charter parties, Trefin Tankers leased the M/V Crystal Ambra and the M/V Bow Balearia from Crystal Pool, their disponent owner, [2] to transport shiploads of petrochemicals from Augusta, Italy to Rotterdam, the Netherlands. (Daly Aff. ¶¶ 3, 7, Exs. 2-3, 5-6.) Crystal Pool alleges that it performed all of its duties under the charter parties. (Pet. ¶¶ 6, 14.) It further alleges that it sent Trefin Tankers six invoices between March 19, 2012 and June 29, 2012 for items such as freight, cost, and demurrage, but that the invoices were never paid. (Daly Aff. ¶¶ 5-6, 9-10, Exs. 4, 7; Pet. ¶¶ 7, 15.)

Both of the charter parties incorporate the terms of the ExxonMobil VOY2005 standard form charter party, which contains a clause providing that "[a]ny and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York." (Daly Aff. ¶ 2, Ex. 1 ¶ 35, Ex. 2 at 5, Ex. 5 at 5; Pet. ¶ 5.) On October 12, 2012, Crystal Pool commenced arbitration to obtain payment for the unpaid invoices by appointing an arbitrator, notifying Trefin Tankers of the appointment, and requesting that Trefin Tankers appoint its own arbitrator.[3] (Pet. ¶¶ 8, 16, Exs. 1, 3.) Receiving no response, on November 12, 2012, Crystal Pool again requested that Trefin Tankers appoint an arbitrator. (Pet. ¶¶ 9, 17, Exs. 2, 4.) Trefin Tankers never responded to the requests and has not appointed its own arbitrator. (Pet. ¶¶ 10-11, 18-19.)

On December 27, 2012, Crystal Pool filed the instant "Verified Petition to Appoint an Arbitrator and Compel Arbitration." Trefin Tankers has not entered an appearance in this Court or responded in any way to Crystal Pool's petition. For the reasons that follow, Crystal Pool's petition to compel arbitration is granted.

DISCUSSION

I. Jurisdiction

As an initial matter, the Court notes that it has jurisdiction under the Federal Arbitration Act of 1925 ("the FAA"), 9 U.S.C. §§ 1-16, because the underlying dispute between Crystal Pool and Trefin Tankers arises under admiralty law.[4] Because the FAA "does not constitute an independent grant of jurisdiction to the federal courts, a party seeking to compel arbitration in a federal court must establish an independent basis for subject matter jurisdiction." Zurich Ins. Co. v. Ennia Gen. Ins. Co., 882 F.Supp. 1438, 1439 (S.D.N.Y. 1995). Section 4 of the FAA affords federal courts jurisdiction over motions to compel arbitration if they "would have jurisdiction under Title 28, in a civil action or in admiralty of the subject matter of a suit arising out of the controversy between the parties..., " 9 U.S.C. § 4, and Title 28 grants district courts original jurisdiction over "[a]ny civil case of admiralty or maritime jurisdiction, " 28 U.S.C. § 1333(1). District courts thus have jurisdiction over petitions to compel arbitration where the underlying dispute arises under admiralty law. See, e.g., Sunskar Ltd. v. CDII Trading, Inc., 828 F.Supp.2d 604, 613 n.3, 620 (S.D.N.Y. 2011) (compelling arbitration and explaining that, "[b]ecause [the petitioner's] claim arises under' admiralty law, federal subject matter jurisdiction exists in this case"); Amoco Overseas Oil Co. v. Astir Navigation Co., Ltd., 490 F.Supp. 32, 35 (S.D.N.Y. 1979) ("It is clear that the case meets the jurisdictional requirements of [the FAA], since it involves a maritime contract and since the charter party contains an arbitration clause providing for arbitration in New York....").

Moreover, because Crystal Pool and Trefin Tankers are both foreign corporations, the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 ("the Convention") and its implementing legislation, 9 U.S.C. §§ 201-08, provide an additional, independent basis for subject matter jurisdiction. The Convention "applies to arbitration proceedings held in this country involving at least one party that is not a United States citizen, " Commercial Risk Reinsurance Co. Ltd. v. Sec. Ins. Co. of Hartford, 526 F.Supp.2d 424, 427 (S.D.N.Y.2007), and "grants the district courts the power to compel arbitration" in such cases, Zurich, 882 F.Supp. at 1439-40 (compelling arbitration of a dispute pursuant to § 206 where both parties were foreign corporations).

The Court has personal jurisdiction over Trefin Tankers as well, as it has consented to arbitration in New York. See, e.g., Farr & Co. v. CIA. Intercontinental De Navegacion De Cuba, S.A., 243 F.2d 342, 344 n.1, 346-48 & n.6 (2d Cir. 1957) (holding that a foreign corporation had consented to personal jurisdiction by signing a contract that provided for mandatory arbitration in New York); MidOil USA, LLC v. Astra Project Fin. Pty Ltd., No. 12 Civ. 8484 (PAC)(KNF), 2013 WL 4400825, at *1 (S.D.N.Y. Aug. 15, 2013) (concluding that court had jurisdiction over foreign defendant and noting that "the traditional minimum contacts analysis is unnecessary because the forum selection clause constitutes consent to jurisdiction").

II. The Arbitration Agreement

The FAA embodies "a liberal federal policy favoring arbitration agreements" and the Supreme Court has held that "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-26 (1983). Indeed, "[t]he policy in favor of arbitration is even stronger in the context of international business transactions." David L. Threlkeld & Co., Inc. v. Metallgesellschaft Ltd. (London), 923 F.2d 245, 248 (2d Cir. 1991). In ruling on a motion to compel arbitration, the Court's "inquiry is two-fold: whether the parties agreed to arbitrate, and, if so, whether the scope of that agreement encompasses the asserted claims." Id. at 249.

Crystal Pool and Trefin Tankers entered into valid agreements to arbitrate the present dispute. Their agreements were formalized in "fixtures, " a typical method of forming ...


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