ORION S. & T. CO. v. Eastern States Petro. Corp. of Panama

• Court: U.S. Court of Appeals — Second Circuit
• Writing for the Court: SWAN, CLARK and MEDINA, Circuit
• Citation: ORION S. & T. CO. v. Eastern States Petro. Corp. of Panama, 284 F.2d 419 (2nd Cir. 1960)
• Decision Date: 05 December 1960
• Docket Number: Docket 26299.,No. 95,95
• Parties: ORION SHIPPING & TRADING CO., Inc., Libelant-Appellee, v. EASTERN STATES PETROLEUM CORPORATION OF PANAMA, S.A., Eastern States Petroleum and Chemical Corporation and Signal Oil & Gas Company, Respondents, Eastern States Petroleum Corporation of Panama, S.A., Respondent-Appellant.

284 F.2d 419 (1960)

ORION SHIPPING & TRADING CO., Inc., Libelant-Appellee, v. EASTERN STATES PETROLEUM CORPORATION OF PANAMA, S.A., Eastern States Petroleum and Chemical Corporation and Signal Oil & Gas Company, Respondents Eastern States Petroleum Corporation of Panama, S.A., Respondent-Appellant.

No. 95, Docket 26299.

United States Court of Appeals Second Circuit.

Argued October 31, 1960.

Decided December 5, 1960.

Hill, Rivkins, Middleton, Louis & Warburton, New York City, George B. Warburton, and Joseph T. McGowan, New York City, of Counsel, for respondent-appellant.

Healy, Baillie & Burke, New York City, Raymond J. Burke and Thomas A. Dillon, Jr., New York City, of Counsel, for appellee.

Before SWAN, CLARK and MEDINA, Circuit Judges.

SWAN, Circuit Judge.

The order on appeal was entered in an admiralty suit brought by libelant-appellee hereafter called Orion, in a cause of maritime contract of affreightment against appellant, a Panamanian corporation hereafter called Panama, and two other domestic corporations hereafter called Eastern and Signal respectively. The libel asserts a first cause of action against Panama only, and a second cause of action only against the other two respondents. The order for arbitration does not affect them, and they are not appellants.

Orion and Panama, which designated itself "as agents for chartered owners * * * of tonnage to be nominated without restriction of flag" made a contract of affreightment, dated October 8, 1954, for the carriage of petroleum products from a foreign port to Houston, Texas. By the terms of the contract Orion was to supply vessels and Panama was to supply petroleum products at the rate of 10,500 barrels per day (with a permissible 10% variance) at agreed freight rates. The contract was to run to March 1960, but was later extended to March 1961. Performance by Panama was guaranteed by Eastern before its merger with Signal. Mutual performance of the contract was carried out until September 29, 1959 when Panama repudiated further performance. Orion filed its libel on October 7, 1958. It sought damages of $1,150,000 against Panama, and reserved the right to apply for an order requiring arbitration of its claim pursuant to clause 14 of the contract. This clause provided in part:

"* * * Should one of the parties neglect or refuse to appoint an Arbitrator within twenty-one days after the receipt of request from the other party, the single Arbitrator appointed shall have the right to decide alone, and his decision shall be binding on both parties. For the purpose of enforcing awards this agreement shall be made a Rule of of Court."

Service of the libel was obtained on Eastern, and proctors for Eastern and Signal thereafter filed their appearance. No answer or appearance was filed by Panama and libelant was unable to attach any of its property under writ of foreign attachment. On October 27, 1959, libelant's proctors notified the proctors of Eastern and Signal by letter of that date that, in accordance with the above noted clause 14, Mr. John F. Shea was Orion's arbitrator and requested them to "notify us the name of the arbitrator appointed by your client." By a show cause order returnable November 24, 1959 proctors for Eastern and Signal moved to vacate the notice of October 27 demanding arbitration. Subsequently this motion was granted on consent. On November 24, 1959 Orion obtained an order directing Panama to show cause on December 1, 1959 why it should not proceed to arbitration. This order was served upon Panama by registered mail received in Panama City on November 27, 1959. On January 11, 1960 proctors for Panama served a notice of...