Import Export Steel Corp. v. Mississippi Val. Barge Line Co.

• Decision Date: 29 July 1965
• Docket Number: Docket 29616.,No. 476,476
• Parties: In the Matter of Arbitration between IMPORT EXPORT STEEL CORPORATION and Nimpex International, Inc., Petitioners-Appellees, v. MISSISSIPPI VALLEY BARGE LINE COMPANY, Respondent-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

351 F.2d 503 (1965)

In the Matter of Arbitration between IMPORT EXPORT STEEL CORPORATION and Nimpex International, Inc., Petitioners-Appellees, v. MISSISSIPPI VALLEY BARGE LINE COMPANY, Respondent-Appellant.

No. 476, Docket 29616.

United States Court of Appeals Second Circuit.

Argued May 5, 1965.

Decided July 29, 1965.

Rehearings Denied October 26, 1965.

Joseph T. McGowan, New York City (Clare E. Walker and Hill, Rivkins, Louis & Warburton, New York City, on the brief), for petitioners-appellees.

William Warner, New York City (Symmers, Fish & Warner, New York City, on the brief), for respondent-appellant.

Before MOORE, SMITH and HAYS, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge.

This appeal raises the question whether a subcharterer, appellant Mississippi Valley Barge Line, Inc. (Mississippi), is bound by the arbitration clause of a voyage charter party and an addendum thereto, entered into by its agent, Bulk Carriers, Ltd. (Bulk), the "disponent owner" of the vessel, and Nimpex International, Inc. (Nimpex) and incorporated in the bills of lading issued for the charter cargo, in arbitration proceedings instituted by Nimpex and Import Export Steel Corporation (Impex), an affiliate of Nimpex and the notify party on the bills of lading. The District Court, Thomas F. Croake, D. J., granted the petition for arbitration finding that Mississippi had assumed the obligations of Bulk under the charter party, including the obligation to arbitrate. We affirm in part and reverse in part, holding that Mississippi is bound to arbitrate with Nimpex but not with Impex.

The owner of the freighter S.S. Dori, through its agent Venizelos, S.A., voyage chartered the vessel on October 23, 1963 to Bulk which, in turn, on the same day entered into a subcharter agreement with Nimpex for the carriage of approximately 9,800 long tons of steel coils from Bremen or Emden, Germany to New Orleans, Louisiana. The subcharter provided that "should any dispute arise between the Owners and the Charterers, the matter in dispute shall be referred to three persons in New York, one to be appointed by each of the parties hereto, and the third by the two so chosen * * *." The following month Mississippi appointed Bulk as its "overseas Agents" for the primary purpose of soliciting overseas cargo for carriage on inland rivers served by Mississippi barges, and Mississippi also advised Bulk that it was prepared to issue through Bulk "Through Bills of Lading" from point of origin overseas through to the destination on waterways traveled by Mississippi.

On December 13, 1963 the subcharter agreement was amended to provide that the disponent owner (Bulk) would issue to the charterer (Nimpex), upon completion of the loading of the cargo at the German ports, a through bill of lading in the name of Mississippi and that the disponent owner would deliver the cargo to Chicago, Illinois after transshipment from the Dori at New Orleans and carriage on a Mississippi barge. Mississippi and Bulk entered into a memorandum of agreement that same day, according to the date appearing on the document, wherein the Dori charter party, dated October 23 and December 13, 1963 was sublet by Bulk to Mississippi, and Mississippi assumed all the obligations and privileges of Bulk under the subcharter and addendum in exchange for Bulk's issuing through bills of lading covering the carriage by sea, transshipment and onward carriage by barge. The addendum to the subcharter contained an arbitration clause which provided as follows:

"Should any dispute arise between the Disponent Owners and the Charterers, the matter in dispute shall be referred to three persons in New York, one to be appointed by each of the parties hereto, and the third by the two so chosen, and their decision, or that of any two of them, shall be final, and, for purpose, of enforcing any award, this agreement may be made a rule of the Court. The arbitrators shall be commercial men."

The cargo of steel coils was loaded at Bremen on December 27 and at Emden on December 31, and the Dori's master issued a total of fifteen bills of lading covering the carriage of the shipment to New Orleans. Each bill of lading designated Schulte & Bruns of Bremen, agent for the cargo interests and Bulk, as the shipper and Impex as the notify party and incorporated in form language "All the terms, conditions, liberties and exceptions of the Charter Party * * *." Schulte & Bruns accepted them and later endorsed them in blank.

The Dori departed from Germany in January proceeding for its destination at New Orleans which it never reached; the vessel foundered on January 16 in waters off the Azores. On January 23, Bulk, as agent for Mississippi, delivered bills of lading to Nimpex, superseding the earlier bills of lading, for carriage of the steel coils to St. Louis, Missouri. The new bills, dated December 27 and 31, 1963, bore the following provision which had been inserted by Bulk: "All the terms, conditions, liberties and exceptions of the charter party dated 23.10.63 and addendum thereto dated 13.12.63 are herewith incorporated * * *." Finally, in a letter dated May 26, 1964, Nimpex and Impex made demand on Mississippi to arbitrate the subject of dispute, namely liability for the cargo loss. Upon Mississippi's rejection of the demand, Nimpex and Impex jointly commenced this suit to compel arbitration.

Nimpex and Impex each occupy a different place in the factual labyrinth and their respective rights to enforce the arbitration clause differ accordingly. Impex, we hold, cannot compel Mississippi to arbitrate the dispute. Mississippi assumed the obligations of Bulk only...