Interocean Transportation Company v USA
| Date | 05 October 1937 |
| Docket Number | Case No. 115 |
| Court | U.S. District Court — District of New Jersey |
(Judge Joseph C. Hutcheson, Jr., Arbitrator.)
Claims — Denial of Justice — Denial of Justice in Judgments on Questions of Fact — Absence of Credible Evidence — Exhaustion of Legal Remedies — Illusory Remedies — Measure of Damages — Speculative Damages — Nature of Arbitration Proceedings between Government and a Private Party in Matters Arising out of an Inter-State Claim.
The Facts.—On May 19, 1927, by an Exchange of Notes, the United States and Great Britain mutually agreed to regard as closed and settled all accounts for war supplies furnished, services rendered, or damages sustained. While reserving their position as to the legality or otherwise of the war measures adopted during the war of 1914–1918, they agreed not to present against each other any claims on that account. It was conceded by the United States that the effect of the agreement would be to save the United States certain sums of money and that the sums thus saved should be used for the satisfaction of war claims of American nationals for loss or damages, “which the Government of the United States regards as meritorious, and (a) in which the claimants have exhausted their legal remedies in British courts; or (b) in which no legal remedy is open to them; or (c) in respect of which, for other reasons, the equitable construction of the present agreement calls for a settlement”. (At p. 596.)
The present case was the result of an agreement for arbitration between the Trustee in Bankruptcy of the Inter-oceanic Transportation Company of America and the Government of the United States. The former claimed damages for the detention of the s.s. Lisman in a British port during the World War. They had previously brought an action before the British Prize Court. In that action the claimants did not deny that there was a reasonable cause for refusal or for requiring the goods to be discharged; but they maintained that there was on the part of the Crown undue delay in taking the steps which they were entitled to take as belligerents. The Court found that, on the facts, the claim was unfounded.1 The present proceedings took place in pursuance of the Anglo-American Agreement of 1927.
Held: that the claim must be rejected.
I. Nature of Arbitral Proceedings.—The Arbitrator said: “This may be briefly and adequately made by saying that this is an arbitration, not a mediation, the end sought not conciliation, but a determination according to law. In this proceeding therefore the function and duties of the Arbitrator are those of the judge, not those of the mediator; the methods and processes of decision judicial, not mediatorial.2 The scope and sweep of the inquiry and search, into the facts and the law, must therefore be as wide and as free as, but no wider nor freer than, judicial methods and processes permit and enjoin.” (At p. 595.)
II. Exhaustion of Legal Remedies. Illusory Remedies.—The contention of the United States that as the claimant failed to appeal against the decision of the Prize Court his claim could not be entertained must be rejected. The Arbitrator said: “By the Agreement [of 1927] … the Government of the United States (1) completely releases Great Britain from answerability to it, as well on claims due it for loss to its nationals as on claims for loss, debt, or damage due directly to itself; (2) holds her to full answerability to American nationals in British Prize Courts; (3) holds itself as to war claims of its nationals, who, having real, not illusory remedies in the British Prize Courts, have exhausted them, answerable in Great Britain's stead to the same extent, but no further, than Great
Britain would have been answerable upon such claims, but for the 1927 Agreement“So...
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