Linea Navira De Cabotaje v. Mar Caribe

• Decision Date: 07 May 2001
• Docket Number: No. 3:99-CV-471-J-25C.,3:99-CV-471-J-25C.
• Citation: 169 F.Supp.2d 1341
• Parties: LINEA NAVIERA DE CABOTAJE, C.A., Plaintiff, v. MAR CARIBE DE NAVEGACION, C.A., Defendant.
• Court: U.S. District Court — Middle District of Florida

169 F.Supp.2d 1341

LINEA NAVIERA DE CABOTAJE, C.A., Plaintiff, v. MAR CARIBE DE NAVEGACION, C.A., Defendant.

No. 3:99-CV-471-J-25C.

United States District Court, M.D. Florida, Jacksonville Division.

May 7, 2001.

COPYRIGHT MATERIAL OMITTED

James Francis Moseley, Jr., Moseley, Warren, Prichard & Parrish, Jacksonville, FL, Don P. Murnane, Jr., Freehill, Hogan & Mahar LLP, Peter J. Gutowski, Freehill, Hogan & Mahar LLP, New York, NY, for Linea Naviera De Cabotaje C.A., plaintiffs.

Courtney W. Stanton, Thomas Corley Smith, Law offices of Courtney W. Stanton, Jacksonville, FL, for Mar Caribe De Navegacion, C.A., defendants.

ORDER

ADAMS, District Judge.

Pending before the Court are various Motions. At a status conference held on August 23, 2000, the parties were optimistic that a joint stipulation of facts could be formulated from which the Court could resolve pending motions and the Court issued a Scheduling Order for such a stipulation. (Dkt.89). Like many good intentions, however, optimism may have been premature and the parties have apparently been unable to concur. Accordingly, the Court will examine the record before it.

There are three basic issues before the Court: a Motion to Compel Arbitration; a Motion to Dismiss on forum non-conveniens grounds; and an appeal from an Order of Magistrate Judge Timothy J. Corrigan denying a Motion to Strike Affidavit and Dissolve Attachments. (Dkt.69).

I. Motion to Compel Arbitration

A. Procedural History and Background

Linea Naviera De Cabotaje, C.A., (hereinafter "Linaca"), a Venezuelan business entity, owns the Venezuelan vessels M/V Cuidad Guayana and Cuidad Bolivar. According to the Complaint (Dkt.1), on or about September 7, 1998, Linaca entered into a maritime charter/contract of affreightment¹ with Mar Caribe De Navegacion C.A. (hereinafter "Mar Caribe"), also a Venezuelan business entity. The ships were to be used by Mar Caribe to ship bulk concrete clinker, iron ore and bauxite. Following eleven voyages between Venezuelan ports, during which approximately 90,000 metrictons of cargo were shipped, and at least partial payments were made by Mar Caribe to Linaca, financial disputes arose. Linaca, which was paid based on tonnage shipped, contends Mar Caribe did not ship the required minimum tonnage, resulting in under-shipment damages of $308,000.² Linaca also asserts demurrage³ damages of $323,447.60. Additional sums, including advance arbitration expenses of $100,000, attorney fees, interest and costs are also requested, for a total of $840,748.08 claimed as of the date of the Complaint.

Linaca moves to compel arbitration,⁴ to stay this action and to order Mar Caribe to appoint an arbitrator within three days of the Court's Order, failing which the Court is requested to appoint one. (Dkt.22). Mar Caribe contends there is no agreement to arbitrate.

The parties each signed separate agreements, each with an arbitration provisions. Neither party signed the other's version. Mar Caribe asserts: (1) there is no bilaterally executed agreement; therefore there is no agreement to arbitrate; (2) there is a threshold question — regardless of what the business arrangement was between the parties, it is illegal under Venezuelan law and therefore cannot be enforced; and (3) dismissal on forum non conveniens grounds is warranted, thus avoiding the arbitration issue at least in this forum.

Linaca and Mar Caribe each unilaterally executed separate charter party "agreements." While the Court has not gleaned all of the differences between the two versions (both of which are lengthy and replete with nautical technicalities), both versions list Linaca as ship owner, Mar Caribe as charterer, and the ships as the M/V Cuidad Guayana and Ciudad Bolivar. Both versions provide for arbitration in New York of any dispute arising under the charter, albeit on somewhat different terms. The version signed by Mar Caribe, the party resisting arbitration, provides for arbitration in New York with each party to appoint an arbitrator and if the two cannot agree, then the two would appoint an "umpire":

CLAUSE 24: ARBITRATION

ANY DISPUTE ARISING UNDER THIS CHARTER TO BE REFERRED TO ARBITRATION, IN NEW YORK WITH ONE (1) ARBITRATOR NOMINATED BY OWNERS AND ONE (1) ARBITRATOR

NOMINATED BY CHARTERERS, AND IN CASE THE ARBITRATORS FAIL TO REACH AN AGREEMENT THEN THE DECISION OF AN UMPIRE TO BE APPOINTED BY THEM, THE AWARD OF THE ARBITRATORS AND/OR UMPIRE TO BE FINAL AND BINDING UPON BOTH PARTIES. IF EITHER OF THE APPOINTED ARBITRATORS REFUSED [SIC] TO ACT, OR IS UNCAPABLE [SIC] OF ACTING, OR DIES, THE PARTY WHICH APPOINTED SUCH ARBITRATION [SIC] MAY APPOINT A NEW ARBITRATOT [SIC] IN HIS PLACE.

IF ONE PARTY FAILS TO APPOINT AN ARBITRATOR, EITHER ORIGINALLY, OR BY WAY OF SUBSTITUTION AS AFORESAID, FOR SEVEN (7) CLEAR DAYS AFTER THE OTHER PARTY, HAVING APPOINTED ITSS [SIC] ARBITRATOR, HAS SERVED THE PARTY MAKING DEFAULT WITH NOTICE TO MAKE THE APPOINTMENT, THE PARTY WHICH HAS APPOINTED AN ARBITRATOR MAY APPOINT THAT ARBITRATOR TO ACT AS SOLE ARBITRATOR IN THE REFERENCE AND HIS AWARD SHALL BE BENDING [SIC] ON BOTH PARTIES AS IF HE HAD BEENN [SIC] APPOINTED BY CONSENT.

THIS CHARTER PARTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH ENGLISH LAW.

(Mar Caribe's Opposition to Motion to Compel Arbitration, Dkt. 39. Exh. 3, unnumbered 4, emphasis supplied). This clause does not appear in the form portion of the contract, but in a specific four page addendum entitled "Rider Clauses," tailored to this charter party, typed in large font, each page separately signed by Mar Caribe.

Linaca's version also provides for arbitration in New York with each party to select an arbitrator. The two selected would chose a third and the decision of two out of three would be binding:

CLAUSE 23: ARBITRATION

Should any dispute arise out of this Charter, the Matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; 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. This Charter shall be governed by the Federal Maritime Law of the United States. (General Maritime Law of the United States.) The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators Inc.

Notwithstanding anything contained herein to the contrary should the sum claimed by each party not exceed US$ 50,000.00 (U.S. dollars fifty thousand with 00/100), the dispute is to be governed by 2 shortened Arbitration Produce [sic] of the Society of Maritime Arbitrators Inc.

(Affidavit of James F. Moseley, Jr., Dkt. 24, Exh. A, unnumbered 13, emphasis supplied).

B. Legal Principles and the Court's Conclusions

Under the Federal Arbitration Act, 9 U.S.C. §§ 2 & 4, "[a] written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction" is "valid, irrevocable, and enforceable" and upon petition to any federal district court, "upon being satisfied that the making of the agreement for arbitration is not in issue [the court]... shall make an order directing the parties to proceed to arbitration...." Nevertheless, the Act does not require parties to arbitrate when they have not agreed to do so. "It simply requires courts to enforce privately negotiated agreements to arbitrate, like other contracts, in accordance with their terms." Volt Info. Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). "The purpose of the Federal Arbitration Act was to relieve congestion in the courts and to provide parties with an alternative method for dispute resolution that would be speedier and less costly than litigation." Indus. Risk Insurers v. M.A.N. Gutehoffnungshutte GmbH, 141 F.3d 1434, 1440 (11th Cir.1998). The Act demonstrates a "liberal federal policy favoring arbitration agreements." Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 522, 148 L.Ed.2d 373 (2000); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). Accordingly, "questions of arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). Generally, "the parties' intentions control, but those intentions are generously construed as to issues of arbitrability." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). While an agreement to arbitrate must be in writing, there is no requirement that the writing be signed.⁵ Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F.2d 840, 845-46 (2nd Cir.1986). See Valero Refining, Inc. v. M/T Lauberhorn, 813 F.2d 60, 62 (5th Cir.1987)("It is established that a party may be bound by an agreement to arbitrate even in the absence of his signature"); Medical Dev. Corp v. Indus. Molding Corp., 479 F.2d 345, 348 (10th Cir.1973)("Decisions under the Federal Arbitration Act ... have held it not necessary... that a party sign the writing containing the arbitration clause"); Western Int'l Media Corp. v. Johnson, 754 F.Supp. 871, 873 (S.D.Fl.1991).

The foregoing written provisions and signatures of the parties are not disputed. The determination of whether or not these written provisions evince an agreement to arbitrate is a question of federal law. U.S.C. Title 9; Prima Paint Corp. v. Flood & Conklin Mfg., 388 U.S. 395, 403-404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967). For the purpose of determining whether the parties agreed to arbitrate, the arbitration provisions are severed from the balance of the disputed business relationship between these parties. Id. The Court determines that despite...