Nortuna Shipping Company v. Isbrandtsen Company

• Decision Date: 27 March 1956
• Docket Number: Docket 23903.,No. 257,257
• Citation: 231 F.2d 528
• Parties: Matter of the Petition of NORTUNA SHIPPING COMPANY, Owner of THE NORLANDA, for an order directing Isbrandtsen Company, Inc., Charterer of said vessel to Proceed to Arbitration. NORTUNA SHIPPING COMPANY, Petitioner-Appellee, v. ISBRANDTSEN COMPANY, Inc., Respondent-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

231 F.2d 528 (1956)

Matter of the Petition of NORTUNA SHIPPING COMPANY, Owner of THE NORLANDA, for an order directing Isbrandtsen Company, Inc., Charterer of said vessel to Proceed to Arbitration NORTUNA SHIPPING COMPANY, Petitioner-Appellee, v. ISBRANDTSEN COMPANY, Inc., Respondent-Appellant.

No. 257, Docket 23903.

United States Court of Appeals Second Circuit.

Argued February 8, 1956.

Decided March 27, 1956.

Writ of Certiorari Denied June 4, 1956.

McNutt & Nash, New York City (James E. Freehill and Donald B. Allen, New York City, of Counsel), for appellee.

Lord, Day & Lord, New York City (Woodson D. Scott, New York City, of Counsel), for appellant.

Before MEDINA, LUMBARD and WATERMAN, Circuit Judges.

Writ of Certiorari Denied June 4, 1956. See 76 S.Ct. 1028.

MEDINA, Circuit Judge.

On November 12, 1948, appellee Nortuna Shipping Company made a Time Charter of its S. S. Norlanda to appellant Isbrandtsen Company, Inc. The charter party contained a clause providing for the arbitration of any disputes between the parties. The appeal is from an order made on October 3, 1955, granting Nortuna's petition for a direction that, pursuant to Section 4 of the Federal Arbitration Act, 9 U.S.C. § 4, Isbrandtsen be required to proceed to arbitrate a dispute as to whether or not Nortuna was entitled to reimbursement from Isbrandtsen of an amount paid on September 29, 1950, in settlement of the claim of the owner of a tug for damages arising out of a collision between the tug and a bulkhead, as the S. S. Norlanda was being assisted by the tug while leaving the port of Le Havre, France, on January 18, 1949. Under the terms of the standard towing contract Nortuna, as owner of the towed vessel, was subject to absolute liability for any damage sustained by the tug.

Isbrandtsen opposes arbitration, alleging that Nortuna had waived the right to arbitrate this particular dispute by proceeding to an award with the arbitration of a number of other miscellaneous matters arising out of the charter party operation, and that the right to arbitrate the tug damage dispute was barred, either by the Statute of Limitations or by the laches of Nortuna.

That the right to compel arbitration under the Federal Arbitration Act may be waived is clearly established. E. g., American Sugar Refining Co. v. The Anaconda, 5 Cir., 138 F.2d 765; Galion Iron Works & Mfg. Co. v. J. D. Adams Mfg. Co., 7 Cir., 128 F.2d 411; William S. Gray & Co. v. Western Borax Co., 9 Cir., 99 F.2d 239; Radiator Specialty Co. v. Cannon Mills, Inc., 4 Cir., 97 F.2d 318, 117 A.L.R. 299; La Nacional Platanera, S. C. L. v. North American Fruit & S. S. Corp., 5 Cir., 84 F.2d 881; Rederiaktieselskabet Nidaros v. Steamship Owners Operating Co., D.C. S.D.N.Y., 25 F.Supp. 663. In these cases, however, the party held to have waived its right to arbitrate a dispute either had commenced suit in court, as in La Nacional Platanera, S. C. L. v. North American Fruit & S. S. Corp., supra, and Rederiaktieselskabet Nidaros v. Steamship Owners Operating Co., supra, or, if named as defendant in an action brought against him, had stipulated for some other mode of settlement, William S. Gray & Co. v. Western Borax Co., supra, or had answered on the merits or had set up a counterclaim, Radiator Specialty Co. v. Cannon Mills, Inc., supra. The principle involved is that invoking or actively assenting to the jurisdiction of a court, being manifestly inconsistent with an assertion of the right to arbitrate the same dispute, constitutes a waiver.

None of the cases above referred to control the situation before us now, as the thrust of Isbrandtsen's argument, on the claim of waiver, is that, having submitted once to arbitration it should not be made to do so again with respect to a dispute which existed and was known to Nortuna at the time the first arbitration was had.

But the reason why the waiver argument cannot prevail is, as held by the District Court, that the parties in effect agreed that there should be a separate arbitration of the dispute over the damage to the tug. The general demand for arbitration was made on February 8, 1950, and the award therein was handed down on November 7, 1952. Prior to all this, and before Nortuna had settled with the owner of the tug, there was an exchange of letters between the parties under the dates of August 24 and August 31, 1949, to the effect that the payment to the owner of the tug could be made "without prejudice to the question of ultimate liability as between shipowner and charterer" and that the dispute as to who should bear the loss would be arbitrated. We can find nothing in the record before us to indicate that this arrangement was abrogated or superseded by the later arbitration, where this particular dispute was apparently not considered or passed upon. As the payment to the owner...