Richard Nathan Corp. v. Diacon-Zadeh

• Citation: 101 F. Supp. 428
• Parties: RICHARD NATHAN CORP. v. DIACON-ZADEH.
• Decision Date: 03 December 1951
• Court: U.S. District Court — Southern District of New York

101 F. Supp. 428

RICHARD NATHAN CORP. v. DIACON-ZADEH.

United States District Court S. D. New York.

December 3, 1951.

Nelson, Healy, Baillie & Burke, New York City, for petitioner.

Harry Torczyner, New York City, Renato C. Giallorenzi, New York City, of counsel, for respondent.

DIMOCK, District Judge.

This is a petition to compel arbitration under a certain charter party in which respondent agreed to let and petitioner agreed to hire the S.S. Yozgat for carriage of a cargo of pig iron. The only argument raised in opposition is that petitioner, by its actions, has waived its right to compel arbitration.

The parties entered into two charter parties on November 30, 1950, arranging for the carriage of two cargoes of pig iron. Subsequently, on February 7, 1951, petitioner and respondent agreed to modify the two charter parties by combining the two cargoes to be carried on the S.S. Yozgat instead of on the two ships previously named. The laydays were also changed but all other terms and conditions remained unchanged and were made applicable to the trip of the S.S. Yozgat.

Respondent was not in fact the owner of the S.S. Yozgat, but had chartered it from Devlet Denizyollari, hereinafter called Devlet, an agency of the Turkish government, which was the owner. During the voyage of the vessel, various disputes arose between petitioner and respondent. In addition, respondent failed to pay the freight and demurrage under its charter party with Devlet. After the ship arrived at Philadelphia Devlet asserted a lien on the cargo and threatened to have it seized. To avoid such seizure, petitioner entered into an agreement dated July 11, 1951, with Devlet to deposit $110,000 in the registry of this court to secure Devlet's lien on the cargo. On the same day Devlet commenced an action in this court against respondent and the cargo, in which petitioner made its claim as owner and deposited the $110,000.

After this, respondent, on July 14, 1951, filed a libel in the United States District Court for the Eastern District of Pennsylvania against Devlet, the S.S. Yozgat and the cargo of pig iron. In this proceeding respondent made a claim for an amount due him from petitioner. Again, petitioner appeared and posted a bond to obtain a release of the cargo from seizure.

As things stand now, respondent has a claim against petitioner under their charter party and petitioner denies any further liability to respondent and makes its own claim against respondent under the charter party. The arbitration clause of the charter party covers any dispute arising between respondent and petitioner. Petitioner alleges that, in accordance with the arbitration agreement, it has demanded arbitration of both disputes, has tendered payment in escrow of the amounts claimed due by respondent and has called upon respondent to deposit in escrow an amount sufficient to satisfy its claim. Petitioner further alleges that it has duly appointed an arbitrator and has requested respondent to do so but that respondent has failed and neglected to do so.

In support of its contention that petitioner has waived its right to compel arbitration, respondent relies on petitioner's agreement with Devlet for posting security, on petitioner's participation in the suit commenced by Devlet in this court, on petitioner's appearance, on July 14, 1951, in the suit initiated by respondent in the Eastern District of Pennsylvania without then seeking arbitration and on the denial of petitioner's motion for a stay pending arbitration in the suit in the Eastern District of Pennsylvania. Respondent also relies on service of a summons dated December 15, 1950 in a suit by petitioner which respondent says was based on a dispute which arose between the two concerning the November 30, 1950 charter parties.

In order to constitute a waiver there must be an intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it. See American Locomotive Co. v. Chemical Research Corporation, 6 Cir., 171 F.2d 115. It does not appear that petitioner has commenced any actions under any of the charter parties involved since December 15, 1950. There is no allegation that petitioner has answered on the merits in any of the pending actions. The only claim of its participation on the merits is its participation in the taking of depositions of witnesses produced in behalf of Devlet in the suit started by Devlet. Aside from the matter of the depositions, petitioner's conduct seems to have been aimed only at freeing its cargo from liens and legal process. Where legal action has been instituted by others, steps taken by a...