Stathatos v. Arnold Bernstein Steamship Corporation

• Decision Date: 21 January 1950
• Citation: 87 F. Supp. 1007
• Parties: STATHATOS v. ARNOLD BERNSTEIN STEAMSHIP CORPORATION. The MARIA STATHATOS.
• Court: U.S. District Court — Southern District of New York

87 F. Supp. 1007

STATHATOS v. ARNOLD BERNSTEIN STEAMSHIP CORPORATION.

The MARIA STATHATOS.

United States District Court S. D. New York.

January 21, 1950.

Reid, Cunningham & Freehill, New York City (Nicholas J. Healy, 3rd, New York City, of counsel), proctors for petitioners.

Hunt, Hill & Betts, New York City (John W. Crandall, New York City, Robert M. Donohue, New York City, of counsel), proctors for respondent.

IRVING R. KAUFMAN, District Judge.

The Court has before it a petition to compel arbitration which requests as belief that the Court appoint an arbitrator pursuant to Section 5 of the United States Arbitration Act, Title 9 U.S.C.A., and that the Court grant such other and further relief as may seem just and proper. Though Section 4 of the Act is not specifically mentioned, the petition clearly shows that petitioners are requesting firstly, an order directing that arbitration proceed, and secondly, if arbitration is deemed proper, that an arbitrator be appointed because of respondent's unwillingness to appoint one.

Section 4 provides, in substance, that a party aggrieved by the alleged failure, neglect or refusal of another to arbitrate under a written agreement may petition the appropriate court for an order directing the arbitration to proceed in the manner provided for in the agreement. Section 5 provides, in part, that if a party fails to avail himself of the method of naming an arbitrator provided for in an arbitration agreement, the court shall name an arbitrator, upon the application of a party to the controversy.

The petitioners are the owners of the steamship Maria Stathatos. By written charter dated at New York on April 14, 1948, the respondent agreed to hire the ship for "as many consecutive voyages with full cargoes of coal as vessel can perform, tendering ready at loading port for the last trip not later than June 30, 1949, it being understood not more than nine consecutive trips to be performed in any case." The vessel tendered for loading under the charter and made one voyage to Belgium. Upon completion thereof, and on or about June 4, 1948, the respondent informed the petitioners that due to some circumstances it had "no further use for the S/S `Maria Stathatos'".

The charter agreement contained an arbitration clause reading as follows: "3. * * * If any dispute or difference should arise under this Charter, same to be referred to three parties in the City of New York, one to be appointed by each of the parties hereto, the third by the two so chosen, and their decision, or any two of them, shall be final and binding, and this agreement may, for enforcing the same, be made a rule of Court."

The sole issue tendered by the petition and answer is whether or not the controversy between the parties is a dispute arising "under this charter" within the meaning of clause 3, supra. Respondent claims that he cancelled or repudiated the entire charter and that therefore the arbitration clause is not applicable under the doctrine of The Atlanten, 1920, 252 U.S. 313, 40 S.Ct. 332, 64 L.Ed. 586. The authority of The Atlanten has been questioned since the passage of the United States Arbitration Act. See In re Utility Oil Corporation, 2 Cir., 1934, 69 F.2d 524, certiorari denied, 1934, 292 U.S. 655, 54 S.Ct. 866, 78 L.Ed. 1504; Petition of Pahlberg, D.C.S. D.N.Y.1942, 43 F.Supp. 761, 763, appeal dismissed, 2 Cir., 1942, 131 F.2d 968. In any event that case turned on the construction of the particular arbitration clause involved in the case which was markedly different from that before the Court in this case. Kulukundis Shipping Co. v. Amtorg Trading Corp., 2 Cir., 1942, 126 F.2d 978, 992. In The Atlanten the owner of the steamship, before any voyage or performance was made, refused to perform and attempted to use the arbitration clause as a bar to suit. The arbitration clause provided that the Captain of the ship should choose an arbitrator. The Supreme Court said that the refusal to perform was not a dispute of the kind referred to in the arbitration clause because "the withdrawal was before the voyage began and it is absurd to suppose that the captain, who might be anywhere in the world, was to be looked up and to pick an arbitrator in such a case." 252 U.S. at page 316, 40 S.Ct. at page 333, 64 L.Ed. 586.

In the instant case there is no question of repudiation before entering upon performance, since the petitioner did complete one voyage before the charter was terminated. Furthermore, the Court of Appeals in this Circuit looks to the wording of the arbitration clause rather than the time of breach, and has compelled arbitration in a situation where...