Transnitro, Inc. v. M/V Wave

• Citation: 943 F.2d 471
• Decision Date: 26 August 1991
• Docket Number: Nos. 90-2448,90-2461,s. 90-2448
• Parties: TRANSNITRO, INCORPORATED, Plaintiff-Appellee, v. M/V WAVE, her engines, boilers, tackle, etc., in rem, Defendant-Appellant. TRANSNITRO, INCORPORATED, Plaintiff-Appellant, v. M/V WAVE, her engines, boilers, tackle, etc., in rem, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 471

943 F.2d 471

1991 A.M.C. 2714

TRANSNITRO, INCORPORATED, Plaintiff-Appellee, v. M/V WAVE, her engines, boilers, tackle, etc., in rem,

Defendant-Appellant.

TRANSNITRO, INCORPORATED, Plaintiff-Appellant, v. M/V WAVE, her engines, boilers, tackle, etc., in rem,

Defendant-Appellee.

Nos. 90-2448, 90-2461.

United States Court of Appeals, Fourth Circuit.

Argued May 8, 1991.

Decided Aug. 26, 1991.

Jeremy John Oliver Harwood, Healy & Baillie, New York City, argued (Carter T. Gunn, Vandeventer, Black, Meredith & Martin, Norfolk, Va., on brief), for defendant-appellant.

Richard Ivan Gulick, Norfolk, Va., argued (Alfred J. Will, Badiak, Will & Maloof, New York City, on brief), for plaintiff-appellee.

Before RUSSELL, Circuit Judge, STAKER, District Judge for the Southern District of West Virginia, sitting by designation, and KAUFMAN, Senior United States District Judge for the District of Maryland, sitting by designation.

OPINION

FRANK A. KAUFMAN, Senior District Judge:

Springwave Marine Limited, owner of the vessel, M/V WAVE (owner), entered into a charter party with Transnitro, Inc. (charterer) pursuant to which the vessel loaded a cargo of prilled urea in Holland, for shipment to and unloading in Saginaw, Michigan. Because of difficulties in unloading at that Great Lakes port, the vessel proceeded to Norfolk, Virginia where it accomplished the cargo's discharge. Then, the charterer filed suit in rem against the vessel in the United States District Court for the Eastern District of Virginia, Norfolk Division, alleging breach of the charter party and attaching the vessel. The latter was released after the owner filed a Release Bond in the amount of $200,000.00. Following the filing by the owner of an answer to the charterer's complaint, the matter was referred to an arbitration panel by the Norfolk district court, and all further proceedings in that court were stayed pending arbitration pursuant to the terms of the charter party. The arbitrators awarded detention damages, attorney's fees and costs of the Release Bond to the owner, as well as $57,676.71 of interest on the amount of the bond at the annual rate of 9.5%. Thereafter, the charterer paid the detention damages, the attorney's fees and the cost of the Release Bond, but not the interest.

Following the announcement of the arbitration award, correspondence ensued among counsel for the parties, in the course of which counsel for the owner advised counsel for the charterer that counsel for the owner had not known, at the time of the arbitration, that the collateral for the Release Bond had been placed by the owner in an interest bearing account and had earned $34,000 of interest. However, during that correspondence, counsel for the owner also stated that the owner had incurred a number of expenses relating to the bond, including premiums and commissions, totaling $28,147.01, which had not been claimed by the owner during the arbitration proceeding. The owner suggested that the charterer receive credit for the $34,000.00 interest item and that the owner should get credit for the $28,147.01 of expenses. In that context, the owner would have received $5,852.99 less than it would have received under the arbitration award itself.

The arrangement suggested by the owner was not accepted by the charterer. Accordingly, after paying all parts of the arbitration award except the interest on the bond in the amount of $57,676.71, the charterer filed suit in the United States District Court for the Southern District of New York, seeking to modify and to correct the arbitration award as to the interest element. That court transferred the case to the United States District Court for the Eastern District of Virginia, at Norfolk, where it was consolidated with the original Norfolk case.

I.

9 U.S.C. § 11, a part of the Federal Arbitration Act, which is applicable in this admiralty dispute, provides as follows:

In either of the following cases the United States court in and for the district wherein the award was made may make an order modifying or correcting the award upon the application of any party to the arbitration--

(a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.

(b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.

(c) Where the award is imperfect in matter of form not affecting the merits of the controversy.

The order may modify and correct the award, so as to effect the intent thereof and promote justice between the parties.

Acting pursuant to that statutory provision, the Norfolk district...