Vigo S. S. Corp. v. Marship Corp. of Monrovia
| Decision Date | 19 February 1970 |
| Citation | 257 N.E.2d 624,26 N.Y.2d 157,309 N.Y.S.2d 165 |
| Parties | , 257 N.E.2d 624, 1970 A.M.C. 1377 In the Matter of the Arbitration between VIGO STEAMSHIP CORPORATION, Appellant, and MARSHIP CORPORATION OF MONROVIA, Respondent. In the Matter of the Arbitration between VIGO STEAMSHIP CORPORATION,Appellant, and FREDERICK SNARE CORPORATION, Respondent. |
| Court | New York Court of Appeals Court of Appeals |
Christophil B. Costas, New York City, for appellant.
Christ Stratakis and Constantine P. Georgioupoulos, New York City, for respondent.
On July 25, 1966, the petitioner, Vigo Steamship Corporation ('Vigo'), entered into a Time Charter with the Marship Corporation of Monrovia ('Marship'), the owner of the M/V Nicolas Maris, for a period of at least 12 but not more than 15 months. The Time Charter provided that On May 15, 1967, Vigo, as Time Charter Owner, entered into a Voyage Charter with the respondent, Frederick Snare Corporation ('Snare'), for the transport of certain cargo. The Voyage Charter contained an arbitration clause identical to the one contained in the Time Charter between Marship and Vigo. Vigo took possession of the ship in October, 1966 and Snare employed the ship for the carriage of bulk sand, rock and aggregate beginning in May, 1967 and ending in November, 1967. Controversies arose upon completion of the Voyage Charter when the ship was returned to Vigo and was then returned by Vigo to Marship. Marship claimed that Vigo was liable for some $335,000 in damages to the ship and demanded arbitration of the claim. Marship named its arbitrator according to the provisions of the Time Charter, Vigo then demanded arbitration with Snare, claiming that, if Vigo were liable for such damages to Marship, then Snare would be liable to Vigo since Vigo alleged that the damages claimed by Marship were incurred during Snare's Voyage Charter and Snare was, therefore, responsible for them. Vigo also agreed to accept the arbitrator named by Marship as its own.
Vigo moved below for a consolidation of the arbitrations among the three parties on the ground that both arbitrations (Marship-Vigo and Vigo-Snare) concerned common questions of law and fact. Snare cross-moved to compel a separate arbitration between it and Vigo upon the ground that a consolidated arbitration would prejudice its substantial rights. Special Term granted Vigo's motion for consolidation and expressly found that no prejudice would result to Snare by such consolidation. A closely divided Appellate Division reversed and ordered separate arbitrations. (32 A.D.2d 10, 299 N.Y.S.2d 200.) The majority accepted Snare's contention that there were different issues involved in the arbitrations ordered consolidated by Special Term and that the possibility of confusion on the part of the 'commercial men' to be designated as arbitrators would substantially prejudice its rights. The majority also apparently held in the alternative that, since the contracts involved maritime matters, they should be governed by Federal law, in the application of which the Federal courts have purportedly 'consistently refused' to order consolidation. The dissenters disagreed on both grounds.
The order of the Appellate Division should be reversed upon the ground that Special Term properly exercised its discretion in granting the motion to consolidate since Snare failed to sustain its burden of demonstrating that prejudice would result therefrom. That there are common questions of law and fact involved in the two disputes is clear from the very allegations of Vigo's petition and Snare's response to it. Snare sought to demonstrate the lack of such common questions by pointing out that Vigo had voyage chartered the vessel to others prior to the period of Snare's Voyage Charter and that, therefore, it would be forced to defend itself with respect to matters of which it is ignorant and with a party, Marship, with whom it had no privity. However, Vigo's petition specifically alleges that 'Marship has made claim against Vigo in the amount of $335,000 for damage done to...
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