Opinion
CIVIL ACTION NO. 01-0375, SECTION "K"(3)
February 25, 2002
MINUTE ENTRY
Before the Court is a Motion to Dismiss Third-Party Complaint or, Alternatively, to Stay Pending Arbitration, filed by Ispat Industries Limited, ("Ispat") (Doc. No. 5). Having reviewed the pleadings, memoranda and the relevant law the Court finds that the Third-Party Complaint should be stayed for the reasons that follow.
Background
It is undisputed that on December 17, 1999, Ispat Industries Limited, the provider of galvanized steel coil cargo at issue herein, and Metall und Rostoff Shipping RSA (Pty. Ltd. ("MLVR") entered a charter party for the carriage of the hot rolled coils from India to New Orleans. MLJR. MUR then contracted to Bulkhandling A/S, time chartered owner of BLEST MARINE to carry the cargo. The subject cargo was discharged from BLEST MARINE at New Orleans on February 19, 2000.
On February 9, 2001, the receiver Thyssen, Inc. commenced this litigation against MUR, BLEST MARINE'S owner Baron Marine Shipping S.A. ("Baron Marine"), together with her manager and operators Koyo Line Ltd. and Fist Marine Service Co., Ltd. for alleged damage to the cargo. MUR was not served with these pleadings until February 20, 2001, one day beyond the anniversary of the final discharge of the cargo from the BLEST MARINE. MUR filed its Answer, Cross-Claim and Third-Party Complaint ("Third-Party Complaint") on May 10, 2001, in which MLTR seeks recovery from Ispat based on alleged breaches of the GENCON form voyage charter party between MUR and Ispat dated December 17, 1999.
In the Third-Party Complaint, MUR alleges that (1) Ispat's cargo was not in good condition prior to loading, (2) and/or was negligently loaded and/or (3) unloaded by stevedores hired by Ispat and therefore, Thyssen's claim for cargo damage is the "responsibility of Ispat and not MUR, all as is provided in the GENCON form charter party dated December 17, 1999, between MUR and Ispat." Third-Party Claim at 7, ¶ 7. Ispat seeks the dismissal of the MUR claims so that they can be resolved by arbitration, or alternatively, to enter an order staying litigation of this claim pending arbitration based on Clause 9 of the Rider Clauses to the Charter Party which provides the following:
THE CHARTER PARTY TO BE CONSTRUED IN ACCORDANCE WITH ENGLISH LAW. ANY DISPUTE ARISING UNDER THIS CHARTER PARTY TO BE REFERRED TO ARBITRATION IN LONDON PURSUANT TO THE LAWS RELATING TO ARBITRATION THEREIN FORCE, BEFORE A BOARD OF THREE ARBITRATORS CONSISTING OF ONE ARBITRATOR BEING APPOINTED BY OWNERS, ONE BY THE CHARTERERS AND THE THIRD ARBITRATOR BY THE TWO SO CHOSEN SO THE DECISION OF ANY TWO OF THE THREE ARBITRATORS ON ANY POINTS SHALL BE FINAL AND BINDING ON ALL PARTIES CONCERNED ENGLISH LAW TO APPLY.
Exhibit A to Motion to Dismiss. As such, because of the strong federal policy in favor of enforcing arbitration agreements, Ispat seeks dismissal or a stay of its claims.
MUR opposes the motion contending that because that same Clause 09 of the Charter Party provides, ". . . THE ARBITRATORS TO BE APPOINTED WITHIN 12 MONTHS AFTER THE FINAL DISCHARGE AND WHERE THE PROVISION IS NOT COMPLIED WITH, THE CLAIM SHALL BE EXTINGUISHED AND CEASE TO EXIST," Id. Thus, MUR contends that it will "not have its day in court" should the Court grant this motion.
Analysis
The Federal Arbitration Acts states:
If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court . . . shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.9 U.S.C. § 3. The United States Court of Appeals has interpreted this statute as requiring "the court to first determine whether there is a written agreement to arbitrate between the parties and whether any of the issues raised are withing the reach of the agreement." Texaco Exploration and Production Co. v. AmClyde Engineered Products Co., Inc., 243 F.3d 906, 909 (5th Cir. 2001). This matter is certainly subject to the arbitration agreement. Furthermore, Ispat has not actively participated in this lawsuit or taken other action inconsistent with its right to arbitrate such that it could be said that Ispat was in default. Alsem Indus., Inc. v. M/V NICK, 1999 WL 1277542 (E.D.La. Dec. 21, 1999). See ND Fashions, Inc. v. DHJ Indus., Inc., 548 F.2d 722, 728 (8th Cir. 1976).
Furthermore, it is clear that whether this claim is time-barred under the arbitration agreement is one for the London arbitration.
"[I]n passing upon a § 3 application for a stay while the parties arbitrate, a federal court may consider only issues relating to the making and performance of the agreement to arbitrate." . . . "[M]atters of procedural arbitrability, such as, inter alia, whether the request for arbitration was timely under the arbitration agreement, are for the arbitrator to decide." (citations omitted)Japan Sun Oil Co., Ltd. v. M/V MAASDIJK, 864 F. Supp. 561, 568 (E.D.La. 1994) and cases cited therein.
While granting the motion to stay, the Court retains its jurisdiction over the dispute and its authority to address matters unresolved through arbitration, if any, once the London proceedings are concluded. Id. Accordingly,
IT IS ORDERED that the Motion to Dismiss Third-Party Complaint or, Alternatively, to Stay Pending Arbitration is DENIED with respect to dismissal but GRANTED with respect to a stay as to the Third-Party Complaint against Ispat Industries Limited.