Daebo International Shipping Co. v. Americas Bulk Transport (BVI) Ltd., No. 12 Civ. 7960 (S.D.N.Y. May 17, 2013) [click for opinion]
A dispute arose between Daebo Shipping and Americas Bulk Transport ("ABT"), and the parties filed claims against each other for breach of contract. Pursuant to the charterparty, the parties submitted the dispute to arbitration in London. Daebo Shipping prevailed on its claim, receiving an award of $306,234.80, the full amount of its claim, plus interest and costs. The tribunal rejected ABT's counterclaim.
During the pendency of the arbitration proceedings, Daebo Shipping merged with Daebo International, and Daebo Shipping ceased to exist under Korean law. The tribunal did not learn of the merger until Daebo International submitted a request to the panel to either correct the award or issue a supplementary award stating that Daebo International was entitled to enforce the award. The panel denied Daebo International's request, determining that it lacked power to correct the award or to issue a supplementary award. Daebo International then filed a petition to confirm the arbitral award in New York federal court. Shortly thereafter, Daebo Shipping purported to file an amended petition to confirm. ABT successfully moved to dismiss the amended petition because Daebo Shipping was an improper party plaintiff. Daebo International filed an amended petition, and cross-motions for summary judgment ensued.
The court granted summary judgment in favor of ABT, noting that Section 207 of the Federal Arbitration Act provides that "any party to the arbitration" may apply for confirmation of an award. Although Daebo International appeared to be a successor in interest to Daebo Shipping, the arbitration agreement did not include any clause providing that an award would inure to a party's successors and assigns. Moreover, the court was disturbed that Daebo International previously had requested modification of the award from the panel, which was denied. Under these circumstances, the court concluded that Daebo International was attempting to obtain relief from the court that the panel previously had denied, and that Daebo International essentially was seeking a modification of the award, not confirmation of the award. The court determined that, because Article V of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) provides that any request for modification of an award must be brought before a court at the seat of the arbitration, the enforcing court lacks jurisdiction to modify the award. The arbitration was seated in London, so an English court possessed primary jurisdiction and was the proper forum to hear a request to modify an arbitral award.
The court thus dismissed the amended petition to confirm and suggested that Daebo International pursue its requested relief in an English court.