Crystal Pool AS v. Trefin Tankers LTD., No. 12 Civ 9417, 2014 U.S. Dist. LEXIS 64513 (S.D.N.Y. May 9, 2014) [click for opinion]
The parties entered into two "charter parties," which are contracts by which ship owners lease their vessels to merchants. Each charter party contained a provision providing for arbitration in New York City of all "disputes of whatsoever nature arising out of this Charter." The merchant failed to pay six invoices for freight, cost, and demurrage, so the owner commenced arbitration and appointed its arbitrator. When the respondent failed (after twice being asked) to appoint its arbitrator, the owner petitioned the Southern District of New York to compel arbitration.
The court began by noting two independent bases for its jurisdiction over the petition: 28 U.S.C. § 1333(1), which grants federal courts original jurisdiction over any civil case of admiralty or maritime jurisdiction; and the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), 9 U.S.C. §§ 201-08, since the parties were foreign corporations.
The court went on to grant the owner's petition to compel arbitration based on the merchant's repeated failure to respond to the owner's requests that it appoint an arbitrator, and based on the merchant's failure to appear in or respond to the court proceedings. The court ordered the arbitration to take place in New York City and directed the merchant to appoint an arbitrator within 15 days of the order, but stated that if the merchant did not appoint an arbitrator by then, the court would appoint one on its behalf pursuant to the appointment authority under the Federal Arbitration Act (9 U.S.C. § 5) and the New York Convention (9 U.S.C. § 206).