Case Law
United States / 26 June 1989 / United States, U.S. Court of Appeals, Fifth Circuit / E.A.S.T., Inc. of Stamford, Conn. v. M/V Alaia / 88-3136
Country | United States |
Court | United States, U.S. Court of Appeals, Fifth Circuit |
Date | 26 June 1989 |
Parties | E.A.S.T., Inc. of Stamford, Conn. v. M/V Alaia |
Case number | 88-3136 |
Applicable NYC Provisions | I | II | I(3) | II(3) |
Languages | English |
Summary | E.A.S.T (“EAST”) agreed to charter the M/V ALAIA (“ALAIA”), owned by Advance, Co. (“Advance”), a Liberian corporation. The charter party, which was governed by English law, contained an arbitration clause providing for arbitration in London. A dispute arose and EAST moved to compel arbitration in the United States District Court for the Eastern District of Louisiana under the Federal Arbitration Act (“FAA”). The District Court compelled arbitration and ordered each of the parties to post security for arbitration. Advance appealed, arguing, inter alia, that the court erred in holding that in rem jurisdiction was a sufficient basis on which to refer the parties to arbitration and furthermore, that that pre-arbitration attachment of the ALAIA would be inconsistent with the NYC. EAST argued that the NYC was not applicable as Advance was a corporation of a non-signatory state to the NYC. The United States Court of Appeals for the Fifth Circuit affirmed the decisions of the lower court and dismissed the appeal. The Court first found that when the United States adopted the NYC, it chose the option available under Article I(3) NYC to apply the NYC on the basis of reciprocity, i.e. to apply it only to those awards made in the territory of another contracting state. However, it determined that since arbitration was to be conducted in a contracting state to the NYC (Great Britain) and thus the NYC would be applicable irrespective of Advance’s Liberian nationality. The Court rejected Advance’s argument that the District Court did not have jurisdiction to refer the parties to arbitration. It held that under Article II(3) NYC and Section 206 of the FAA (which gives effect to Article II(3) NYC), the District Court had the authority and duty to refer the parties to arbitration. It further decided that it need not decide the question of whether the district court could refer the parties to arbitration on the basis of in rem jurisdiction since Advance had submitted to the court’s in personam jurisdiction. It also found that pre-arbitration attachment of the vessel was not inconsistent with the NYC. |
Attachment (1)
Original Pending Adobe Acrobat PDF |