Internaves de Mexico S.A. de C v. v. Andromeda Steamship Corporation
Opinion
*1090 This case arises out of a battle over where the parties have agreed to arbitrate this admiralty and maritime dispute. Andromeda Steamship Corporation and Internaves de Mexico s.a. de C.V. entered into a shipping contract (the "Contract") whereby Andromeda agreed to furnish Internaves with a vessel to transport an electric transformer from Brazil to Mexico. Internaves claimed that Andromeda failed to tender the vessel on the agreed-upon date, while Andromeda countered that Internaves never delivered the transformer to the vessel. The Contract unambiguously required the parties to submit their dispute to arbitration. However, the Contract contained conflicting provisions regarding where the parties agreed to arbitrate. The district court could not ascertain the site of arbitration from the agreement itself and, therefore, resorted to the statutory default forum, compelling arbitration in its own district-the Southern District of Florida.
Andromeda appealed, arguing that the district court had erred in proclaiming the Contract hopelessly ambiguous as to the selection of a forum. Had the court waded through the Contract's interpretive tangles, Andromeda says, it would have discovered the parties' mutually agreed-upon intent to arbitrate in London, where it claims the arbitration must be held. Internaves suggests, however, that due to the Contract's murkiness, the district court properly ordered arbitration in Miami.
The Contract hardly represents a model of clarity. Nevertheless, we agree with Andromeda and discern from the document an agreement to arbitrate in London. Accordingly, we reverse the judgment of the district court and remand with instructions to compel arbitration in London under English law.
I.
A.
Andromeda and Internaves entered into the Contract, a charter party agreement, in June 2016. A "charter party" is simply a contractual arrangement whereby a ship owner agrees to lend a ship to a charterer for the transportation of goods from one port to another.
See
Hawkspere Shipping Co. v. Intamex, S.A.
,
The Contract is divided into two parts. Part I contains terms specific to the parties' particular transaction. Part II includes general boilerplate terms that are typically incorporated into shipping contracts of this kind. Part I includes Box 25, labeled "Law and Arbitration." Box 25 instructs, "[S]tate 19(a), 19(b) or 19(c) of Cl[ause] 19; if 19(c) agreed also state Place of Arbitration (if not filled in 19(a) shall apply)." Clause 19, in turn, also labeled "Law and Arbitration," appears in Part II of the agreement. Clause 19 is divided into sub-clauses 19(a) through 19(d). Affixed to each sub-clause is an asterisk, and the asterisk notation reads, "(a), (b) and (c) are alternatives; indicate alternative agreed in Box 25." Clause 19(a) provides for arbitration in London under English law and imposes additional terms, including a scheme for appointing arbitrators. Clause *1091 19(b) calls for arbitration in New York under U.S. law and prescribes similar supplemental conditions. Clause 19(c) reads this way: "Any dispute arising out of this Charter Party shall be referred to arbitration at the Place indicated in Box 25, subject to the procedures applicable there. The laws of the place indicated in Box 25 shall govern this Charter Party." Finally, 19(d) explains that if Box 25 is not filled in, then 19(a) governs. In sum, Clause 19 of the Contract, located in Part II, provides a list of forum alternatives and instructs the parties to indicate their selection among those alternatives in Box 25. Box 25, located in Part I, also directs the parties to write their selection among Clause 19's options within that space.
Inside Box 25, the parties clearly wrote these words: "London arbitration, English Law." However, in Clause 19, the parties crossed out 19(a), 19(c), and 19(d), leaving only 19(b)-New York arbitration under U.S. law-unstruck. Thus, while the parties wrote in the words "London arbitration, English Law" in Box 25 in Part I, they signaled some desire to arbitrate in New York under U.S. law in Part II. Finally, above the signature page, the Contract reads, "It is mutually agreed that this Contract shall be performed subject to the conditions contained in this Charter Party which shall include PART I as well as PART II. In the event of a conflict of conditions, the provisions of Part I shall prevail over those of Part II to the extent of such conflict" (the "Conflict Clause") (emphasis added).
B.
In October 2016, Internaves sued Andromeda in the Southern District of Florida for breach of contract, conversion, and fraud. Internaves claimed that, although it prepaid Andromeda, Andromeda failed to tender the vessel on the agreed-upon date, in violation of the Contract. Andromeda moved to compel arbitration of the dispute in London under English law pursuant to the selection the parties made in Part I, Box 25. The district court granted Andromeda's motion in part, compelling arbitration, but concluded that it could not ascertain from the terms of the agreement where the parties had agreed to arbitrate the dispute. The court observed that, because Part I stipulated "London arbitration, English Law," while Part II indicated a contrary agreement to arbitrate any dispute arising from the Contract in New York under U.S. law, the Parts were hopelessly in conflict. The court continued this way: "This conflict is compounded by ambiguities in the very provisions ostensibly designed to resolve internal inconsistencies." Elaborating, the court recognized that, under the Conflict Clause, in the event of conflict, Part I superseded Part II. However, the court also observed that 19(c), "which also provide[d] for the supremacy of Part I," was crossed out. In light of that puzzle, the district court could not determine whether the Conflict Clause remained applicable to the instant dispute. Accordingly, it held that the parties had failed to provide for a specific arbitral forum and, therefore, it could compel arbitration only within its own district pursuant to
While Andromeda does not dispute its obligation to arbitrate, it contends that the district court should have compelled arbitration in London, as the parties had written into Box 25.
Andromeda timely appealed to this Court.
II.
Plainly, the site of arbitration turns on interpretation of the Contract's arbitration clauses, which we review de novo .
*1092
Inetianbor v. CashCall, Inc.
,
A.
Issues arising out of arbitration agreements are generally resolved by contract-law principles, pursuant to which we attempt to ascertain the parties' intent through the words they use. The Federal Arbitration Act (FAA) provides that written arbitration agreements in "any maritime transaction" "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract."
International arbitration agreements are governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the "New York Convention," which the United Nations Economic and Social Council adopted in 1958.
Lindo v. NCL (Bahamas), Ltd.
,
Notably, "[w]hen a contract is a maritime one, and the dispute is not inherently local, federal law controls the contract interpretation."
Norfolk S. Ry. Co. v. Kirby
,
Five general principles of contract interpretation apply here. First, "[i]t is well settled that the actual language used in the contract is the best evidence of the intent of the parties and, thus, the plain meaning of that language controls."
Rose v. M/V "GULF STREAM FALCON"
,
Thus, when interpreting an international arbitration agreement, we ascertain the parties' intent through plain contractual language; we work to interpret the contract harmoniously to avoid conflict and give meaning to all of the provisions; we are obliged to apply any contractual clauses designed to resolve intra-contractual conflicts; we favor the specific terms over the more general language; and we strive to give the contract coherent meaning if we can, rather than capitulate in the face of apparent ambiguity.
B.
As we see it, application of these principles yields the conclusion that the parties agreed to arbitrate their dispute in London. The Conflict Clause unambiguously establishes the superiority of Part I's enumeration of "London arbitration, English Law" over Part II's manifestation of the parties' preference for a New York forum. Moreover, Box 25's heading and instructions, coupled with Clause 19's *1094 asterisks, render Box 25 the Contract's authoritative forum-selection clause. Insertion of the written words "London arbitration, English Law" within that provision further evinces the parties' intent to arbitrate in London. The parties specifically wrote "London arbitration, English Law" into the Contract, whereas any indication of the parties' willingness to arbitrate in New York appears only among boilerplate script, and in that regard only by striking a provision with a line. The rule of construction subordinating general terms to specific ones also supports the selection of the London forum.
In Part I, the parties demonstrated their mutual desire to arbitrate in London by writing in their selection of "London arbitration, English Law" in Box 25, labeled "Law and Arbitration." In Part II, the parties indicated some inclination toward arbitrating in New York by crossing out all of Clause 19's sub-clauses except for 19(b), which, as we have already noted, provides for New York arbitration under U.S. law. Plainly, by choosing different arbitral forums in Parts I and II-by writing in "London" in Part I and leaving 19(b) operative in Part II-the parties created an inter-Part conflict. Yet these parties anticipated and sought to resolve any such conflict by including a Conflict Clause, which, again, reads this way: "In the event of a conflict of conditions, the provisions of Part I shall prevail over those of Part II to the extent of such conflict." When parties author conflicting contractual provisions, but expressly provide for a contractual mechanism to resolve any conflict, we are bound by the mechanism they have chosen.
See
Columbia Cas.
,
Additionally, Box 25's heading and instructions, along with Clause 19's asterisks, militate in favor of London arbitration. Box 25, labeled "Law and Arbitration," instructs, "[S]tate 19(a), 19(b) or 19(c) of Cl. 19; if 19(c) agreed also state Place of Arbitration (if not filled in 19(a) shall apply)." Turning to Clause 19, also labeled "Law and Arbitration," an asterisk appears alongside sub-clauses 19(a) through 19(d), and the asterisk notation explains, "(a), (b), and (c) are alternatives; indicate alternative agreed in Box 25." The parties have designated in the Contract that Box 25 is the authoritative space within which to ascertain their forum selection. And inside that space, the parties wrote their preference. Box 25's "London arbitration, English Law" supersedes Clause 19's indication of their preference of a forum. It is true that the parties neglected to stipulate one of "19(a)," "19(b)," or "19(c)" in Box 25, as the Contract had instructed. Nonetheless, the parties' omission essentially amounts to a small error that cannot undermine their manifest intent, as they wrote it, to arbitrate in London under English law.
See
Georgia R.R. Bank & Tr. Co.
,
The canon of contract interpretation elevating specific terms over the more general ones also supports the selection of London. The parties' particular insertion of "London arbitration, English Law" prevails over the crossed-out boilerplate terms.
See
United States v. Pielago
,
Internaves advances several additional objections. First, it claims that, by crossing out 19(c), the parties rendered Box 25 ineffective, arguing that "[i]f the parties chose Paragraph 19(c), it would have provided for the selection in [B]ox 25 to prevail over the selection of London or New York. By striking out Paragraph 19(c) of Part II, [Andromeda] affirmatively rejected the effect of any designated forum within Part I and thereby exalted its choice in Part II over Part I and undermined the [Conflict Clause]." The district court agreed, similarly reasoning that, because 19(c) "provide[d] for the supremacy of Part I," having struck 19(c), the parties suggested that the Conflict Clause was inapplicable and Box 25 irrelevant.
Again, 19(c) reads, "Any dispute arising out of this Charter Party shall be referred to arbitration at the Place indicated in Box 25, subject to the procedures applicable there. The laws of the place indicated in Box 25 shall govern this Charter Party." Clause 19(c) does not "provide[ ] for the supremacy of Part I." Rather, what 19(c) does is offer a "write-in" forum option. Since parties to charter party agreements typically choose to arbitrate in London or New York, 19(a) and 19(b) provide shortcuts for selecting those forums.
See
Gu Weixia & Joshua A. Lindenbaum,
The NYPE 93 Arbitration Clause: Where Ends the Open-End?
,
Internaves also points to
Bauhinia Corp. v. China National Machinery & Equipment Import & Export Corp.
,
In case an arbitration is necessary and is to be held in Peking, the case in dispute shall then be submitted for arbitration to the Foreign Trade Arbitration Commission of the China Council for the Promotion of International Trade, Peking....
In case the Arbitration is to take place at [BLANK] either party shall appoint one arbitrator, and the arbitrators thus appointed shall nominate a third person as umpire, to form an arbitration committee.....
*1096
This case is different. Here, rather than providing no forum selection, the parties provided conflicting forum selections. But here, the parties created a contractual mechanism to resolve any ambiguity or conflict by declaring Part I superior to Part II in the event of conflict, and by designating Box 25 the conclusive forum selection provision. Thus, unlike in Bauhinia , in this case the parties provided for an arbitration forum by writing "London arbitration, English Law" in the Contract's superseding and authoritative forum-selection clause.
Finally, Internaves argues for the first time on appeal that the Contract retains some ambiguity because Part I includes an internal inconsistency. Specifically, in Box 22, which is located in Part I and labeled "General Average to be adjusted at (Cl. 12)," the parties wrote "NEW YORK-USA." Clause 12, in turn, labeled "General Average and New Jason Clause," provides that "[g]eneral average shall be adjusted, stated and settled according [to] York-Antwerp rules 1994 or any subsequent modification thereof." Therefore, Internaves reasons, even if the Conflict Clause resolves conflicts between the Parts, the Contract still contains an intractable conflict within Part I itself, between Box 25 (which calls for London arbitration) and Box 22 (which provides for general-average adjustment in New York).
Again, we are unpersuaded. First, Internaves did not raise the argument in the district court, and we need not consider it on appeal.
Access Now, Inc. v. Sw. Airlines Co.
,
But even if we were to consider the claim for the first time on appeal, it still would not help Internaves. The "ancient maritime doctrine" of general average holds that, if goods are thrown overboard in order to save a ship from impending catastrophe, the passenger who sacrificed his property for the common good is entitled to reimbursement by pro rata contributions from the other passengers onboard.
See
*1097
Orient Mid-E. Lines, Inc. v. Shipment of Rice on Bd. S.S. Orient Transporter
,
The parties' insertion of "NEW YORK-USA" in Box 22 does not create an inconsistency within Part I. Mindful of our obligation to "give effect to all [the Contract's] provisions," and to discern incompatibility among them only if they cannot be construed harmoniously, we read Part I as requiring general-average adjustment in New York under York-Antwerp Rules pursuant to Box 22, and arbitration of all other disputes in London under English law pursuant to Box 25.
See
In re FFS Data, Inc.
,
The only remaining question is which terms will govern the parties' arbitration. Recall that sub-clause 19(a) provides for arbitration in London under English law and prescribes supplemental conditions, including arbitration "in accordance with the arbitrations Acts 1950 and 1979 or any statutory modification or re-enactment thereof for the time being in force," and rules controlling the appointment of arbitrators. Yet the parties did not write "19(a)" in Box 25. Rather, they wrote only "London arbitration, English Law." "[C]ourts must take care not to alter or go beyond the express terms of the agreement, or to impose obligations on the parties that are not mandated by the unambiguous terms of the agreement itself."
Red Ball Interior Demolition Corp. v. Palmadessa
,
In short, because the parties' intention to arbitrate in London is discernible from the very terms they wrote into the Contract, the parties "provided for" a forum, which the district court was obliged to recognize and uphold. Accordingly, we reverse and remand with instructions to compel arbitration in London under English law.
REVERSED AND REMANDED
"[T]he decisions of the United States Court of Appeals for the Fifth Circuit ... as that court existed on September 30, 1981, handed down by that court prior to the close of business on that date, shall be binding as precedent in the Eleventh Circuit."
Bonner v. City of Prichard
,
Reference
- Full Case Name
- INTERNAVES DE MEXICO S.A. DE C v. Plaintiff-Appellee, v. ANDROMEDA STEAMSHIP CORPORATION, American Navigation, Inc., Pegasus Lines, Ltd. S.A., Panama, James Karathanos, Defendants-Appellants.
- Cited By
- 12 cases
- Status
- Published