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Internaves De Mexico S.A. De C.V. v. Andromeda Steamship Corp.

United States Court of Appeals, Eleventh Circuit

August 1, 2018

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.

          Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 9:16-cv-81719-DMM

          Before MARCUS, FAY, and HULL, Circuit Judges.

          MARCUS, Circuit Judge

         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., 330 F.3d 225, 228 (4th Cir. 2003); see also Soumyadipta Chanda, A Comparison of Rights and Liabilities Under a Charter Party and a Bill of Lading, 24 U.S.F. Mar. L.J. 65, 67-68 (2011).

         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 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 9 U.S.C. § 4.

         While Andromeda does not dispute its obligation to arbitrate, it contends that the district court should have compelled arbitration in ...


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