INTERNAVES DE MEXICO S.A. DE C.V., Plaintiff - Appellee,
ANDROMEDA STEAMSHIP CORPORATION, AMERICAN NAVIGATION, INC., PEGASUS LINES, LTD. S.A., PANAMA, JAMES KARATHANOS, Defendants - Appellants.
from the United States District Court for the Southern
District of Florida D.C. Docket No. 9:16-cv-81719-DMM
MARCUS, FAY, and HULL, Circuit Judges.
MARCUS, Circuit Judge
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.
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.
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.
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).
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.
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).
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.
Andromeda does not dispute its obligation to arbitrate, it
contends that the district court should have compelled
arbitration in ...