Cruise Ship Law

THE RICE COMPANY (SUISSE), S.A., Plaintiff-Appellant v. PRECIOUS FLOWERS LIMITED; IBN AGROTRADING GMBH; M/V NALINEE NAREE, her engines, boilers and tackle, Defendants-Appellees
UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
2008 U.S. App. LEXIS 6918
April 2, 2008, Filed

PROCEDURAL POSTURE: Plaintiff shipper appealed from the United States District Court for the Southern District of Texas in the shipper's action against a vessel owner, the disponent owner, and the vessel, seeking damages and making a motion to compel arbitration in New York and to stay the proceedings pending arbitration.



OVERVIEW: The shipper bought rice to ship to Togo. It voyage chartered the vessel from the disponent owner to ship the rice, but the vessel allegedly had unseaworthy hatch covers and the rice was damaged. The voyage charter required arbitration in New York, and the bill of lading that would have issued, had the vessel not sailed early and the cargo not been damaged due to a storm, incorporated the terms of the voyage charter. The district court concluded that the New York arbitration clause of the voyage charter did not bind the vessel's owner but rather the disponent owner, and that there was no contract binding the vessel owner to New York arbitration. Nor did the in rem fiction of the vessel as defendant bind the vessel owner. The instant court concluded that the parties to the voyage charter unambiguously structured their relationship such that the vessel owner was not a party to the voyage charter. Further, the vessel owner was not bound by the New York arbitration clause incorporated into the bill of lading, given the terms of the New York arbitration clause. Finally, the court could not force the vessel owner into an arbitration agreement that the vessel owner did not sign.



OUTCOME: The judgment was affirmed.