FI LED U. S . COURT OF AP PE ALS E L E V E N T H C IR C U IT A ug. 22, 2008 T HOM AS K. KAHN CL E RK [ DO NO T P UB L I S H] I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 08- 10332 N on -A rgum entC al endar

________________________ D . C. D o c k e tN o . 0 7 - 2 3 0 3 9 - CV - PCH G E D I M E X , S .A ., P la in tif f - A p p e lle e , v ersu s N I D E R A , I N C ., D e f e n d a n t- A p p e lla n t.

________________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f orthe S outhe r n D i s tr i c tof F l or i da

_________________________ ( A u gu s t 22, 2008) B efo re T JO F L A T , B L A C K an d C A R N E S , C i rcu i tJu d g es. P E R C U R I A M: T h is is N id e r a , I n c .’s a p p e a l f r o m th e d is tr ic t c o u r t’s o r d e rd e n y in g itsNi de ra a lso po int s to languag ein Artic le2:2 of GAF TARul e s 1 25 , whic h s e ts f or th 1 t i m e l i m i t at i o n s o nwh e nc l a i m s m ay b ear b i trat e d . Art i c l e2 : 2 i s p r e f a c e d w i thth ep hr a s e : “ In respe ct of all other disputes relatingto the sale of g oods.” Nidera contends that this “relatingto” languag e de mon strate s th epa rtie s’ int e nti on

to a rb itrateany

dis putere late d to thesaleof g oo ds , he reri c e . Wedis a gre e . T hephra se“ re latin gto”is n ot c ontaine d in thearb itratio n c la

us eand its inclusion in Article 2:2 of GAF TA Rules 125 does not expand the scopeof that cla use. 2 m o ti o n to d ism iss o r s tay p ro ce ed in g s to allo w fo r a rb itra ti o n o f G ed im ex , S .A .’ s b r e a c h o f

c o n tr a c t s u it a g a in s t N id e r a . B e tw e e n 2002 a nd 2007 G e di m e x boughta ppr oxi m a t e l y f i f ty l a r ge shi pm ent s of bul k ri ce fr om N i dera . E ac h shi pm entw as go verned by an i dent i ca l w r i t t e n s t a nda r d f

or m c ontr a c t . T hos e c ontr a c t s e a c h c ont a i ne d a c l a us e m a nda t i ng the a rbi tr a t i on of

di s put e s s t e m m i ng f

r om thos e c ontr a c t s be f or e the G r a i n a nd F ee d T ra de A ss oci at i on i n L on do n. T he arbi tra t i on cl ause i n t he se ri es of form c o n tr a c ts b e tw e e n G e d im e x a n d N id e r a p r o v id e s th a t: A n y a n d a ll d is p u te s a r is in g o u t o f o ru n d e rth is c o n tr a c t o ra n y c la im r e ga r di ng the i nt e rpr e t a t i on ore xe c ut i on of thi s c ontr a c ts ha l l be de t e r m i ne d i n a c c or da nc e w i th the G A F T A A rbi tr a t i on R ul e s , N o. 12 5, i n t he edi t i on curr entatthe dat e of thi s c on tra ct , such R ul es ar e i ncorpo ra t ed i nt o and form partof thi s C on tra ctand b ot h p ar t i es h e r e to s h a ll b e d e e m e d to b e f u lly c o g n iz a n t o f

a n d to h a v e e x p r e s s ly ag reed t o th e ap p l i cat i o n o f su ch R u l es. 1 A c c or di ng t o the a l l e ga t i ons i n G e di m e x’ s c om pl a i nt , f ourm onths a f

t e rthe f ir s t r ic e p u r c h a s e N id e r a a n d G e d im e x e n te r e d in to a s e p a r a te o r a l c o n tr a c t in w h ic h N id e r a a g r e e d to s u p p ly G e d im e x w ith e m p ty b a g s a t c o s t to f a c ilita te s h ip m e n t o f

th e r ic e . T h a t o r a l c o n tr a c t d id n o t in c lu d e a n a g r e e m e n t to a rb itr a te3

d is p u te s a r is in g o u t o f

it. O n N o v e m b e r1 , 2 0 0 7 G e d im e x s u e d N id e r a in a F lo r id a s ta te c o u r t, a l l e gi ng tha tN i de r a br e a c he d the or a l c ontr a c tt o s uppl y e m pty ba gs a tc os ta nd w a s unj us t l y e nr i c he d by ove r c ha r gi ng G e di m e x f orthe ba gs . N i de r a r e m ove d the c a s e t o f e de r a l c our ta nd m ove d t o di s m i s s ors t a y the c a s e on the gr ound tha tthe subj ec tm att erof the di sput e w as covered by the arbi tra t i on cl ause i n t he ri ce p u rch ase co n tract s. T he di stri ctcourthear d o ra l ar gu m enton N i dera ’ s m ot i on and d eni ed that m ot i on i n a w ri t t en order. T he courtconcl ud ed thatthe bu l k ri ce cont ra ct s w er e s e pa r a t e a nd i nde pe nde ntf r om the e m pty ba g c ontr a c ta nd, a c c or di ngl y , the a rbi tr a t i on c l a us e f

ound i n the r i c e c ontr a c t s di d nota ppl y t o a di s put e a r i s i ng out o f th e e m p ty b a g c o n tr a c t. W e r e v ie w d e n o v o th e d is tr ic t c o u r t’s o r d e rd e n y in g N id e r a ’s m o tio n to d is m is s o rs ta y G e d im e x ’s a c tio n to a llo w th e p a r tie s to a rb itr a te . S e e g e n e r a lly B es s v. C heck E xp re ss , 29 4 F . 3d 12 98 , 13 02 (11t h C i r. 20 02 ). W hi l e w e r ec og ni ze the s tr ong f

e de r a l pol i c y i n f

a vorof a rbi tr a t i on, s e e ge ne r a l l y S e a boa r d C oa s tL i ne R . R . C o. v. T r a i l e rT r a i n C o. , 690 F . 2d 1343, 1348 ( 11th C i r . 1982) , w e w i l l not c om pe l pa r t i e s t o a rbi tr a t e a di s put e w he r e the pa r t i e s ha ve nota gr e e d t o do s o, K la y v . A ll D e f

e n d a n ts , 3 8 9 F .3 d 1 1 9 1 , 1 2 0 0 ( 1 1 th C ir . 2 0 0 4 ) .4

W e gi ve the phr a s e “ a r i s i ng outof ” i n a n a rbi tr a t i on c l a us e a br oa d r e a di ng, buta s w e e xpl a i ne d i n T e l e c om I t a l i a , S pA v. W hol e s a l e T e l e c om C orp. , 248 F . 3d 11 09 (11t h C i r. 20 01 ): D is p u te s th a t a r e n o t r e la te d

— w ith a t le a s t s o m e d ir e c tn e s s — to perf orm ance of du t i es spec i fi ed by the cont ra ctdo no tcoun tas di s put e s “ a r i s i ng outof

” the c ontr a c t , a nd a r e notc ove r e d by the st andard arbi tra t i on cl ause . . . . H ow ever , w here the di sput e occ urs a s a f ai rl y di re ctre sul tof the performance of cont ra ctual du t i es . . . , then th e d is p u te c a n f

a ir ly b e s a id to a r is e o u t o f o rr e la te to th e c o n tr a c t in que s t i on, a nd a rbi tr a t i on i s r e qui r e d. I d. a t1116. W e a g r e e w ith th e d is tr ic t c o u r t’s c o n c lu s io n th a t th e a rb itr a tio n c la u s e s in the s t a nda r d f

or m r i c e c ontr a c t s do note nc om pa s s G e di m e x’ s c l a i m s r e l a t i ng t o the s e pa r a t e or a l a gr e e m e ntt o s uppl y e m pty ba gs a tc os t . E a c h of thos e a rbi tr a t i on cl ause s w as expl i ci tthati tcovered onl y di sput es ar i si ng ou tof thatpart i cul ar c ontr a c t . T he di s put e N i de r a s e e ks t o a rbi tr a t e i s not“ a f a i r l y di r e c tr e s ul tof

the p e r f o r m a n c e ” o f

a n y o f th e d u tie s s e t f

o r th in th e r ic e p u r c h a s e c o n tr a c ts . S e e id . O ur concl usi on i s s up po rt ed by ou r r ec entdeci si on i n Int ernat i on al U nd erw ri t er s A G v. T r i pl e I : I nt ’ l I nvs . , I nc . , ___ F . 3d ___, N o. 07- 10284, 2008 W L 2717182 ( 11th C i r . J ul y 14, 2008) , w hi c h he l d tha tthe a rbi tr a t i on c l a us e of a n e s c r ow a g r e e m e n t b e tw e e n th e p a r tie s d id n o t a p p ly to a c la im a r is in g o u t o f th e irs e p a r a te bu tre l at ed w ri t t en bo nd com m i t m entbeca use the defendant“ coul d h ave brea chedNidera argues that without the ricepurcha se agree ments, there w ould have be en no 2 consideration for its promise to supply Gedimex with empty

bag s at cost. We disagree . Agre e ingto s e ll s ome on eg oo ds at c os t ma y no t bec omm e rc ia lly

wi se , b ut a

c ontr a c t to do so wo uld besu pp or te d b y c on sid e ra

tio n. On epa

rt y promi se s to pa

y fo r t heg oo ds , th eoth e r p art

y promises to tender the m. Those promises are not insubstantial or illusory , and therefore c on sti tut e su ff

ic ie nt c on sid e ratio n. Se e g e ne rally John so n Enters . o f Ja c ks onvil le , Inc . v . F PL Group, Inc., 162 F .3d 1290, 1311 (11th Cir. 1998). 5 i t s bond c om m i t m e nta nd de f r a ude d [ the pl a i nt i f

f ] e ve n i f the r e ha d be e n no e s c r o w a g r e e m e n t a t a ll.” I d . a t * 1 5

– 1 4 . S im ila r ly , a lth o u g h th e c o n tr a c ts in th is c a s e a r e c le a r ly r e la te d , N id e r a a n d G e d im e x c o u ld h a v e e n te r e d in to th e e m p ty bag con tra ctand t he breac h G edi m ex al l eges coul d h ave occurr ed even i f there w er e no ri ce pu rc hase cont ra ct s. T he arbi tra t i on cl ause s i n t he ri ce pu rc hase s 2 cont ra ct s there fore do no tencom pass the di sput e N i dera se eks t o arbi tra t e. I f th e p a r tie s h a d in te n d e d to a rb itr a te th e e m p ty b a g d is p u te , th e y c o u ld have agree d t o d o so. O r, the part i es coul d h ave m od i fi ed the ri ce pu rc hase form c ontr a c t s t o r e qui r e a rbi tr a t i on of a ny di s put e s a r i s i ng be tw e e n the pa r t i e s . B ut the y di d not . W e w i l l notc om pe l a rbi tr a t i on of a di s put e a r i s i ng outof one cont ra cton the basi s of a n arbi tra t i on cl ause i n a se para t e a nd di st i nctcont ra ct w h e r e th e a rb itr a tio n c la u s e is lim ite d to d is p u te s a r is in g o u t o f th e f ir s t c o n tr a c t. AF F I RME D.