Opinion ID: 782409
Heading Depth: 2
Heading Rank: 3

Heading: New York Arbitration

Text: 9 Klaveness thereafter began arbitration in New York seeking, inter alia, full indemnification from Duferco for the London award to Lifedream that it was obligated to pay, as well as for attorneys' and arbitrators' fees from both arbitrations. At the arbitration hearing, Klaveness maintained that the warranty in its charter with Duferco — stating that it would load at one(1) safe port/safe berth Taranto — was similar to the one included in the charter between Klaveness and Lifedream, which provided that the vessel trade via safe port(s), safe berth(s), [and] safe anchorage(s), and therefore declared that vouching-in had been appropriate and that Duferco could thus be bound by the London award based on collateral estoppel principles. 10 Duferco did not challenge the findings of the London arbitrators, but it countered that collateral estoppel could not apply because significant differences between the time and voyage charters made the sweep of Klaveness' liability under its time charter with Lifedream far greater than Duferco's liability under its voyage charter with Klaveness. Essentially, Duferco asserted the Klaveness-Duferco voyage charter specifically waived any safe-berth warranty. Under settled principles of maritime law, a voyage charter that names a specific port relieves the charterer of liability for damage arising from conditions at that port so long as those conditions were reasonably foreseeable. See Tweedie Trading Co. v. N.Y.&B. Dyewood Co., 127 F. 278, 280-81 (2d Cir.1903); see also 2A Benedict on Admiralty § 175, at 17-26 (7th ed. 2002). Since the named port of Taranto had predictable seasonal swell conditions, Duferco insisted the safe-berth warranty had been waived, and it therefore had no liability for damages occurring there. 11 Duferco further averred that it should not be bound by any findings of the London arbitrators because its interests could not have been fully and fairly represented in the London arbitration. It argued that since Klaveness could not advance the named-port argument, as Duferco could have, to relieve itself of liability, Klaveness could not have fully and fairly represented its interests in the London arbitration. 12 A divided panel of the New York arbitrators found for Klaveness in an arbitration decision and award entered on April 18, 2001 (New York award). The majority found that Klaveness did not waive the safe-berth warranty by agreeing with Duferco to load the ship at Taranto, and that the safe-berth warranties of both charters were sufficiently identical for vouching-in. The panel therefore found Duferco to be bound by the outcome of the London arbitration with respect to the damage portion of the London award and ordered it to indemnify Klaveness for the amount Klaveness paid Lifedream in satisfaction of the London award. 13 The panel went on to rule nonetheless that collateral estoppel principles prevented Klaveness from collecting attorneys' and arbitrators' fees from Duferco for the London arbitration. The majority reasoned, somewhat confusingly, that [i]nasmuch as the London arbitrators did not consider the safe-berth warranties of the voyage charter, as properly not before them, no `previous determination' had been made, and therefore, Klaveness must not be permitted to now use the London award against Duferco offensively for vouching-in or collateral estoppel purposes. On its own motion, the arbitration panel awarded Klaveness $120,000 as an allowance toward attorneys' fees and expenses for the New York arbitration. The panel majority made several other determinations of liability related to events at the port of New Orleans. Neither party contests these additional determinations and, in any event, they are not relevant to this appeal.