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

Heading: London Arbitration

Text: 5 Lifedream, as a result of the difficulties encountered in Taranto, sought arbitration against Klaveness in London to recover for the damages and extra costs incurred (London arbitration). The London arbitrators found Klaveness liable for these damages because it had breached the safe-berth warranty by mooring the ARISTIDIS where sea conditions made the port unsafe. 6 Klaveness moved to vouch Duferco into the London arbitration to obtain indemnification. Vouching-in is a common law procedural device that allows a party to arbitration to join a nonparty alleged indemnitor, referred to as the vouchee, by notifying the nonparty of the pendency of an arbitration that might obligate the vouchee to indemnify the defendant. See SCAC Transp. (USA), Inc. v. S.S. Danaos, 845 F.2d 1157, 1161-62 (2d Cir.1988); see also Washington Gaslight Co. v. Dist. of Columbia, 161 U.S. 316, 329-30, 16 S.Ct. 564, 40 L.Ed. 712 (1896); Universal Am. Barge Corp. v. J-Chem, Inc., 946 F.2d 1131, 1138 (5th Cir.1991). Vouching-in is used where the vouchee cannot be impleaded because of defects in personal jurisdiction. The purpose of this legal device is to avoid duplicative litigation and the attendant possibility of inconsistent results. SCAC Transp. (USA), Inc., 845 F.2d at 1162. 7 Once notified, the vouchee has the option of joining the arbitration to defend the action. If the vouchee refuses to join, it may nonetheless be bound by the result in any subsequent litigation by principles analogous to collateral estoppel. Washington Gaslight, 161 U.S. at 329-30, 16 S.Ct. 564. For the vouchee to be bound, the party seeking to join the vouchee must be able to represent that party's interests fully and fairly in the arbitration. Universal, 946 F.2d at 1139-40. 8 Duferco declined to be vouched into the London arbitration, and on June 24, 1997 the arbitration panel found against Klaveness for all expenses and damages incurred at the port of Taranto. The award amounted to $150,000 in damages plus $37,900.50 in interest (London award).