Court Opinion

ID: 2964614
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:28:19.424921+00
Date Added: 2024-06-11T11:42:58.261690
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 96-1800

                              KEYSTONE SHIPPING COMPANY,

                                Plaintiff - Appellant,

                                          v.

                              NEW ENGLAND POWER COMPANY,

                                Defendant - Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                  [Hon. George A. O'Toole, Jr., U.S. District Judge]
                                                ___________________

                                 ____________________

                                        Before

                                  Cyr, Circuit Judge,
                                       _____________
                           Campbell, Senior Circuit Judge,
                                     ____________________
                              and Stahl, Circuit Judge.
                                         _____________

                                 ____________________

            Joseph D. Steinfield with whom Joshua A. Davis, C. Dylan Sanders,
            ____________________           _______________  ________________
        and Hill & Barlow were on brief for appellant.
            _____________
            Stanley McDermott, III, with whom James D. Kleiner, Piper &
            ______________________            ________________  _______
        Marbury L.L.P., and John F. Sherman, III, were on brief for appellee.
        ______________      ____________________

                                 ____________________

                                    March 20, 1997
                                 ____________________

                      STAHL, Circuit Judge.  This   case   involving   an
                      STAHL, Circuit Judge.
                             _____________

            underlying dispute over who is to pay for some $14 million in

            repairs  to  a coal  cargo ship  requires  us to  resolve one

            question: whether claims  asserted by defendant-appellee  New

            England  Power  Company  ("NEP") against  plaintiff-appellant

            Keystone Shipping Co. ("Keystone")  are arbitrable.  We reach

            two conclusions pointing  to the same result.  First, because

            the  issue  has  already  been litigated  by  the  parties in

            Massachusetts state court, it is precluded  from relitigation

            under  the doctrine of issue preclusion.  Second, even if the

            issue  were not precluded, we find that Keystone and NEP have

            a  legally-enforceable agreement  to arbitrate  disputes like

            the one here.  We thus affirm.

                           Background and Prior Proceedings
                           Background and Prior Proceedings
                           ________________________________

                      In order to resolve this appeal we must  consider a

            long series  of agreements and disputes  between Keystone and

            NEP concerning  the S.S.  Energy Independence, now  named the

            S.S.  Energy  Enterprise  ("the  Vessel").   The  Vessel  was

            constructed in the  early 1980s  by the  New England  Collier

            Company  ("NECCO"), an  unincorporated joint  venture between

            Keystone   and  an   NEP   affiliate,   New  England   Energy

            Incorporated  ("NEEI").  NEP, in  turn, chartered  the Vessel

            from NECCO to deliver coal to its electric power plants.  The

            joint  venture  agreement  and  the  NEP  time  charter  both

            contained arbitration provisions.

                                         -2-
                                          2

                      The relationship was not  an entirely happy one and

            a  dispute between the  parties followed.   In 1987, Keystone

            commenced arbitration  against NEEI under  the joint  venture

            agreement,  while NEP  commenced  arbitration  against  NECCO

            under the time  charter.  In a previous appeal to this Court,

            we  held   that  the   two  arbitrations  were   amenable  to

            consolidation by federal court order.  See New England Energy
                                                   ___ __________________

            Inc. v. Keystone Shipping Co., 855 F.2d 1, 8 (1st Cir. 1988),
            ____    _____________________

            cert. denied, 489 U.S. 1077 (1989).
            _____ ______

                      Before the arbitration  was concluded, the  parties

            settled  their  differences  through  a  settlement agreement

            signed  by Keystone, NEP, and NEEI in October 1989 ("the 1989

            settlement  agreement").     Under  the  agreement's   terms,

            ownership of the Vessel was to pass from NECCO to Keystone or

            a  Keystone nominee.    The parties  further agreed  that the

            Vessel's  new owner would time  charter the Vessel  to NEP on

            "terms and conditions agreed  to by Keystone and NEP."   They

            annexed  a draft of the proposed new time charter ("the draft

            charter")  to  the  settlement  agreement.   Like  the  then-

            operative  NEP time  charter, the  draft charter  contained a

            sweeping arbitration provision.  In particular, Section 41 of

            the draft  charter provided  that "[a]ny and  all differences

            and disputes of whatsoever nature arising out of this Charter

            which  cannot  be resolved  by the  parties  shall be  put to

                                         -3-
                                          3

            arbitration in the  City of Boston  . . .  before a board  of

            three persons."

                      Keystone nominated Intercoastal Bulk Carriers, Inc.

            ("IBC")  to be the Vessel's  new owner.1   In accordance with

            the settlement  agreement, NECCO sold  the Vessel to  IBC and

            IBC,  in turn,  chartered the  Vessel to  NEP through  a time

            charter agreement  executed by  IBC and  NEP on December  27,

            1989 ("the 1989 time charter"). The executed time charter was

            substantially similar  to the October draft  charter, but not

            exactly  identical.   The arbitration  provisions in  the two

            documents,  however, were alike  in all respects.   That same

            day, December 27, Keystone and  IBC entered into a management

            agreement  which provided  that  Keystone  would continue  to

            manage the Vessel.

                      The executed 1989 time  charter gave NEP the option

            to purchase  the Vessel  and terminate  the charter with  six

            months' prior,  written  notice.   In  1994, NEP  decided  to

            exercise its  option,  resell  the  Vessel  to  International

            Shipholding Corp. ("ISC"), and then recharter the Vessel from

            ISC.  On October 27, 1994, NEP and ISC signed a Memorandum of

            Agreement to this effect.  Several days later, on November 1,

            1994, NEP notified  Keystone and IBC  that it was  exercising

            its six-month purchase option and would buy the Vessel on May

                                
            ____________________

            1.  Like Keystone itself, IBC is a wholly-owned subsidiary of
            Chas. P. Kurz & Co. ("Kurz").

                                         -4-
                                          4

            1, 1995.  NEP concurrently demanded arbitration  of its right

            to do this, because Keystone had previously communicated that

            it would contest NEP's right to exercise the purchase option.

            Keystone alleged  that in the negotiations  that produced the

            1989 settlement  agreement NEP had represented  that it would

            not  exercise  the time  charter's  purchase  option.   NEP's

            exercise of  the option,  Keystone suggested,  indicated that

            NEP had made misrepresentations at the time of the settlement

            negotiations and had  violated Mass.  Gen. Laws ch.  93A.   A

            three-member  arbitration  panel  was  convened  to  hear the

            parties' dispute.

                      On March  15, 1995,  the arbitration panel  decided

            four  threshold  issues  concerning   NEP's  service  of  the

            purchase notice and  demand for arbitration in  favor of NEP.

            IBC  responded by filing an action  in federal district court

            under  9 U.S.C.   10  to vacate the  arbitrators' ruling, but

            the  court  dismissed  the   complaint  as  premature.    See
                                                                      ___

            Intercoastal Bulk  Carriers, Inc.  v. New England  Power Co.,
            _________________________________     ______________________

            No.  95-10880  RW2, (D.  Mass.  May 18,  1995).   Thereafter,

            Keystone  and IBC resumed arbitration of the dispute.  On May

            17,  1995,   Keystone  and  IBC  announced   that  they  were

            withdrawing  the challenge  to  NEP's right  to exercise  the

            purchase option  from arbitration,  leaving to the  panel the

            issue  of whether NEP's actions had  violated Mass. Gen. Laws

            ch. 93A.

                                         -5-
                                          5

                      That  same  day,  May  17,  Keystone  sued  NEP  in

            Massachusetts  state  court,  claiming  that  NEP   had  made

            misrepresentations  during  the  negotiations over  the  1989

            settlement agreement.  NEP moved to dismiss Keystone's claims

            on  the ground  that they  were governed  by the  arbitration

            provision of the 1989 time charter.  Keystone  responded that

            its  claims against  NEP did  not arise  under the  1989 time

            charter  signed by NEP and IBC, but  instead arose out of the

            1989 settlement agreement, which  did not have an arbitration

            provision.  The  state court  agreed with  NEP and  dismissed

            Keystone's  complaint.   The state  court concluded  that the

            settlement  agreement's provisions  meant  that Keystone  was

            bound  by   the  1989  time  charter's   arbitration  clause,

            notwithstanding  the fact  that Keystone  had not  signed the

            charter, which  had been executed  by its  nominee, IBC,  and

            NEP.  See Keystone Shipping Co. v. New England Power Co., No.
                  ___ _____________________    _____________________

            95-1141-B  (Mass. Superior  Court,  Essex County,  August 17,

            1995).

                      The   dispute   thus  returned   to   the  original

            arbitration panel, which, on  August 21, 1995, concluded that

            NEP had the right to exercise the purchase option in the 1989

            time charter. The arbitrators ordered IBC to sell the  Vessel

            to  NEP.   Two  days later,  IBC filed  an action  in federal

            district  court seeking  to  vacate the  arbitrators'  latest

            rulings. See Intercoastal Bulk  Carriers, Inc. v. New England
                     ___ _________________________________    ___________

                                         -6-
                                          6

            Power  Co., C.A.  No. 95-11881-GAO.   Shortly  thereafter, on
            __________

            September 5, 1995, Keystone filed a notice of appeal from the

            state court's decision  to dismiss its state  cause of action

            against NEP.

                      This  was the  state of  legal affairs  between the

            parties when, on September 20, 1995, IBC and NEP entered into

            a new settlement agreement ("the 1995 settlement agreement").

            Under the  new settlement  agreement, IBC agreed  to transfer

            the Vessel  in accordance with NEP's wishes to ISC's nominee,

            Enterprise Ship  Co. ("Enterprise").   The parties  expressly

            acknowledged that  the arbitration  clause found in  the 1989

            time charter would govern the  new settlement agreement.  The

            settlement agreement also provided  for the mutual release of

            claims by  Keystone and IBC in  favor of NEP and  vice versa.

            There was one exception  to this general release.   Exhibit B

            of the agreement  expressly provided that NEP did not release

            Keystone  and  IBC from  "claims, if  any,  by reason  of the

            Vessel not being in class at the Closing based upon a  survey

            .  . .  when the  Vessel is  drydocked immediately  after the

            Closing."

                      On  September 28,  1995,  the  Vessel's new  owner,

            Enterprise,  took title and sent the Vessel to a shipyard for

            the  agreed-upon  inspection.    The  survey   that  followed

            revealed corrosion damage to the Vessel's bulkheads and cargo

            holds  exceeding the  tolerances established by  the American

                                         -7-
                                          7

            Bureau of Shipping,  thereby making  the Vessel  unseaworthy.

            The ship inspectors refused to allow the Vessel to sail until

            the needed repairs were completed.  NEP alleges that the bulk

            of  the corrosion  damage was a  direct result  of Keystone's

            failure to maintain  the Vessel.  The total cost to bring the

            Vessel to standard is claimed to be approximately $14 million

            dollars. NEP argues that Keystone and IBC are responsible for

            much of that amount under the terms of the 1989 time charter.

                      On December 20, 1995, NEP notified  the arbitration

            panel  that  it  desired  to  arbitrate its  claims  for  the

            Vessel's  repair costs  against Keystone  and IBC.   Keystone

            denied that it was required to arbitrate NEP's claims, and on

            February  27,  1996  filed  suit in  federal  district  court

            seeking a stay of arbitration pursuant to Mass. Gen. Laws ch.

            251,    2(b).  NEP cross-moved  under the Federal Arbitration

            Act,  9 U.S.C.   4, to compel  arbitration.  On May 24, 1996,

            the district court granted NEP's motion to compel, concluding

            that the  arbitrability of NEP's claims  against Keystone was

            an issue  that had  been previously decided  in Massachusetts

            state court, and, in  any event, was the result  compelled by

            the merits.  This appeal ensued.

                                  Standard of Review
                                  Standard of Review
                                  __________________

                      We review de novo the district  court's application
                                __ ____

            of   the  doctrine   of   issue  preclusion   because  "[t]he

            applicability vel non of  preclusion principles is a question
                          ___ ___

                                         -8-
                                          8

            of law."  Monarch Life Ins. Co. v. Ropes & Gray, 65 F.3d 973,
                     ______________________    ____________

            978 (1st Cir. 1995).  Accordingly, "[n]o special deference is

            owed to the district court's determination."  Grella v. Salem
                                                          ______    _____

            Five Cent Sav. Bank, 42 F.3d 26, 30 (1st Cir. 1994).
            ___________________

                      Similarly,   we   exercise   plenary  review   over

            determinations  regarding  arbitrability.    "[A]rbitrability

            depends on  contract interpretation,  which is a  question of

            law."  PaineWebber Inc.  v. Elahi, 87 F.3d 589, 592 (1st Cir.
                   ________________     _____

            1996) (construing Commercial Union  Ins. Co. v. Gilbane Bldg.
                              __________________________    _____________

            Co., 992 F.2d 386, 388 (1st Cir. 1993)).
            ___

                            The Issue Preclusion Question
                            The Issue Preclusion Question
                            _____________________________

                      In  issuing its  order to  compel  arbitration, the

            district court  concluded that the Massachusetts  state court

            judgment precludes Keystone from relitigating the question of

            arbitrability  under  the  1989  time   charter.  On  appeal,

            Keystone maintains  that  the district  court misapplied  the

            issue preclusion doctrine.  We disagree.

                      Initially, we  note  that  "[t]he  full  faith  and

            credit  statute, 28 U.S.C.    1738, requires us  to give 'the

            same preclusive effect to state court judgments -- both as to

            claims and issues previously adjudicated -- as would be given

            in  the state court system in which the federal court sits.'"

            Kyricopoulos  v. Town of Orleans,  967 F.2d 14,  16 (1st Cir.
            ____________     _______________

            1992)  (per curiam)  (quoting Willhauck  v. Halpin,  953 F.2d
                                          _________     ______

            689, 704 (1st  Cir. 1991)).   Massachusetts law thus  governs

                                         -9-
                                          9

            the  preclusion  question in  this  case.   However,  we have

            previously  recognized that  Massachusetts courts  "apply the

            doctrine  of  issue  preclusion  in  a  traditional  manner."

            Willhauck, 953 F.2d at 705 (citing Martin v. Ring, 514 N.E.2d
            _________                          ______    ____

            663, 664 (Mass. 1987); Fireside  Motors, Inc. v. Nissan Motor
                                   ______________________    ____________

            Corp., 479 N.E.2d 1386  (Mass. 1985); Restatement (Second) of
            _____

            Judgments   27  (1982)).   Because our cases  apply the  same

            traditional  preclusion  principles that  would control  in a

            Massachusetts court, our previous pronouncements in this area

            of law are persuasive.

                      "The principle  of  collateral estoppel,  or  issue

            preclusion,"  we have  explained, "bars  relitigation  of any

            factual or legal issue that was actually decided in  previous
                                            ________

            litigation 'between  the parties,  whether on  the same  or a

            different  claim.'"  Grella, 42 F.3d at 30 (quoting Dennis v.
                                 ______                         ______

            Rhode Island Hosp. Trust,  744 F.2d 893, 899 (1st  Cir. 1984)
            ________________________

            (quoting  Restatement (Second)  of  Judgments    27 (1982))).

            When the parties in a subsequent action are the same as those

            in a prior  one, a  party seeking to  invoke the doctrine  of

            issue preclusion needs to  establish four essential elements:

            "(1) the  issue sought to  be precluded must  be the same  as

            that  involved in the prior  action; (2) the  issue must have

            been  actually  litigated;  (3)  the  issue  must  have  been

            determined by a valid and binding final judgment; and (4) the

            determination of the  issue must have  been essential to  the

                                         -10-
                                          10

            judgment."   Grella, 42 F.3d  at 30; accord Ropes  & Gray, 65
                         ______                  ______ _____________

            F.3d at  981.   Each  of these  elements  is present  in  the

            instant case.

                      First,  the arbitrability  of NEP's claims  in this

            case raises the same issue  raised in the Massachusetts state

            cause of action.  Keystone ingeniously attempts to argue that

            there  are two  separate and  distinct arbitrability  issues.

            Keystone in particular maintains that the state court decided

            that claims  against it  under the 1989  settlement agreement

            were arbitrable, but that this case raises a different issue:

            "whether claims  asserted by  NEP against Keystone  under the

            1989 Time  Charter and 1995 NEP-IBC  Settlement Agreement are

            arbitrable."   Keystone fails to persuade for  a very simple,

            but  inescapable, reason.    The state  court concluded  that

            Keystone was bound to  arbitrate claims concerning the Vessel

            under the 1989  settlement agreement because (1) it was bound

            to arbitrate such claims under the terms of the executed 1989

            time charter,  and (2) Keystone  had expressly agreed  in the

            1989 settlement agreement that  ownership of the Vessel would

            pass  to Keystone or a Keystone nominee and that the Vessel's

            new  owner would time charter the Vessel to NEP on "terms and

            conditions  agreed   to  by  Keystone  and   NEP."    Because

            arbitrability of  claims concerning  the Vessel was  one such

            term and  condition in the  executed time charter,  the state

            court  concluded  that  the  settlement  agreement's  express

                                         -11-
                                          11

            language bound Keystone  to arbitrate  such claims.   Put  in

            another  fashion, the state court found that Keystone, in the

            1989 settlement agreement, had expressly  agreed that it or a

            nominee would execute a time charter on terms and  conditions

            agreeable to  Keystone, and thus  was bound to  arbitrate all

            disputes because  the executed  time charter, like  the draft

            charter attached to the settlement agreement and initialed on

            every  page by  Keystone, made  claims concerning  the Vessel

            arbitrable.

                      Keystone's  argument  about  the   1995  settlement

            agreement likewise  fails to persuade because  the parties to

            the  agreement expressly  acknowledged  that the  arbitration

            clause  found in the 1989 time charter would apply and govern

            the  new settlement  agreement.   While it  is true  that the

            settlement  agreement  provided  for  the mutual  release  of

            claims by Keystone  and IBC in favor  of NEP and  vice versa,

            the  agreement  expressly  carved  out an  exception  to  the

            general  release for "claims, if any, by reason of the Vessel

            not being  in class  at the  Closing."   Because NEP did  not

            release  such claims, and because such claims arise under the

            1989 settlement agreement and  are arbitrable under the terms

            of  that   agreement  and   the  1989  time   charter,  their

            arbitrability  in the  instant case  is the  very same  issue

            previously  litigated  and  decided  in  Massachusetts  state

            court.

                                         -12-
                                          12

                      This point carries us to the  second element of the

            issue preclusion  standard: the  issue raised here  on appeal

            has  been  "actually litigated."    Grella,  42 F.3d  at  30.
                                                ______

            Keystone  opposed NEP's  motion to dismiss  the Massachusetts

            state cause  of action  before the  state court  with briefs,

            affidavits, and at a motion hearing.  Keystone  feebly argues

            that the state court should not have disposed of its cause of

            action  by  motion,  but  instead should  have  conducted  an

            evidentiary  hearing.      As  NEP   correctly   notes,   the

            Massachusetts court  had before it  the relevant  contractual

            documents, read  and heard  the litigants' opposing  views on

            what meaning and effect should be afforded to those documents

            and  the history  of  the parties'  arbitration efforts,  and

            properly concluded  that the arbitrability question  could be

            decided on  motion.  Well-settled principles  of law indicate

            that  the  arbitrability  issue  was  actually litigated  for

            preclusion purposes  because it was "subject  to an adversary

            presentation and consequent judgment" that was not "a product

            of  the parties'  consent  and is  a  final decision  on  the

            merits."   Jack  H. Friedenthal  et  al., Civil  Procedure   
                                                      ________________

            14.11, at 672, 673 (1985).

                      We  thus  reach  the  third  and  fourth  essential

            elements  of  collateral estoppel:  the  issue  sought to  be

            precluded must  have been determined  by a valid  and binding

            final judgment  and the issue's determination  must have been

                                         -13-
                                          13

            essential to the judgment.  See Ropes & Gray, 65 F.3d at 978;
                                        ___ ____________

            Grella,  42  F.3d at  30.   Keystone  does not  challenge the
            ______

            validity  and binding  nature  of the  state court  judgment.

            Rather, Keystone argues that the state court judgment focused

            on the 1989  settlement agreement and thus  did not determine

            the arbitrability  of NEP's current claims  because the court

            did not decide whether claims against Keystone are arbitrable

            under  either the 1989  time charter  or the  1995 settlement

            agreement.   This  argument is  nothing more than  a recycled

            version  of the contention we have just rejected.  As we have

            seen, the state  court determined that Keystone was  bound to

            arbitrate under  the 1989  settlement agreement because  that

            agreement contemplated the 1989 time charter, which contained

            a  sweeping arbitration  clause.   The  arbitrability of  any

            claims,  including NEP's  present ones,  under the  1989 time

            charter was an essential component in the state court's prior

            determination, even if it itself  was not the ultimate  issue

            the court decided.   As we recently explained, an  "issue may

            be  actually  litigated  and  resolved  'even if  it  is  not

            explicitly  decided,' as long as it is logically necessary to

            [the  court's] final decision."  Ropes & Gray, 65 F.3d at 982
                                             ____________

            (quoting and  construing Grella, 42 F.3d  at 30-31) (emphasis
                                     ______

            in original omitted).

                      Our  review  of  the  record  indicates  that   the

            arbitrability of NEP's present  claims against Keystone is an

                                         -14-
                                          14

            issue  that  has already  been litigated  and decided  by the

            parties  in Massachusetts state court.  Under the doctrine of

            issue preclusion,  Keystone cannot  seek to  undo or  redo in

            federal court what has already been done in state court.   

                        The Merits of the Arbitrability Issue
                        The Merits of the Arbitrability Issue
                        _____________________________________

                      Our  decision  today  would  be the  same  even  if

            principles  of collateral  estoppel  did  not bar  Keystone's

            attempt  to  relitigate the  arbitrability  of  NEP's current

            claims against it.  Our review of the record and the relevant

            contractual  documents  contained therein  convinces  us that

            Keystone  is bound  to arbitrate  NEP's claims  regarding the

            Vessel.  In view  of the detailed factual discussion  we have

            already undertaken, we do not feel it necessary to replay all

            of  the evidence.    We shall  only  briefly explain  why  we

            conclude  that Keystone is bound to  arbitrate such claims as

            those NEP presently advances.

                      Keystone entered into the 1989 settlement agreement

            with NEP.   In that agreement, Keystone expressly agreed that

            ownership  of the  Vessel  would pass  to  it or  a  Keystone

            nominee  and that the  Vessel's new owner  would time charter

            the  Vessel  to NEP  on "terms  and  conditions agreed  to by

            Keystone and NEP." Attached to the settlement agreement was a

            draft   of  the  contemplated   time  charter  that  Keystone

            initialed  on every  page.   The  draft  charter contained  a

            sweeping arbitration clause,  which provided that  "[a]ny and

                                         -15-
                                          15

            all differences and disputes of whatsoever nature arising out

            of this Charter which cannot be resolved by the parties shall

            be  put  to arbitration  in the  City  of Boston."   Keystone

            subsequently nominated IBC  to take title  to the Vessel  and

            IBC, in turn,  executed the  time charter with  NEP that  was

            contemplated in the 1989  settlement agreement.  The executed

            time charter  contained the exact same  arbitration provision

            as the  draft  attached to  the  settlement agreement.    The

            inescapable  conclusion from the  foregoing is  that Keystone

            agreed to time  charter the  Vessel to NEP,  via its  nominee

            IBC,  under  the  terms  and conditions  established  in  the

            executed  time charter,  including the  terms  and conditions

            regarding the arbitrability of claims.

                      The 1995  settlement agreement between IBC  and NEP

            does not change this legal state of affairs.  Both parties to

            the  agreement  expressly acknowledged  that  the arbitration

            clause  found in the 1989  time charter would  govern the new

            settlement  agreement.  While  the new  settlement  agreement

            provided for the mutual release of claims by Keystone and IBC

            in  favor  of  NEP  and vice  versa,  as  we  have  said, the

            agreement  expressly  carves  out  one  exception  from  this

            general  release. The  relevant  language could  not be  more

            clear: NEP does not release Keystone and IBC from "claims, if

            any, by  reason of  the  Vessel not  being  in class  at  the

            Closing  based  upon a  survey  .  .  .  when the  Vessel  is

                                         -16-
                                          16

            drydocked immediately  after the Closing."   Because NEP does

            not release  such claims  against Keystone, and  because such

            claims  arise under  the  1989 settlement  agreement and  are

            arbitrable  under the  executed time charter  contemplated by

            that earlier settlement agreement,  Keystone is obligated  to

            arbitrate NEP's present claims.

                      The fact  that Keystone itself did  not sign either

            the 1989 time charter or the 1995 settlement agreement is not

            dispositive.  Keystone is  bound by the terms and  conditions

            of the executed  time charter because  of the commitments  it

            undertook in  the 1989  settlement agreement.   And the  fact

            that  Keystone is  not  a signatory  to  the 1995  settlement

            agreement is  nothing more than a clever  red herring because

            that  agreement  specifically   preserves  Keystone's   prior

            exposure and liability  under the  1989 settlement  agreement

            and  time  charter, for  "claims, if  any,  by reason  of the

            Vessel not being in class at the Closing."

                      Having weighed  the merits vel non  of this appeal,
                                                 ___ ___

            we  find that the balance swings clearly  in NEP's favor.  We

            conclude  that  NEP's  claims   are  arbitrable  and  decline

            Keystone's invitation to visit additional corollary issues.

                                      Conclusion
                                      Conclusion
                                      __________

                      Principles    of    collateral   estoppel    (issue

            preclusion) raise a bar to Keystone's attempt to litigate the

            arbitrability of NEP's present  claims for recovery of repair

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                                          17

            costs  to the Vessel.  Even if  this were not the case, NEP's

            claims against  Keystone are  arbitrable as a  consequence of

            Keystone's contractual  commitments.  We  thus conclude  that

            the district court's order to compel arbitration was correct.

                      Affirmed.  Costs to appellee.
                      Affirmed.  Costs to appellee.

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