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International Chartering Services, Inc. v. Eagle Bulk Shipping Inc.
Citation: 557 F. App'x 81Docket: No. 13-0939-cv
Court: Court of Appeals for the Second Circuit; February 24, 2014; Federal Appellate Court
Defendants-Appellants, Eagle Bulk Shipping and its subsidiaries, appeal a ruling from the U.S. District Court for the Southern District of New York that denied their motion to compel arbitration related to disputes arising from charter parties negotiated between 2006 and 2007 with Korea Line Corporation (KLC). Eagle Bulk Shipping owns other defendants, including Anemi Maritime Services and thirteen shell companies. Plaintiffs, International Chartering Services (ICS) and Peraco Chartering, are ship brokers who acted as agents for the contracts but were not parties to them. The charter parties included an arbitration provision for disputes between "Owners and Charterers" and mandated commission payments to Plaintiffs. After KLC's bankruptcy in 2011 and subsequent renegotiation of the charter parties, Defendants stopped paying some commissions, prompting Plaintiffs to file a lawsuit. Defendants argued that Plaintiffs must arbitrate based on claims arising from the charter parties. Plaintiffs countered that their claims stem from separate agreements and that they are not bound to the arbitration clause as non-signatories. The court examined whether Plaintiffs could be bound to arbitrate under principles of contract and agency law, noting that acceptance of benefits from an agreement with an arbitration clause could result in being bound. However, the charter parties explicitly limited the arbitration clause to "Owners and Charterers," which does not include Plaintiffs. The district court's reasoning was deemed potentially correct under federal maritime law, but Defendants contended that English law, which may interpret the terms differently to include Plaintiffs as assignees, should apply. The district court had not resolved which law governed the dispute, leading to a remand for consideration under federal maritime choice of law rules. Plaintiffs assert that their claims derive from prior, independent agreements, while Defendants seek to compel arbitration, arguing that no such separate agreements exist and that the parol evidence rule would exclude any evidence of them. The court declines Defendants' request, noting that the case is currently focused on a motion to compel arbitration, not a summary judgment motion, and the district court did not address Defendants' arguments. On remand, the district court is instructed to determine if the plaintiffs have claims independent of the charter parties, allowing them to litigate those claims if they exist. The judgment from the district court is reversed, and the case is remanded for further proceedings. KLC is noted as not being a party to this action. The court considers whether Defendants preserved their arguments regarding the arbitration clause, ultimately deciding to treat the argument as preserved to ensure proper interpretation of the maritime contract in question.