I/S Stavborg v. National Metal Converters, Inc.

500 F.2d 424 (1974)

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I/S Stavborg v. National Metal Converters, Inc.

United States Court of Appeals for the Second Circuit
500 F.2d 424 (1974)

Facts

In August 1972, I/S Stavborg (plaintiff) and National Metal Converters, Inc. (National Metal) (defendant) entered a contract of charter party. National Metal agreed to charter a vessel owned by I/S Stavborg to transport bulk scrap steel from Maine to Spain. Clause 37 of the contract provided the parties would refer all disputes to arbitration in New York City under New York law. The chartered vessel left Maine in August 1972, and I/S Stavborg consigned the steel to another vessel, Rosal. When the vessel arrived in Spain, discharge of the cargo commenced, but Rosal did not pay the freight as required. At some point prior to completion of the cargo discharge, National Metal requested the discharge of cargo to cease due to Rosal's failure to pay the freight. National Metal argued that, under Clause 8 of the contract, National Metal was obligated to pay only to the extent I/S Stavborg was unable to obtain payment by exercise of a lien on the cargo. The parties submitted this dispute to arbitration in New York City under certain agreed-upon facts. The arbitral tribunal entered an award in favor of I/S Stavborg, finding National Metal was required to pay for the freight under Clause 1 of the contract. I/S Stavborg filed a motion in the district court to confirm the arbitral award. National Metal petitioned the district court to modify or vacate that award under 9 U.S.C. § 9. The district court granted I/S Stavborg’s motion to confirm the arbitral award. Citing Wilko v. Swan , and Sobel v. Hertz, Warner & Co., National Metal appealed to the Second Circuit, contending the district court should have set aside the arbitral award, as the award manifestly disregards the law.

Rule of Law

Issue

Holding and Reasoning (Oakes, J.)

Dissent (Mansfield, J.)

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