Keystone Shipping Corporation v. Texport Oil Company

782 F. Supp. 28 (1992)

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Keystone Shipping Corporation v. Texport Oil Company

United States District Court for the Southern District of New York
782 F. Supp. 28 (1992)

Facts

Chas. Kurz & Co., Inc. (Kurz) (defendant) owned a vessel, and Keystone Shipping Corporation (Keystone) (defendant), an affiliate of Kurz, operated Kurz’s vessel. Keystone and Kurz were separate companies. Texport Oil Company (Texport) (plaintiff) entered into a contract with Kurz to charter the vessel for transporting cargo. Keystone, thus, was not a party to the contract. Keystone signed the contract for Kurz, its disclosed principal, meaning that Keystone signed the contract solely as an agent for Kurz, and Texport was aware of this fact. The contract between Kurz and Texport contained an arbitration clause. After the cargo was delivered, a dispute arose concerning the condition of the cargo. Texport filed suit against Kurz and Keystone. Kurz and Keystone demanded arbitration. Texport agreed to arbitrate the dispute with Kurz but objected to Keystone’s arbitration demand on the grounds that Keystone had no right to enforce the arbitration clause because Keystone did not sign the contract. Keystone and Kurz motioned the court to compel Texport to arbitrate the dispute with Keystone. Keystone also requested a stay of the lawsuit pending arbitration.

Rule of Law

Issue

Holding and Reasoning (Edelstein, J.)

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