Kulukundis Shipping Co. v. Amtorg Trading Corp.

Amtorg Trading Corporation (Amtorg) (defendant) negotiated with Kulukundis Shipping Company (Kulukundis) (plaintiff) to charter one of Kulukundis’s ships. Brokers for the companies reached an agreement, and Amtorg’s broker executed and delivered a fixture slip to Kulukundis, as was industry practice. The fixture slip indicated the conclusion of the parties’ negotiations and contained most of the agreement’s material terms. Amtorg subsequently refused to sign the charter contract. Kulukundis sued Amtorg for damages. Amtorg argued that it was not liable because there was no contract between the parties. Shortly before trial, Amtorg sought to amend its answer to include an alternative defense, arguing that if there was a contract, then the lawsuit was premature because Kulukundis had not asked Amtorg to arbitrate per the charter contract’s arbitration clause. The clause stated that any disputes were to be settled by arbitration. Kulukundis countered that Amtorg could not argue on the one hand that there was no contract and then on the other hand that Kulukundis had failed to comply with the contract’s arbitration clause. The trial court denied Amtorg’s motion to amend its answer, and after trial, it held that Amtorg had breached a valid contract and ordered Amtorg to pay damages. Amtorg appealed, and the court of appeals considered whether Amtorg’s arbitration theory was viable.