Mediterranean Shipping Co. Geneva v. Pol-Atlantic

Mediterranean Shipping Company S.A. Geneva (Mediterranean) (defendant), POL-Atlantic (plaintiff), and Atlantic Container Line AB (Atlantic Container) (plaintiff) were trans-Atlantic carriers. Mediterranean was the bareboat charterer, i.e., it had full control and possession, of the Carla, a vessel owned by Rationis Enterprises, Inc. (Rationis). POL-Atlantic and Atlantic Container were slot charterers, meaning they reserved a number of container slots on the Carla. A Vessel Sharing Agreement (agreement) governed the relationship between Mediterranean, POL-Atlantic, and Atlantic Container. The agreement included a provision that made Mediterranean responsible for the seaworthiness of the Carla. The agreement also provided that disputes among Mediterranean, POL-Atlantic, and Atlantic Container be resolved at the London Court of International Arbitration. POL-Atlantic and Atlantic Container placed containers of cargo on the Carla before it departed from France for a voyage to the United States. The Carla encountered bad weather and partially sank. The cargo owners sued POL-Atlantic and Atlantic Container for damages to their goods. POL-Atlantic and Atlantic Container then filed third-party indemnity actions against Mediterranean. Independently, Mediterranean and Rationis filed petitions seeking a judgment limiting their liability under the Limitation of Shipowners’ Liability Act. POL-Atlantic and Atlantic Container then moved to consolidate the actions relating to the cargo damage with the actions relating to Mediterranean’s and Rationis’s limitation of liability, which the district court granted. Mediterranean moved to stay POL-Atlantic’s and Atlantic Container’s indemnity claims until the dispute had been arbitrated pursuant to the agreement. The district court denied Mediterranean’s motion, and Mediterranean appealed.