Stolt-Nielsen Societe Anonyme v. AnimalFeeds International Corporation
United States Court of Appeals for the Second Circuit
548 F.3d 85 (2008)
AnimalFeeds International Corp. (AnimalFeeds) (plaintiff) brought a class-action suit against Stolt-Nielsen SA (Stolt) (defendant) alleging antitrust claims related to tanker-shipping services. The case was sent to an arbitration panel by the district court to decide whether an arbitration clause contained in a ship charter-party agreement allowed class arbitration if the clause was silent on the class issue. The arbitrators decided that class arbitration was permissible under the agreement, as other arbitration panels had concluded based on similar contractual language in other types of contracts. Stolt asked the district court to overrule the arbitrators’ decision. The district court found the arbitrators committed a manifest disregard of the law and granted Stolt’s motion, vacating the arbitrators’ decision. The district court based its ruling on the fact that the arbitrators had not conducted any choice-of-law analysis, which would have concluded that federal-maritime law applied. Under maritime law, custom-and-usage law is applied to contract-interpretation questions. Under custom and usage, maritime-arbitration clauses cannot be found to include class arbitration. AnimalFeeds appealed to the United States Court of Appeals for the Second Circuit.
Rule of Law
Holding and Reasoning (Sack, J.)
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