Stolt-Nielsen Transp. Grp., Inc. v. Celanese AG

Celanese AG, Celanese Ltd., and Millenium Petrochemicals, Inc. (the manufacturers) (plaintiffs) manufactured and sold chemical products. The manufacturers entered into various contracts with Stolt-Nielsen, SA. et al. (Stolt) to ship the manufacturers’ chemical products using specialized vessels known as parcel tankers. Two groups of companies known as Odfjell and JO Tankers (defendants) were also in the parcel-tankers business. In 2003 and 2004, Odfjell and JO Tankers pled guilty to a criminal conspiracy in violation of the Sherman Act. Stolt admitted participation in the conspiracy but was granted amnesty. The manufacturers initiated claims of price fixing and other wrongful conduct against Odfjell and JO Tankers. The claims were brought in arbitration pursuant to a provision in the contract between the manufacturers and Odfjell and JO Tankers. Although Stolt was not a party in this arbitration, the arbitration panel issued subpoenas to Stolt’s custodians of records and Stolt’s former general counsel Paul O’Brien. The subpoenas were issued under § 7 of the Federal Arbitration Act (FAA). The subpoenas commanded the recipients to “appear and testify in an arbitration proceeding” and required them to bring certain documents. Stolt moved to quash the subpoena directed at O’Brien, and after it indicated it was not going to comply with the custodians of records’ subpoena, the manufacturers moved the district court to compel compliance with the subpoena. The district court granted the motion and denied Stolt’s motion to quash. After being appraised of the district court’s order to compel, the arbitration panel informed Stolt the subpoenas would be returnable on December 21, 2004. This date coincided with a period when depositions were being taken and was months in advance of a merits hearing scheduled for October 17, 2005. Stolt objected, contending that the subpoenas were efforts to compel testimonial and documentary evidence ahead of a merits hearing, which was not authorized under § 7. The district court rejected the argument. Stolt appealed the order to compel. After the arbitration panel rejected Stolt’s request for a continuance, Stolt asked the district court to stay the arbitration hearing pending the appeal, but the stay was rejected. Stolt appealed the denial.