Sumitomo Corp. v. Parakopi Compania Maritima, S.A.

In 1975 Sumitomo Corporation (plaintiff) and Parakopi Compania Maritima, S.A. (Parakopi) (defendant) entered into a contract in Greece under which Sumitomo would sell a carrier to Parakopi that was built by Oshima Shipbuilding Co. Ltd. (Oshima) (plaintiff). Oshima agreed to be bound by the contract’s terms. The agreement included an arbitration provision stating nontechnical disputes would be arbitrated in New York under United States law. A payment-related dispute arose between the parties. In January 1979, Parakopi filed an action in Greece seeking permission to stop payments because of a change in economic circumstances. In April, Sumitomo and Oshima sent Parakopi a demand for arbitration and requested that Parakopi appoint an arbitrator. Parakopi selected an arbitrator but, with the selected arbitrator, refused to participate in the mutual appointment of a third arbitrator with Sumitomo and Oshima. Sumitomo and Oshima filed in United States federal district court, seeking an order to compel Parakopi to participate in arbitration and seeking a court-appointed third arbitrator. The request was filed under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the convention), to which Greece and the United States were parties. Parakopi argued the court should deny the request on international-comity grounds because of Parakopi’s pending case in Greece. At the time of the United States case, the Greek court had not reviewed any merits of Parakopi’s case or issued any substantive orders.