Texaco Overseas Tankship Ltd. v. Okada Shipping Co., Ltd.

Texaco Overseas Tankship Ltd. (Texaco) (plaintiff), a British company, contracted with Okada Shipping Co., Ltd. (Okada) (defendant), a Japanese company, to charter ships for transporting Texaco’s cargo. The contract contained an arbitration clause that required any disputes to be resolved by a three-member panel of arbitrators in New York. After Texaco’s cargo was damaged, Texaco demanded arbitration and mailed Okada notice designating an arbitrator. After receiving Texaco’s notice, Okada had 20 days to designate the second arbitrator but failed to do so. Pursuant to the arbitration clause, Texaco sent Okada a notice designating a second arbitrator, and the first and second arbitrators appointed a third arbitrator. Okada also received notice of the arbitration hearing date. The law firm retained to represent Okada resigned prior to the arbitration hearing. The arbitrators awarded money damages to Texaco. Texaco filed suit in Japan, seeking to enforce arbitration award against Okada in Japan. Japan and the United States were members of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Arbitration Convention). Okada argued that the arbitration award was unenforceable on the ground that Okada had not been given the opportunity to mount a defense in the arbitration proceedings.