In re the Arbitration between Intercarbon Bermuda, Ltd. & Caltex Trading & Transport Corp.

146 F.R.D. 64, 1993 U.S. Dist. LEXIS 301, 1993 WL 18807
CourtDistrict Court, S.D. New York
DecidedJanuary 12, 1993
DocketNo. 91 Civ. 4631 (MJL)
StatusPublished
Cited by45 cases

This text of 146 F.R.D. 64 (In re the Arbitration between Intercarbon Bermuda, Ltd. & Caltex Trading & Transport Corp.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Arbitration between Intercarbon Bermuda, Ltd. & Caltex Trading & Transport Corp., 146 F.R.D. 64, 1993 U.S. Dist. LEXIS 301, 1993 WL 18807 (S.D.N.Y. 1993).

Opinion

OPINION AND ORDER

LOWE, District Judge.

Before this Court is the petition of Inter-Carbon Bermuda Ltd. (“InterCarbon”) seeking to have part of an arbitration award dated April 10, 1991 vacated and to have that portion of the dispute reheard before a new arbitrator. Also before this Court is the motion of respondent and cross-petitioner Caltex Trading and Transport Corporation (“Caltraport”) seeking dismissal of the petition to vacate and confirmation of the arbitrator’s award and preliminary award. For the reasons set forth below, Caltraport’s motions to dismiss InterCarbon’s petition to vacate the arbitration award is denied; InterCarbon’s petition to vacate the award is also denied; and Caltraport’s petition to confirm the award is granted.

BACKGROUND

The parties to this dispute contracted in 1981 for the purchase and sale of petroleum products. Their agreement provided that “[t]his contract shall be governed by the laws of the state of New York and any dispute arising hereunder shall be settled by arbitration at New York, N.Y.” A dispute arose over performance of the contract, and in 1983, InterCarbon demanded arbitration. In 1987, InterCarbon sued Caltraport in this District Court to compel arbitration. Judge Ward found in favor of InterCarbon, and his order compelling arbitration was upheld on appeal.

Arbitration commenced with the parties’ Submission Agreement dated May 17, 1990. Based on documentary evidence alone, the arbitrator made a- Preliminary Award on October 23, 1990, concluding in favor of Caltraport on issues of contract interpretation. On April 10, 1991, and again without holding any live hearings, the arbitrator made his final Award, concluding in favor of Caltraport on the remaining issues and refusing to re-open the issues decided in the Preliminary Award.

InterCarbon petitions this Court to vacate that part of the final Award which decided against reopening the Preliminary Award, and to order the subject of the Preliminary Award reheard by a new arbitrator. Notice of the petition was sent by mail from InterCarbon’s New York attorneys to Caltraport’s New York attorneys, and was received by the latter on July 10, 1991. Both parties are foreign companies.

DISCUSSION

The parties and the Court agree that this dispute is governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 3 U.S.T. 2517, T.I.A.S. No. 6997 [hereinafter the “Convention”], as implemented by 9 U.S.C. §§ 201-08.1

A. Jurisdiction

The first issue to be addressed is whether this Court has jurisdiction to entertain InterCarbon’s petition. Caltraport argues that the Court lacks jurisdiction because service was not carried out by a United States marshal in accordance with 9 U.S.C. § 12,2 or in any other manner as provided by Rule 4 of the Federal Rules of Civil Procedure. InterCarbon argues that service upon Caltraport’s attorney was sufficient under Section 12, and that in any event the proper fallback provision of the [67]*67Federal Rules of Civil Procedure is Rule 5 rather than Rule 4. The Court finds in favor of InterCarbon on the jurisdictional issue, though not for the reasons given by InterCarbon.

1. Sufficiency of Service

Section 208 of the federal arbitration statute provides that Sections 1 through 12 apply to arbitration under the Convention "to the extent that [Sections 1 through 12] are not in conflict with [Chapter 2, Sections 201 through 208] or the Convention as ratified by the United States.” 9 U.S.C. § 208. Section 12 does not squarely conflict with Sections 201-08 or the Convention, but neither does it give any direction for service on a foreign party. Instead, for a nonresident of the district where an award is made, Section 12 requires service by a marshal in any district where the nonresident is found. The problem is that foreign parties will not necessarily be found in any district. Requiring parties to satisfy Section 12 might amount to requiring them to do the impossible.3

In these circumstances, Section 12 cannot be taken as the proper standard for service of process. Recourse must be had to the Federal Rules of Civil Procedure. The parties, however, disagree as to which of the Federal Rules is the proper fallback provision: Rule 4 or Rule 5. Section 12 does offer some guidance on this point, because it distinguishes between the manner of service upon a resident and the manner of service upon a nonresident. For a resident, service is to be in the manner “prescribed by law for service of notice of motion in an action in the same court.” 9 U.S.C. § 12. For a nonresident, service is to be made “in like manner as other process of the court.” Id.

Caltraport aptly cites the Second Circuit’s holding on an identical question involving 9 U.S.C. § 9, which governs confirmation of arbitration awards. Reed & Martin, Inc. v. Westinghouse Elec. Corp., 489 F.2d 1268, 1277 (2d Cir.1971) (“The phrase ‘in like manner as other process of the court’ found in § 9 of the Arbitration Act refers to Fed.R.Civ.P. 4 on the accomplishment of appropriate service ... ”). Sections 9 and 12 employ the same language regarding service upon nonresidents.4 The Court agrees with Caltraport that InterCarbon’s interpretation is all but foreclosed by Reed. And that conclusion is supported by the structure of Section 12, which designedly refers residents to the procedures for service of a notice of motion, while referring nonresidents to the procedures for service of process.

Thus far the Court has concluded that Section 12 provides no method of service for foreign parties not resident in any district of the United States, and that the proper fallback provision for service of process is Fed.R.Civ.P. 4. The next question is whether InterCarbon satisfied any of the procedures for service of process under Rule 4, and the answer is that it did not. InterCarbon practically admits this by its attempt to redirect the Court’s attention from Rule 4 to Rule 5, and by its failure to claim that it met the requirements of Rule 4. Petitioner’s Reply Memorandum at 6. Examination of Rule 4 confirms that simply sending a petition from one attorney to [68]*68another by regular mail does not satisfy any of that rule’s procedures for service.

Two parts of Rule 4 apply here. First, Rule 4(e)5

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Bluebook (online)
146 F.R.D. 64, 1993 U.S. Dist. LEXIS 301, 1993 WL 18807, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-intercarbon-bermuda-ltd-caltex-trading-nysd-1993.