Sunskar Ltd. v. CDII Trading, Inc.

828 F. Supp. 2d 604, 2013 A.M.C. 1188, 2011 U.S. Dist. LEXIS 127570, 2011 WL 5243165
CourtDistrict Court, S.D. New York
DecidedNovember 3, 2011
DocketNo. 11 Civ. 2499 (DLC)
StatusPublished
Cited by1 cases

This text of 828 F. Supp. 2d 604 (Sunskar Ltd. v. CDII Trading, Inc.) 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
Sunskar Ltd. v. CDII Trading, Inc., 828 F. Supp. 2d 604, 2013 A.M.C. 1188, 2011 U.S. Dist. LEXIS 127570, 2011 WL 5243165 (S.D.N.Y. 2011).

Opinion

OPINION AND ORDER

DENISE COTE, District Judge.

Petitioner Sunskar Ltd. (“Sunskar”) brings this action to compel CDII Trading, Inc. (“CDII”) and China Direct Industries Inc. (“China Direct”) to arbitrate pursuant to a charter party (the “Charter Party”) it purports to have made with the respondents on or around January 23, 2011. Sunskar brought this motion to compel arbitration pursuant to 9 U.S.C. § 4 on July 13, 2011. The motion was fully submitted on August 4.

BACKGROUND

I. The Parties

The following facts are undisputed unless otherwise noted. Sunskar is an owner of the M/V Georgia S (“Georgia”), a self-discharging vessel. China Direct is a Florida corporation located in Deerfield Beach, Florida. CDII is also a Florida corporation based in Deerfield Beach. As CDII is a subsidiary of China Direct, they are distinct legal entities. The website of CDII says that it “acts as the industrial goods sourcing and distribution arm for the CDII family of industrial companies,” and names it a “trading division.” China Direct and CDII share the same offices and executive officers. The chief executive officer of both companies is Yuejian J. (James) Wang (“James Wang”); the chief financial officer and executive vice presi[607]*607dent is Andrew X. Wang (“Andrew Wang”); the general counsel and executive vice president is Lazarus Rothstein (“Rothstein”); and the vice president is Andrew Goldrich (“Goldrich”). Two other vice presidents of CDII are Seth Berkowitz (“Berkowitz”) and Manuel Perez (“Perez”).

II. Negotiations for an Ore Shipment Begin

Alex Friedberg (“Friedberg”) is currently the Vice President for International Logistics of CDII. He graduated from the University of Florida in May 2010 and is relatively inexperienced in transportation procurement. He was hired by CDII as an intern after graduation, given a consulting contract in October 2010, and then given his current title in December 2010. The fact that he is a CDII employee was noted in his email correspondence at issue in this case.

In late 2010, Friedberg was tasked with finding transportation for a quantity of ore CDII intended to purchase from Mexico and deliver to China (the “Ore Shipment”). As part of this process, he came in contact with David Christian Wold (“Wold”), vice president of Skaarup Shipping International Corp. — a ship owners’ agent. For the purposes of the Ore Shipment, Skaarup was an agent of Sunskar. Wold and Friedberg had many conversations between December 2010 and February 2011 discussing transportation arrangements for the Ore Shipment. These communications largely took place over email and using the instant messaging service of Skype.1 Wold claims that during these communications, Friedberg made clear that CDII was the “shipping arm” of China Direct. In at least one email, Fried-berg stated that he represented China Direct, although this email also specified that CDII was a wholly owned subsidiary of China Direct and that Friedberg was an employee of CDII. Throughout these communications, Wold instructed Fried-berg on terms and customs of the shipping industry and answered questions put to him by Friedberg about how shipping contracts are made. Friedberg admits that during these communications with Wold, they “ironed out most of the terms on the business deal I thought were necessary,” but alleges that he “was not authorized to bind CDII” and that CDII would not be bound until his superiors approved and signed any charter party.2 Friedberg also claims that during these conversations, he made Wold aware of CDII’s difficulties in securing a sufficient quantity of ore to ship.

In December 2010, Wold identified the Georgia as a ship which could convey the Ore Shipment. On December 20, Fried-berg indicated he was very interested in the Georgia. On January 10, 2011, Wold asked Friedberg if he should “develop with georgia s or should find alternative vessel/owners”? Friedberg responded that he “would love to develop with Georgia,” but that he needed to confirm that the receiver of the Ore Shipment had facilities [608]*608to accept a self-discharging vessel like the Georgia.

III. Main Terms Are Agreed to on January 18-21, 2011.

By January 18, Friedberg had learned that the receiver could accept the Georgia. Later that day, Wold asked if Friedberg were ready to book the Georgia, and Friedberg said that he was “very ready” but needed to wait a few hours. Fried-berg then asked Wold if he was comfortable moving ahead even though only a certain quantity of ore — 60% of the amount intended to be shipped — was already at the “patio,” the location where the Ore Shipment was being collected in Manzanillo, Mexico, the port city (“Manzanillo”). Wold said that he was comfortable, given that production over the next 30 days could provide the remaining ore. Fried-berg replied, “ok,” and that they would start on the paperwork for the Georgia the next day.

On January 19, Friedberg asked Wold what the consequences would be if he committed to the Georgia but a problem with the shipping schedule arose. Wold replied that if there were a cancellation, Sunskar would claim a loss if they could not find alternative cargo. Friedberg then asked for the main terms of the charter, and Wold listed the charterer, cargo quantity (25,000 mt), load and discharge ports, the dates that the Georgia would be ready for loading at Manzanillo (February 15-25, the “Laycan Dates”), the loading rate, freight rate, commission, and demurrage rate. Wold noted that further details would be included in a charter party. Friedberg and Wold also discussed payment options. Throughout the conversation, Friedberg indicated his assent, saying “I accept” to the demurrage rate, that he could “confirm [the freight transfer] for you right now,” that “yes we can do” the price and quantity terms Wold listed, and that “it is a GO” if the payment can be made due five days after signing and releasing the bill of lading.

During the afternoon of January 20, Friedberg confirmed with Wold that a form contract would be the basis for the details in the charter party, and told him that “I just spoke with the General Counsel about the whole shipping thing and we are ready to move forward, granted that you can move forward with the limited info that I have.” Wold replied, “sure, we can base it on that standard form and add any terms for [the loading port].” Friedberg then made clear to Wold that he still needed to get a draft passed to the trading team and general counsel for final review. Wold explained where he saw their negotiations at that point: “so we have fixed what we call ‘main terms’ and 2nd part is ‘rider clauses’ — main terms are agreed so that its [sic] ‘booked’ and then best efforts from both sides are made to take their time to clean/add on rider clauses.” Friedberg did not respond directly to this message. Later, Wold asked Friedberg, “so its [sic] time to be straight and clear ... terms we agreed on y[ester]day, are they acceptable by cdii trading ic today?” Friedberg said “yes, except for fact that cargo might go to another potential port.” They then exchanged copies of the riders and discussed how edits could be made to them. Friedberg told Wold, “trust that I’ve informed everyone in the office that reverting the [form contract] back to you, along with everything you request, is a PRIORITY.”

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828 F. Supp. 2d 604, 2013 A.M.C. 1188, 2011 U.S. Dist. LEXIS 127570, 2011 WL 5243165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sunskar-ltd-v-cdii-trading-inc-nysd-2011.