Treasury Two Trust v. Teras Breakbulk Ocean Navigation Enterprises LLC

Background

Treasury Two Trust (TTT) and Teras Breakbulk Ocean Navigation Enterprise LLC (TBONE) entered into a bareboat charter agreement in July 2015. The agreement required disputes to be arbitrated in New York under the rules of the Society of Maritime Arbitrators and provided that New York law and general United States maritime law would apply.

TTT began arbitration in July 2017, alleging that TBONE breached the charter by failing to pay hire and other amounts and by returning the vessel early. Both parties participated in the arbitration. In September 2019, a three-arbitrator panel issued a final award directing TBONE to pay TTT $2,150,140.24.

TTT later petitioned the district court under the Federal Arbitration Act to confirm the award, asserting that TBONE had not paid any part of it. TTT served TBONE with the petition and related papers, but TBONE did not appear in the federal action.

Court’s Analysis

The court treated the unopposed confirmation petition and accompanying record similarly to a summary-judgment motion. It explained that an arbitration award generally must be confirmed unless a legally recognized basis exists to vacate, modify, or correct it.

The court found that the parties had agreed to arbitrate disputes arising from the charter and that the dispute fell within that agreement. It also found no dispute that the arbitration panel acted within its authority. The record showed that TBONE received notice, appeared at the arbitration hearing, and fully participated. The panel reopened the proceedings when it needed more information and reviewed and corrected its calculations.

The court found no indication that the award resulted from fraud or dishonesty, or that the panel disregarded the arbitration rules or acted outside the scope of its authority. Because no material factual issue prevented enforcement, the court concluded that TTT was entitled to judgment as a matter of law.

Interest and Disposition

The court granted TTT’s request for prejudgment interest at 9% per year from the date of the arbitration award through the date of judgment. It also granted post-judgment interest from the date of judgment until the award was paid in full, calculated at the statutory rate.

In the conclusion, Judge Gregory H. Woods stated that the petition to confirm the arbitration award was GRANTED. He directed the Clerk of Court to enter judgment for $2,150,140.24, plus the specified prejudgment and post-judgment interest, and to close the case.