F.T. Maritime Services Ltd. v. Lamda Shipholding Ltd.

Background

F.T. Maritime Services Ltd. supplied marine fuel to the vessel M/V PLUTO after Nordia Bulk A/S Ltd., the vessel’s charterer, ordered the fuel. F.T. Maritime invoiced $215,440.56, but Nordia did not pay. F.T. Maritime then brought a maritime-lien action in Jamaica, where the vessel was arrested and later released after Lambda’s insurers issued an undertaking for up to $224,000, payable after a final enforceable and unappealable arbitration award or judgment.

F.T. Maritime later demanded arbitration in New York. It claimed that its confirmation of the fuel order incorporated standard terms requiring New York arbitration. Lambda refused to arbitrate. The record contained at least three versions of F.T. Maritime’s standard terms, all dated August 2016 and marked version 1.4. One version called for New York arbitration, another called for London arbitration under London Maritime Arbitrators Association rules, and a version linked in the confirmation also differed in its arbitration-panel procedure.

Jamaican Proceeding and Issue Preclusion

While the Jamaican action was pending, Lambda argued that it had no contract with F.T. Maritime. The Jamaican court later struck F.T. Maritime’s claim and denied its request to pause that case, holding that there was no maritime lien under English law and “no contractual claim to be pursued in personam against” Lambda. The Jamaican court directed the parties to proceed on Lambda’s counterclaim.

The court applied issue preclusion, also called collateral estoppel, which prevents a party from relitigating an issue that was fully and fairly decided in an earlier proceeding. The court recognized the Jamaican order based on respect for foreign judgments, reasoning that F.T. Maritime had initiated the Jamaican action, had not challenged Jamaica’s jurisdiction, and that recognizing the order would not prejudice United States citizens or violate domestic public policy.

The court concluded that the Jamaican court had decided the broader question of whether the parties had a contract at all. Because an arbitration agreement is a contract, the court held that the Jamaican decision conclusively resolved the issue necessary to F.T. Maritime’s petition. The court therefore held that F.T. Maritime was barred from bringing the petition.

Alternative Merits Analysis

The court stated that the petition would also fail even if issue preclusion did not apply. Under the Federal Arbitration Act, a court must first determine whether the parties agreed to arbitrate. F.T. Maritime argued that the New York standard terms were incorporated into the confirmation, but the court found no definitive evidence that those terms were sent to Nordia or Lambda when the fuel sale occurred.

The court also noted that F.T. Maritime attached the London terms to its petition, quoted the London terms in its Jamaican filings, and sent the New York terms to Lambda only in December 2018. The confirmation referred generally to F.T. Maritime’s standard terms and conditions without identifying which version applied, while its hyperlink led to a third version.

The court held that a general reference to standard terms did not identify a specific document beyond reasonable doubt. Because none of the versions was clearly incorporated into the transaction, the court found that no agreement to arbitrate existed. It further concluded that amending the petition would be futile because correcting the attached document would not resolve the evidence showing that the New York terms might not apply.

Disposition

Judge Edgardo Ramos denied F.T. Maritime’s motion to compel arbitration and appoint an arbitrator. The court directed the Clerk to close the case.