Cargill Incorporated, Ocean Transportation v. Triorient LLC

Background

Cargill petitioned to confirm a November 11, 2020 final arbitration award against Triorient. The underlying dispute arose from a February 10, 2020 charter party for the MV Josco Huizhou to transport iron ore concentrate from Mexico to China. Cargill alleged that Triorient failed to supply the cargo, causing the vessel to remain at the loadport. Cargill terminated the charter on May 18, 2020, citing Triorient’s breach and repudiation.

Cargill then sought arbitration damages for demurrage, lost earnings, and hull-cleaning costs. The charter party required disputes to be arbitrated in New York before a three-person panel under the Society of Maritime Arbitrators of New York rules and United States maritime law. The panel found that Triorient materially breached the charter and that Cargill was justified in terminating it after the vessel waited more than two months.

The panel considered Triorient’s stated reasons for not supplying cargo, including alleged force-majeure circumstances involving the hacking of a Department of Commerce server and the COVID-19 pandemic. It rejected that defense as speculation and guesswork. The panel awarded Cargill $1,492,717.47, including damages and attorneys’ and arbitrators’ fees, with interest at 9% from July 10, 2020.

Court’s Analysis

Cargill moved for a default judgment, but the court explained that default judgments are generally inappropriate in arbitration-confirmation proceedings. Instead, the court treated the petition like a motion for summary judgment, meaning it reviewed Cargill’s submissions to determine whether there was any genuine factual dispute and whether the award should be confirmed.

The court stated that arbitration awards ordinarily must be confirmed unless they are vacated, modified, or corrected. It found that the award was rendered under a broad arbitration clause and was supported by law and fact. The court concluded that there was no genuine factual dispute about the propriety of the award.

Cargill also requested $500 for costs incurred in the federal court proceeding. Because the charter party allowed awards to include costs and reasonable attorneys’ fees, and because the court found the requested costs reasonable, the court approved that request.

Disposition

Judge P. Castel GRANTED Cargill’s petition to confirm the November 11, 2020 final arbitration award. The order also approved the $500 in requested costs, in addition to the award and accrued interest, directed Cargill to submit a proposed final judgment within seven days, and directed the Clerk to terminate the motions identified as Documents 7 and 15.