Spliethoff Transport B.V. v. Phyto-Charter Inc.

Background

Spliethoff Transport B.V. brought the case seeking an order compelling arbitration and appointing an arbitrator in its dispute with Phyto-Charter Inc. over an alleged breach of a maritime contract. The court appointed Charles B. Anderson as the single arbitrator. On September 15, 2022, Anderson issued a final award ordering Phyto-Charter to pay Spliethoff $633,558.68, including $30,144 in Spliethoff’s attorneys’ fees and costs.

Motions and arguments

Phyto-Charter moved to vacate, or cancel, the final award. It argued that Anderson disregarded the law by awarding attorneys’ fees, acted with evident partiality because of communications with Spliethoff’s counsel about arbitrator fees, engaged in procedural misconduct, and exceeded his authority. Phyto-Charter also moved for discovery, a stay, and disqualification of Spliethoff’s counsel based on an alleged improper agreement between counsel and Anderson.

Spliethoff cross-moved to confirm the award. It also sought attorneys’ fees for defending against what it described as frivolous, unreasonable, and groundless arguments. The court allowed Spliethoff to submit a formal declaration supporting that fee request but did not award those fees in this opinion.

Court’s analysis

The court held that the arbitrator had a sufficient legal basis for awarding attorneys’ fees, so the award did not show the extreme disregard of law required for cancellation. The court also rejected the evident-partiality argument. Anderson had told both parties that they were jointly responsible for his fees, and Spliethoff paid half of Phyto-Charter’s share after Phyto-Charter refused to advance it. The court found no evidence that this payment caused the award to change or that it caused bias.

The court further found that Phyto-Charter had an adequate opportunity to present evidence and arguments, and therefore had not shown the fundamental unfairness needed to establish procedural misconduct. Phyto-Charter also offered no colorable argument or evidence that Anderson exceeded his authority.

Rulings

The court denied Phyto-Charter’s motion to vacate the final arbitration award. It granted Spliethoff’s cross-motion to confirm the final award. It denied Phyto-Charter’s motions for discovery and a stay as moot, and denied the motion to disqualify Spliethoff’s counsel. Judge J. Paul Oetken directed the Clerk of Court to enter judgment confirming the award and close the case.