Ocean World Lines, Inc. v. Transocean Shipping Transportagentur GesmbH

At a glance

Parties

Ocean World Lines, Inc. (New York) v. Transocean Shipping Transportagentur GesmbH (Austria)

Case no.

U.S. District Court, S.D.N.Y., No. 19 Civ. 43 (AT)

Court

U.S. District Court for the Southern District of New York (Analisa Torres, District Judge)

Underlying award(s)

Society of Maritime Arbitrators (SMA) Partial Final Award (January 2014) and Final Award (January 2016), New York

Treaty

New York Convention, as implemented by 9 U.S.C. §§ 201–208 (contract arbitration clause: Clause 16 of the 2009 agency agreement)

Sector

Shipping; commercial agency

Outcome

Petition to confirm the SMA award granted; requests for an anti-suit (anti-enforcement) injunction against the Austrian judgment and for attorney's fees denied (16 June 2020).

Amount

SMA award: USD 192,304.39, including attorney's fees, interest and costs. Austrian judgment in favour of TOS: €250,000. OWL's request for attorney's fees in the court proceeding was denied.

The dispute

Ocean World Lines (OWL), a New York corporation, appointed Transocean Shipping (TOS), an Austrian company, as its agent in Austria under a 2009 commercial agency agreement. The agreement required TOS to pay amounts owed within 60 days (Clause 5) and provided for SMA arbitration in New York under New York law (Clause 16). OWL terminated the agreement in 2012 after TOS failed to bring its accounts current. An SMA panel found the termination valid and awarded OWL USD 192,304.39. Meanwhile TOS sued OWL in the Vienna Commercial Court for compensation under § 24 of the Austrian Commercial Agency Act; the Austrian Supreme Court held that the arbitration agreement could not bar those claims, and TOS obtained a €250,000 judgment. OWL petitioned in New York to confirm the award, to obtain a declaration that the Austrian judgment was invalid and an injunction against its enforcement, and to recover attorney's fees.

Key holdings

1. The award falls under the New York Convention because it arises from a commercial contract and one party is foreign. TOS did not dispute that the award was valid and enforceable, did not prove any Convention defence, and the award was not made in manifest disregard of the law. The award is confirmed. pp. 3–5
2. TOS appears to have already paid the award in full, but prior compliance is not a ground to refuse confirmation. At the confirmation stage the court does not consider compliance. p. 5 n. 2
3. OWL showed a substantial controversy sufficient for jurisdiction under the Declaratory Judgment Act. It still had to show that it was entitled to the relief, namely that the Austrian judgment was invalid in light of the award. p. 6
4. Relief against an existing foreign judgment is an anti-enforcement injunction, not an anti-suit injunction, so the China Trade factors do not apply. Following Chevron v. Naranjo, international comity weighs against such relief. The Austrian courts, including the Austrian Supreme Court, considered the award and held that it did not bar TOS's claims under Austrian and EU law. Nothing in the Convention or the FAA allows the court to review and invalidate decisions of foreign courts. The declaration and injunction are denied. pp. 6–9
5. Attorney's fees are denied for two reasons. OWL did not prevail on the conduct it called vexatious, namely the Austrian litigation. And TOS did not act in bad faith: it started the Austrian case before the panel ruled, and the two proceedings concerned different claims. pp. 9–10

Procedural history

1. 2009OWL and TOS sign the commercial agency agreement.
2. 2012OWL terminates the agreement after TOS fails to bring its accounts current.
3. 2013SMA arbitration begins and a three-member panel is appointed. TOS sues OWL in the Vienna Commercial Court under the Austrian Commercial Agency Act.
4. January 2014SMA Partial Final Award: the agreement and the arbitration clause are binding.
5. January 2016SMA Final Award for OWL of USD 192,304.39.
6. Not statedThe Austrian Supreme Court holds that the arbitration agreement cannot prevent TOS's Commercial Agency Act claims. On remand the Vienna Commercial Court awards TOS €250,000.
7. Late 2018TOS moves to enforce the Austrian judgment, including by serving a garnishment notice in the Netherlands.
8. 16 June 2020The S.D.N.Y. confirms the award and denies the injunction and the attorney's fees.

Tribunal, counsel and experts

Decided by

• Analisa Torres Judge, U.S. District Court, Southern District of New York

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Keywords

• New York Convention
• confirmation of award
• Society of Maritime Arbitrators
• SMA
• anti-suit injunction
• anti-enforcement injunction
• international comity
• Chevron v. Naranjo
• China Trade test
• Austrian Commercial Agency Act
• commercial agency
• agent compensation
• shipping
• Austrian Supreme Court
• attorney's fees
• Federal Arbitration Act
• manifest disregard of the law
• parallel proceedings

Summary generated with AI from the published documents — refer to the award for the authoritative text.