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Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp.

Supreme Court of the United States

December 9, 2009, Argued; April 27, 2010, Decided

No. 08-1198

Opinion

 [*666]  [**1764]  Justice Alito delivered the opinion of the Court.

We granted certiorari in this case to decide whether imposing class arbitration on parties whose arbitration clauses are “silent” on that issue is consistent with the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.

Petitioners are shipping companies that serve a large share of the world market for parcel tankers--seagoing  [****9] vessels with compartments that are separately chartered to customers wishing to ship liquids in small quantities. One of those customers is AnimalFeeds International Corp. (hereinafter AnimalFeeds), which supplies raw ingredients, such as fish oil, to animal-feed producers around the world. AnimalFeeds ships its goods pursuant to a standard contract known in the maritime trade as a charter party.1 Numerous charter parties are in regular use, and the charter party that AnimalFeeds uses is known as the “Vegoilvoy” charter party. Petitioners assert, without contradiction, that charterers  [*667]  like AnimalFeeds, or their agents--not the shipowners--typically select the particular [**1765]  charter party that governs their shipments. Accord, Trowbridge, Admiralty Law Institute: Symposium on Charter Parties: The History, Development, and Characteristics of the Charter Concept, 49 Tulane L. Rev. 743, 753 (1975) (“Voyage charter parties are highly standardized, with many commodities and charterers having their own specialized forms”).

Adopted in 1950, the Vegoilvoy charter party contains the following arbitration clause:

“Arbitration. Any dispute arising from the making, performance or termination of this Charter Party shall be settled in New York, Owner and Charterer each appointing an arbitrator, who shall be a merchant, broker or individual experienced in the shipping business; the two thus chosen, if they cannot agree, shall nominate a third arbitrator who shall be an Admiralty lawyer. Such arbitration shall be conducted in conformity with the provisions and procedure of the United States Arbitration Act [i.e., the FAA], and a judgment of the Court shall be entered upon any award made by said arbitrator.” App. to Pet. for Cert. 69a.

In 2003, a Department of Justice  [***614] criminal investigation revealed that petitioners were engaging in an illegal price-fixing conspiracy. When AnimalFeeds learned of this, it brought a putative class action against petitioners in the District  [****11] Court for the Eastern District of Pennsylvania, asserting antitrust claims for supracompetitive prices that petitioners allegedly charged their customers over a period of several years.

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559 U.S. 662 *; 130 S. Ct. 1758 **; 176 L. Ed. 2d 605 ***; 2010 U.S. LEXIS 3672 ****; 78 U.S.L.W. 4328; 2010-1 Trade Cas. (CCH) P76,982; 2010 AMC 913; 22 Fla. L. Weekly Fed. S 269

STOLT-NIELSEN S. A., et al., Petitioners v. ANIMALFEEDS INTERNATIONAL CORP.

Subsequent History: On remand at Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 624 F.3d 157, 2010 U.S. App. LEXIS 20674 (2d Cir., Oct. 5, 2010)

Prior History:  [****1] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.

Stolt-Nielsen SA v. AnimalFeeds Int'l Corp., 548 F.3d 85, 2008 U.S. App. LEXIS 22838 (2d Cir. N.Y., 2008)

Disposition: Reversed and remanded.

CORE TERMS

arbitration, parties, AnimalFeeds, arbitration clause, charter party, arbitration panel, silent, vacate, custom, class action, class-action, proceedings, arbitration agreement, contracts, district court, disputes, maritime, charter, courts, shipping, supplemental agreement, judicial review, contractual, court of appeals, decisions, plurality, arbitration award, authorize, ripe, quotation

Business & Corporate Compliance, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Civil Procedure, Alternative Dispute Resolution, Arbitration, General Overview, Pretrial Matters, Judicial Review, Justiciability, Ripeness, Tests for Ripeness, Constitutional Law, The Judiciary, Case or Controversy, Ripeness, Governments, Legislation, Effect & Operation, Operability, Federal Arbitration Act, Arbitration Agreements, Admiralty & Maritime Law, Maritime Contracts, Contracts Law, Contract Interpretation, Parol Evidence, Custom & Usage, Ambiguities & Contra Proferentem, Preliminary Considerations, Federal & State Interrelationships, Enforcement of Arbitration, Federal Arbitration Act, Validity of ADR Methods, Orders to Compel Arbitration, Scope, Evidence, Inferences & Presumptions, Presumptions