Lumbard, Chief Judge, and Friendly and Smith, Circuit Judges.
J. JOSEPH SMITH, Circuit Judge:
Respondent Kingdom appeals from an order of the United States District Court for the Southern District of New York, Wilfred Feinberg, District Judge, directing it to proceed to arbitration. We find no error and affirm the order.
Petrol Shipping, as owner of the tanker Atlantis, entered into a written charter party with respondent dated February 12, 1960, in New York City, and agreed thereby to transport grain acquired by respondent from the United States government pursuant to an agreement between the two governments. The United States was acting under the Agricultural Trade Development and Assistance Act of 1954, 7 U.S.C. 1691 et seq. The grain was to be shipped from Houston, Texas, and/or Baton Rouge, Louisiana, to Piraeus, Greece.
The shipment apparently had to be transported at least 50% by U.S. flag vessels, of which Atlantis is one. See 46 U.S.C. § 1241(b). The ship sustained bottom damage at the discharge berth in Piraeus, allegedly due to an unsafe berth, but the charterer disclaimed responsibility. The shipowner alleged damages were about $287,000.
The charter party contained the following arbitration clause:
Should any dispute arise between Owners and the Charterers, the matter in dispute shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them, shall be final, and for the purpose of enforcing any award, this agreement may be made a rule of the Court. The Arbitrators shall be commercial men.
By letter of September 29, 1961 the shipowner named its arbitrator, and demanded that the charterer appoint its; a further demand was made on December 15, 1961. Although respondent said that it had advised its Foreign Trade Administration in Washington to proceed, no arbitrator was named.
On January 14, 1963 Petrol brought this petition in the District Court for the Southern District of New York, under § 4 of the United States Arbitration Act, 9 U.S.C. § 4. Service of process was allegedly effected by ordinary mail to respondent's Ministry of Trade, State Purchase Directorate, Washington; to Becker & Greenwald, described as proctors for the Directorate; and to respondent's Ministry of Commerce, Purchase Directorate, New York City.
The charterer appeared specially, and submitted a suggestion of the Greek Ambassador, that as Greece was a friendly sovereign and therefore immune, the court lacked jurisdiction. No advice from the State Department was transmitted to the court. The District Court, Judge Dawson, denied the petition to compel arbitration on February 21, 1963, on the ground of sovereign immunity.
This judgment was affirmed by a panel of this court, 326 F.2d 117 (2 Cir. 1964), with Judge Clark dissenting, and suggesting the matter should be reversed and remanded to ascertain the position of the State Department. On rehearing en banc, 332 F.2d 370 (2 Cir. 1964), per curiam, the United States Department of Justice having submitted an amicus curiae brief, the matter was remanded for further development of facts. The case was assigned to Judge Feinberg.
Before the District Court heard the case on remand, a panel of this court decided Victory Transport, Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F.2d 354 (2 Cir. 1964), cert. den. 381 U.S. 934, 85 S. Ct. 1763, 14 L. Ed. 2d 698 (1965), a case substantially similar in its facts to the present case, holding that a branch of the Spanish Ministry of Commerce could be sued without its consent in that suit, and despite its plea of immunity.
On remand in this case, the parties entered into a stipulation in lieu of a hearing, and introduced exhibits, including the Charter Party and certain documents of correspondence with the State Department. These documents were a request by the Greek Ambassador to the State Department for recognition of immunity and a letter from counsel for petitioner to the Legal Advisor of the State Department asking that the Department decline the Ambassador's request, and citing Victory Transport ; the reply of the State Department, declining to recognize any sovereign immunity in the case, on the ground that the matter was jure gestionis, and referring the Ambassador to the Tate letter; and a reply of the Legal Advisor to counsel for petitioner, noting that the Department had declined to intervene.
The District Court requested an amicus curiae brief from the United States, but the government declined, in view of the controlling nature of Victory Transport. By opinion of June 4, 1965, the court directed the Kingdom to proceed to arbitration, refusing to recognize any immunity, ...