United States District Court, D. Connecticut
PRELIMINARY INJUNCTION ORDER
CHARLES S. HAIGHT, JR. SENIOR UNITED STATES DISTRICT JUDGE.
matter came before the Court on motion by Plaintiff NCL
(Bahamas) Ltd. d/b/a Norwegian Cruise Lines
("NCL"), requesting "a stay of arbitration
and/or an injunction to prevent the Defendants [O.W. Bunker
USA Inc. ("O.W. USA") and the OWB USA Liquidating
Trustee ("Liquidating Trustee")] from pursuing
arbitration proceedings that the OWB USA Liquidating Trustee
has attempted to initiate in London, England." Doc. 2,
at 1. See also Doc. 15 (NCL's "Emergency
Motion for Temporary Restraining Order and Preliminary
Injunction"), at 1-2.
demand that NCL participate in an arbitration in London to
determine NCL's liability to pay an invoice O.W. USA sent
to NCL for the value of bunkers delivered to one of NCL's
ships, the M/V NORWEGIAN SPIRIT, by the Greek supplier EKO at
the port of Pireaus, Greece, on October 18, 2014.
See Doc. 2-4 ("Invoice" dated "18.
October 2014"). O.W. USA makes this demand pursuant to
Article P.1 of the "OW Bunker Group Terms and Conditions
for Sale of Marine Bunkers" [Doc. 2-5] (herein "the
OWB T&C"), which contains a provision dictating that
the agreement "shall be governed and construed in
accordance with English law" and disputes arising under
the agreement "shall be finally settled by arbitration
in London." Doc. 2-5, at 11.
particular circumstances attending the EKO bunkering in
Piraeus in October 2014, NCL has responded to the arbitration
demand by asserting that there is no contract between O.W.
USA and NCL obligating NCL to arbitrate O.W. USA's claim
in London. NCL has based that contention upon its
interpretation of certain provisions in the OWB T&C,
which were incorporated by reference in the sales order for
the bunkers delivery in question. Specifically, "in
circumstances where the physical supply of the Bunkers is
being undertaken by a third party which insists that the
Buyer is also bound by its own terms and conditions, "
Article L.4(a), in the event that the third party's terms
include "[a] different law and/or forum selection for
disputes, " those different selections are, and in this
case have been, "incorporated into" the contract,
NCL's barrister, Mr. Karia, explained:
The prima facie position [of NCL] is that the
contract between the Seller [OW USA] and the Buyer [NCL] is
subject to the OWB T&Cs, including the English law and
London arbitration clause in clause P.1 (cls. A.2 & P.1).
Clause L.4, however, makes an exception to that prima
facie rule when the third party physically supplying the
bunkers to the Buyer (i.e. "the physical supplier"
- here, EKO) "insists that the Buyer is also bound
by its [i.e. the physical supplier's] own terms
and conditions." (cl. L.4(a)).
In that situation, the Contract is varied so as to
incorporate that physical supplier's standard terms and
conditions, which then take precedence over the OWB T&Cs.
Doc. 39-1 ("Expert Declaration of Chirag Karia, Q.C.,
" dated June 16, 2017), ¶¶14.1-14.3 (emphasis
opposition, O.W. USA contends that on a proper construction
of the OWB T&C, the parties' contractual obligation
to arbitrate disputes in London is not affected by events at
the bunkers delivery port of Piraeus. In particular, O.W. USA
asserts that EKO's choice of Greek law and its forum
selection of Greece in its sales contracts with O.W., have
not superseded the London arbitration clause in the OWB
T&C. See Doc. 34, at 9-11.
review of the parties' briefs and numerous declarations
of their respective barristers, Messrs. Karia and Mander, the
Court has determined that there is no written agreement
obligating NCL to arbitrate the claim (relating to the
October 2014 EKO bunkering) in London. See Doc.
47 ("Ruling on Plaintiff's Motion to Stay or Enjoin
Arbitration, " filed November 29, 2017). Article L.4 of
the contract for supply of bunkers to the M/V NORWEGIAN
SPIRIT, between O.W. USA as Seller and NCL as Buyer, has
varied and superseded the provisions of the OWB T&C's
Article P.1. The sale was performed "in circumstances
where the physical supply of the Bunkers [was] being
undertaken by a third party [EKO] which insist[ed] that the
Buyer [was] also bound by its own terms and conditions,
" Article L.4(a). See Doc. 2-5, at 9. Third
party EKO's terms included "[a] different law and/or
forum selection for disputes, " so that those different
selections were "incorporated into" the terms and
conditions of the OWB T&C, Article L.4(b)(iii).
See Doc. 2-5, at 9; see also Doc. 47
(Ruling, filed November 29, 2017).
general, in the Second Circuit, "[a] party seeking a
preliminary injunction must demonstrate: (1) a likelihood of
success on the merits or ... sufficiently serious questions
going to the merits to make them a fair ground for litigation
and a balance of hardships tipping decidedly in the
plaintiff's favor; (2) a likelihood of irreparable injury
in the absence of an injunction; (3) that the balance of
hardships tips in the plaintiff's favor; and (4) that the
public interest would not be disserved by the issuance of an
injunction." Benihana, Inc. v. Benihana of Tokyo,
LLC, 784 F.3d 887, 895 (2d Cir. 2015) (citation and
internal quotation marks omitted).
as stated in the Court's Ruling, the Second Circuit
holdings in In re Am. Exp. Fin. Advisors Sec.
Litig., 672 F.3d 113, 142 (2d Cir. 2011), and
Goldman, Sachs & Co. v. Golden Empire Sch. Fin,
Auth., 764 F.3d 210, 213-14 (2d Cir. 2014), arguably
suggest "that a preliminary injunction enjoining an
arbitration in these particular circumstances does not depend
for its issuance upon the movant's showing of irreparable
harm if the injunction is not granted or likelihood of
success on the merits, prerequisites for a preliminary
injunction in other contexts." Doc. 47, at 41-42.
the Court alternatively includes in this Order the typical
prerequisites for preliminary injunction to ensure
completeness of analyses and reasoning. The Second Circuit
has observed that a party "would be irreparably harmed
by being forced to expend time and resources arbitrating an
issue that is not arbitrable, and for which any award would
not be enforceable." Merrill Lynch Inv. Managers v.
Optibase, Ltd., 337 F.3d 125, 129 (2d Cir. 2003)
(quoting Maryland Cas. Co. v. Realty Advisory Bd. on
Labor Relations, 107 F.3d 979, 985 (2d Cir.1997)).
See also J.P. Morgan Sec. LLC v. Quinnipiac Univ.,
No. 14 Civ. 429 (PAE), 2015 WL 2452406, at *6 (S.D.N.Y. May
22, 2015) ("As a matter of law, there is irreparable
harm when a party is 'compelled to arbitrate ... without
having agreed to arbitration' because that party is
'forced to expend time and resources arbitrating an issue
that is not arbitrable.'") (quoting NASDAQ OMX
Group, Inc. v. UBS Secs. LLC, No. 13 Civ. 2244(RWS),
2013 WL 3942948, at *12 (S.D.N.Y. June 18, 2013)); UBS
Sec. LLC v. Voegeli, 684 F.Supp.2d 351, 354 (S.D.N.Y.
2010) ("[I]t is not merely expense that underlies the
prohibition against forcing a party to arbitrate a ...