Arbitration: Stolt-Nielsen S.A. v. Animalfeeds LITIGATION/CONTROVERSY

WilmerHale successfully represented Odfjell ASA, who joined with other parcel tanker shipping companies, in a case before the Supreme Court that presented the question whether arbitrators may impose class arbitration on parties whose arbitration clauses are silent on the issue.

The shipping contracts at issue required all disputes to be arbitrated. After being ordered by the Second Circuit to arbitrate any antitrust claims it wished to make against the ship owners, Animalfeeds sought to pursue a class arbitration on behalf of itself and other companies that had chartered space on the owners’ vessels. The ship owners objected on the ground that none of the contracts provided for class arbitration. The arbitrators ruled that the contracts were silent on the issue, but that class arbitration should be permitted nonetheless. The district court vacated the arbitrators’ award, but the Second Circuit reinstated it. The Supreme Court granted review to decide whether imposing class arbitration is consistent with the Federal Arbitration Act where the parties’ agreements are silent on the issue.

On April 27, 2010, the Supreme Court ruled in favor of our client Odfjell SE and the other parcel tanker owners, holding that "a party may not be compelled under the [U.S. Federal Arbitration Act] to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so." The decision is likely to have far reaching implications.

WilmerHale played a leading role in drafting the ship owners’ successful petition for certiorari and their brief on the merits, and Partner Seth Waxman argued the case on behalf of all the owners on December 9, 2009. With him on the briefs from WilmerHale were Edward C. DuMont, Steven F. Cherry, Leon B. Greenfield, Christopher E. Babbitt, Daniel S. Volchok and Francesco Valentini. WilmerHale also played a leading role in briefing this issue at earlier stages of the proceedings, and Partner Steven F. Cherry argued the case before the arbitrators, the district court and the Second Circuit.

Parties' Briefs

WilmerHale successfully represented Odfjell ASA, who joined with other parcel tanker shipping companies, in a case before the Supreme Court that presented the question whether arbitrators may impose class arbitration on parties whose arbitration clauses are silent on the issue.

The shipping contracts at issue required all disputes to be arbitrated. After being ordered by the Second Circuit to arbitrate any antitrust claims it wished to make against the ship owners, Animalfeeds sought to pursue a class arbitration on behalf of itself and other companies that had chartered space on the owners’ vessels. The ship owners objected on the ground that none of the contracts provided for class arbitration. The arbitrators ruled that the contracts were silent on the issue, but that class arbitration should be permitted nonetheless. The district court vacated the arbitrators’ award, but the Second Circuit reinstated it. The Supreme Court granted review to decide whether imposing class arbitration is consistent with the Federal Arbitration Act where the parties’ agreements are silent on the issue.

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