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RHONE MEDITERRANEE COMPAGNIA FRANCESE DI ASSICURAZIONI E RIASSICURAZONI v. ACHILLE LAURO (04/27/83)

argued: April 27, 1983.

RHONE MEDITERRANEE COMPAGNIA FRANCESE DI ASSICURAZIONI E RIASSICURAZONI, APPELLANT
v.
ACHILLE LAURO, D/B/A ACHILLE LAURO ARMATORE, A/K/A ACHILLE LAURO, D/B/A FLOTTA LAURO, A/K/A ACHILLE LAURO, D/B/A LAURO LINES, X COMPANY AND ANTONIO SCOTTO DI CARLO



ON APPEAL FROM THE DISTRICT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN.

Gibbons, Sloviter and Becker, Circuit Judges.

Author: Gibbons

Opinion OF THE COURT

GIBBONS, Circuit Judge.

Rhone Mediterranee Compagnia Francese di Assicurazioni E Riassicurazioni (Rhone), a casualty insurer, appeals from an order of the District Court of the Virgin Islands staying Rhone's action pending arbitration. The action results from a fire loss which occurred when the vessel Angelina Lauro burned at the dock of the East Indian Co. Ltd. in Charlotte Amalie, St. Thomas. At the time of the fire the vessel was under time charter to Costa Armatori S.P.A. (Costa), an Italian Corporation. Rhone insured Costa and reimbursed it for property and fuel losses totaling over one million dollars. Rhone, as subrogee of Costa, sued the owner of the vessel, Achille Lauro (Lauro) and its master, Antonio Scotto di Carlo, alleging breach of the Lauro-Costa time charter, unseaworthiness, and negligence of the crew. The district court granted defendants' motion for a stay of the action pending arbitration, and Rhone appeals.*fn1 The defendants have moved to dismiss the appeal for lack of an appealable order. We hold that we have appellate jurisdiction, and we affirm.

I. Appellate Jurisdiction

The defendants' motion to dismiss Rhone's appeal is predicated on Schoenamsgruber v. Hamburg American Line, 294 U.S. 454, 55 S. Ct. 475, 79 L. Ed. 989 (1935), which holds that a district court order staying an admiralty suit pending arbitration is an interlocutory order for purposes of the predecessor to 28 U.S.C. § 1291 (1976), and is not an injunction within the meaning of the predecessor to 28 U.S.C. § 1292(a) (1976). The Court reasoned:

While courts of admiralty have capacity to apply equitable principles in order to better attain justice, they do not have general equitable jurisdiction and, . . . they do not issue injunctions.

Id. 457-58 (footnotes omitted). For this reason stays of admiralty actions have been held not to fall within the well-settled Enelow-Ettelson rule*fn2 that a stay of an action at law is the equivalent of an injunction against proceeding with that action, appealable under 28 U.S.C. § 1292(a). Diacon-Zadeh v. Denizyollari, 196 F.2d 491, 492 (3d Cir. 1952) (per curiam); 9 J Moore's Federal Practice P110.19[3] (2d ed. 1983).

The Schoenamsgruber rule does not apply in this case, however, because Rhone sues for breach of a time charter agreement. The District Court of the Virgin Islands, a court of general jurisdiction, can entertain actions at law which, despite their connection with maritime commerce, fall within the saving to suitors clause in 28 U.S.C. § 1333(a) (1976). An action for breach of a time charter agreement may be brought in personam in a law court. E.g., Carich v. Rederi Aì Nordie, 389 F.2d 692, 695 (2d Cir. 1968) (underlying action for violation of a charter party is at law and stay order is appealable); Mailloux v. Elxnit, 7 Alaska 192 (1924) (action for money due for a charter is a common law action in contract). Such an action may be brought in admiralty, but may also be brought as an ordinary civil action in law in a court of general jurisdiction. G. Gilmore & C. Black, The Law of Admiralty, § 1-13 at 40 (2d Ed. 1975). This being so, appealability is controlled by cases such as J. & R. Sportswear & Co. v. Bobbie Brooks, Inc., 611 F.2d 29 (3d Cir. 1979) (denial of stay of breach of contract action for money damages is appealable), Becker Autoradio U.S.A., Inc. v. Becker Autoradiowerk GmbH, 585 F.2d 39, 42 n.7 (3d Cir. 1978) (denial of stay of action alleging breach of agreement to renew franchise appealable), Gavlik Construction Co. v. H.F. Campbell Co., 526 F.2d 777, 781-82 (3d Cir. 1975) (stay of action for services under contract is appealable), and McCreary Tire & Rubber Company v. CEAT, 501 F.2d 1032, 1034-35 (3d Cir. 1974) (denial of stay of action seeking money damages appealable).

II. The Merits

As subrogee, Rhone stands in place of its insured, the time charterer Costa. In the time charter contract there is a clause:

23. Arbitration

Any dispute arising under the Charter to be referred to arbitration in London (or such other place as may be agreed according to box 24) one arbitrator to be nominated by the Owners and the other by the Charterers, and in case the Arbitrators shall not agree then to the decision of an Umpire to be appointed by them, the ...


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