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TOUTON v. M. V. RIZCUN TRADER

July 13, 1998

TOUTON, S.A.
v.
M. V. RIZCUN TRADER, et al.



The opinion of the court was delivered by: HART

OPINION AND ORDER

 JACOB P. HART

 UNITED STATES MAGISTRATE JUDGE

 DATED: July 13, 1998

 I. Introduction

 This matter concerns a dispute arising from damage to a shipment of cocoa from the Ivory Coast to Philadelphia. The parties are Touton, S.A. ("Touton"), a French corporation dealing in cocoa; Latif Maritime, Ltd. ("Latif"), owner of the M.V. Rizcun Trader; and Winston Shipping Corporation ("Winston"), the ship's charterer. A detailed version of the facts can be found in this Court's Opinion and Order of April 24, 1998, in which we ordered a stay of these proceedings pending arbitration in London, based on an agreement to arbitrate contained in a Liner Booking Note between Touton and Winston. Today, however, the Court grants Touton's motion to vacate its earlier order, lift the stay, and restore this matter to the Court's active docket.

 II. Background

 A. The Filing of the Complaint

 Phibro Commodities, which had contracted to purchase the shipment of cocoa from Touton, filed this action on March 21, 1997. At the same time, Phibro moved for expedited discovery to preserve certain evidence. Touton, originally a defendant in the action, became the plaintiff when it agreed to retain title to the cargo.

 On March 26, 1997, Judge Marjorie O. Rendell granted the expedited discovery, and refused to dismiss the action. She specified, however, that her ruling was limited to the issue of whether limited discovery was necessary to perpetuate testimony, and did not express any opinion on the forum issues raised by the defendants.

 Touton filed an amended complaint on April 10, 1997, and served it upon Latif and Winston. Winston answered the amended complaint on October 29, 1997. In its answer, Winston asserted the right to arbitrate.

 B. Winston's Motion to Stay

 On December 11, 1997, Winston filed a Motion to Stay Proceedings Pending Arbitration. Touton and Latif both opposed Winston's Motion to Stay, arguing that (a) the dispute was not subject to arbitration; and (b) even if it were, Winston had waived its right to arbitration by its delay in seeking a stay. They pointed out that Winston could have sought a stay at the same time it filed its Answer, on October 29, 1997, or on any date after April 10, 1997, when the Amended Complaint was filed. Instead, it waited until December 11, 1997.

 Touton and Latif also argued that they were prejudiced by Winston's delay, in that Winston had access to material Touton and Latif exchanged in discovery. Touton argued, as well, that it was prejudiced by the fact that Winston raised a demurrage issue in its ...


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