Judge Thomas Griesa
Mahmoud Shaban & Sons Co. (MS&S) sued Mediterranean Shipping and GlobeRunners Inc. to recover $1.2 million after Jordanian authorities condemned rice shipped from California. Bringing suit in the Southern District, and California’s Northern District, MS&S dismissed its California action because the lading bill specified the Southern District as the forum. The court denied American Commodity Co.’s (ACC) dismissal of GlobeRunner’s third-party complaint. GlobeRunner was ACC’s agent when negotiating the lading bill’s forum clause. The court granted ACC a stay to arbitrate its dispute with MS. Applying the test in Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading, it rejected GlobeRunner’s claim that ACC waived its arbitration right by moving to dismiss the third-party complaint rather than seeking to enforce the arbitration pact, and by participating in subsequent litigation. As to prejudice, the court found “substantial expense and loss of time” did not stem from ACC’s litigation. Its choice to seek dismissal before moving to compel arbitration did not itself waive its right to enforce the arbitration clause after the dismissal motion’s resolution.
