Weyerhaeuser Co. v. Western Seas Shipping Co.

Respondent Trans-Pacific Shipping Co. (successor in interest to nominal respondents Eastern Seas and Western Seas) owns two ships that were time chartered by Petitioner Weyerhaeuser in 1974. Weyerhaeuser subsequently subchartered the ships to Respondent Karlander Australia Party Ltd. Disputes later arose concerning Karlander’s actual or proposed use of the ships. Apparently, Weyerhaeuser refused Karlander permission to carry certain cargoes, claiming that Trans-Pacific’s predecessors were forcing it to do so.

Under the standard arbitration clause in the subeharter, Karlander has demanded arbitration with Weyerhaeuser before a board of three commercial arbitrators over the losses it claims to have suffered as a result of Weyerhaeuser’s allegedly unreasonable refusals of permission. In turn, Weyerhaeuser has demanded, under an identical clause in the headcharter, arbitration before three arbitrators with Trans-Pacific over Weyerhaeuser’s right to indemnity from Trans-Pacific for any losses that Karlander may recover in its arbitration. Weyerhaeuser now petitions this Court to compel consolidation of the two arbitrations into a single arbitration before five arbitrators.…