B-135144, B-137797, APR. 20, 1961

B-135144, B-137797, APR. 20, 1961

TO HEALY, BAILLIE AND BURKE:

BY LETTER DATED DECEMBER 14, 1960, YOU REQUESTED THAT WE RECONSIDER OUR DECISION OF JANUARY 20, 1959, TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, WHEREIN WE HELD THAT ARBITRATION MAY NOT BE INVOKED AGAINST THE UNITED STATES UNDER THE CIRCUMSTANCES INVOLVED.

IN A LETTER DATED JANUARY 28, 1960, WE ADVISED STOKES AND MITCALFE, SOLICITORS FOR THE OWNERS OF THE SS. ADELFOTIS, THAT THE CLAIM FOR DEAD FREIGHT ALLEGED TO BE DUE UNDER A CHARTER PARTY WITH THE GOVERNMENT MAY NOT BE SUBMITTED TO ARBITRATION UNDER ARTICLE 17 OF THE CHARTER PARTY.

IT IS YOUR POSITION THAT AMPLE AUTHORITY EXISTS TO SUPPORT THE OWNERS' POSITION THAT THE GOVERNMENT IS LEGALLY BOUND TO ARBITRATE THE DISPUTE RELATING TO DEAD FREIGHT, CITING COLMAR SS.CORP. V. UNITED STATES, 345 U.S. 446. THE SUPREME COURT HELD THERE THAT A PRIVATELY OWNED AND OPERATED VESSEL ADMITTEDLY "OPERATED * * * FOR THE UNITED STATES" UNDER CHARTER PARTY WITH THE UNITED STATES WAS "EMPLOYED AS A MERCHANT VESSEL" WITHIN THE MEANING OF SECTION 2 OF THE SUITS IN ADMIRALTY ACT, 46 U.S.C. 742, EVEN THOUGH IT WAS ENGAGED IN A WAR MISSION. IN THE LIGHT OF THE FOREGOING, YOU CONTEND THAT WE ERRED IN OUR CONCLUSION THAT THE SS. ADELFOTIS WAS NOT A VESSEL FALLING WITHIN THE ARBITRATION PROVISIONS OF SECTION 9 OF THE ACT, 46 U.S.C. 749. HOWEVER, FOR THE REASONS SET FORTH BELOW, WE DO NOT FEEL THAT ANY DEPARTURE FROM THAT CONCLUSION WOULD BE JUSTIFIED.

IN THE DECISION OF JANUARY 20, 1959, WE STATED THAT:

"SPECIFIC STATUTORY AUTHORITY FOR THE GOVERNMENT TO SUBMIT MARITIME DISPUTES TO ARBITRATION IS CONTAINED IN THE SUITS IN ADMIRALTY ACT, 46 U.S.C. 749, AND THE PUBLIC VESSELS ACT, 46 U.S.C. 786. THE FORMER STATUTE AUTHORIZES THE SECRETARY OF ANY DEPARTMENT,"HAVING CONTROL OF THE POSSESSION OR OPERATION OF ANY MERCHANT VESSEL," TO ARBITRATE ANY CLAIM IN WHICH A LIBEL IN PERSONAM WILL LIE UNDER SECTION 742 OF TITLE 46. ASSUMING THAT THE GENERAL SERVICES ADMINISTRATION COMES WITHIN THE PURVIEW OF THAT STATUTE, WE ARE OF THE VIEW THAT SUCH STATUTE AFFORDS NO AUTHORITY FOR ARBITRATION OF THE INSTANT CLAIM. ARBITRATION IS PERMITTED UNDER THAT STATUTE ONLY WHERE THE VESSEL IS IN THE POSSESSION OR CONTROL OF THE GOVERNMENT. THE CHARTER PARTY INVOLVED IN THE INSTANT CLAIM WAS A VOYAGE CHARTER PARTY WHEREIN THE CONTROL AND POSSESSION OF THE VESSEL REMAINED IN THE HANDS OF THE OWNER. THE ARRANGEMENT CONTEMPLATED BY THE CHARTER PARTY WAS AN AFFREIGHTMENT SOUNDING IN CONTRACT AND NOT A DEMISE OF THE VESSEL. THUS, THE GOVERNMENT, AS CHARTERER, WAS NOT CLOTHED WITH THE CHARACTER OR LEGAL RESPONSIBILITY OF OWNERSHIP. SEE ROJAS V. ROBIN, 90 SO.2D 58, 62, AND THE CASES THEREIN CITED; ARTICLE 2, SCRUTTON ON CHARTER PARTIES; 80 C.J.S. SHIPPING, SECTION 34. ACCORDINGLY, WE ARE OF THE OPINION THAT 46 U.S.C. 749 MAY NOT BE RELIED UPON TO AFFORD A LEGAL STATUTORY BASIS FOR SUBMISSION OF THE CLAIM TO ARBITRATION. * * *"

WHILE ARBITRATION OF ANY CLAIM IN WHICH SUIT WILL LIE UNDER 46 U.S.C. 742 IS PERMITTED BY 46 U.S.C. 749, AS ABOVE INDICATED, THE APPLICATION OF THE LATTER STATUTE IS RESTRICTED IN PLAIN TERMS TO CASES WHERE THE GOVERNMENT HAS "CONTROL OF THE POSSESSION OR OPERATION" OF THE MERCHANT VESSEL. THE COLMAR CASE DID NOT CONSIDER OR PASS UPON THE QUESTION WHETHER A PRIVATELY OWNED AND OPERATED VESSEL UNDER VOYAGE CHARTER TO THE UNITED STATES IS ONE OVER WHICH CONTROL OF THE POSSESSION OR OPERATION OF THE VESSEL WAS IN THE UNITED STATES. THE SUPREME COURT RECOGNIZED THAT THE SS. PORTMAR WAS PRIVATELY OWNED AND OPERATED WHILE EMPLOYED BY THE UNITED STATES AS A MERCHANT VESSEL. HERE, IT IS RECOGNIZED THAT THE SS. ADELFOTIS WAS A MERCHANT VESSEL, BUT FOR THE REASONS INDICATED IN OUR DECISION OF JANUARY 20, 1959, ABOVE QUOTED, WE CANNOT CONCLUDE ON THE PRESENT RECORD THAT POSSESSION OR OPERATION OF SUCH VESSEL WAS UNDER THE CONTROL OF THE GOVERNMENT.

ACCORDINGLY, WE HAVE NO ALTERNATIVE OTHER THAN TO ADHERE TO OUR PRIOR DECISION.