ICC Chemical Corporation sued Nordic Tankers Trading A/S concerning a cancelled charter agreement. Per the agreement, Nordic was scheduled to have its vessel present at the port ready to be loaded with ICC’s chemical cargo. The vessel arrived six days late and ICC was forced to pay a higher price for the cargo as a result. Once the vessel arrived, ICC’s inspector tested the vessel’s tanks to avoid blending the chemical cargo. The inspector found some of the tanks to be “off-color.” Nordic attempted to wash the tanks several times, but the tanks continued to fail inspection tests. Nordic rejected further tank cleaning and requested cancellation of the agreement. ICC then initiated arbitration against Nordic alleging that it suffered significant losses as a result of Nordic’s allegedly wrongful cancellation. In arbitration, the panel issued an award in favor of Nordic, finding that they made every possible effort to present a clean and suitable vessel. ICC filed a motion in New York federal court to vacate the award, alleging that the panel committed a manifest disregard of the law by misallocating the burden of proof by requiring ICC to show that the cargo was not contaminated, rather than requiring Nordic to show due diligence in providing a seaworthy ship. The court found, however, that the record did not support an erroneous allocation of the burden of proof; the panel had determined that the dispute surrounded whether the cargo was contaminated, and appropriately placed the burden on ICC to show that it was not. Accordingly, the court found no manifest disregard and confirmed the award. ICC Chem. Corp. v. Nordic Tankers Trading A/S, Case No. 15-cv-9766-KPF (USDC S.D.N.Y. May 12, 2016).
