Prudential Lines Inc. v. Exxon Corporation (The Saroula) - U.S. Ct. of Appeals (2nd Circuit) (Van Graafeiland and Pierce C.JJ. and Wyatt D.J.) - 28 March 1983

Court of Appeals compels arbitration under charterparty

In 1961 Prudential “bareboat” chartered the vessel Saroula for a 15-year term from May 1964. Clause 16(a) of the charterparty required Exxon to redeliver the vessel in as good order as it was at the time of delivery, except for damage resulting from ordinary wear and tear. Clause 16(b) called for a joint survey of the vessel at the time of redelivery by representatives of the two parties, and required that such representatives should, by an instrument in writing, jointly agree upon and designate the repairs or work necessary to place the vessel on the date of redelivery in the condition required by clause 16(a). Clause 16(d) provided that acceptance of the vessel by the owner should be conclusive evidence of the charterers’ compliance with any and all of the charterers’ obligations under the charter with respect to the vessel’s class and condition at the time of redelivery.