Supreme Court rules in Stolt-Nielsen’s favor
The U.S. Supreme Court, in a 5-3 decision, ruled in favor of parcel tanker company Stolt-Nielsen and overturned a Second Circuit Court of Appeals decision by rejecting class arbitration of antitrust claims brought by a purported class led by AnimalFeeds International Corp.
The charter party agreement by AnimalFeeds used an arbitration clause and AnimalFeeds brought a class action antitrust suit against Stolt for price fixing, and that suit was consolidated with similar suits brought by other charterers.
In the decision handed down Tuesday, the Supreme Court held that imposing class arbitration on parties who have not agreed to authorize class arbitration is inconsistent with the Federal Arbitration Act (FAA), and that the arbitration panel exceeded its powers by imposing its own policy choice instead of identifying and applying a rule of decision derived from the FAA or from maritime or New York law.
The case was remanded for further proceedings.
“We are very pleased with today’s decision,” said Niels G. Stolt-Nielsen, chief executive officer of Stolt-Nielsen S.A.