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Final Award

A. Introduction

[1].
In its Partial Final Award of January 22, 2014,1 the panel held that a binding and enforceable Agency Agreement (Agreement) was entered into between Ocean World Lines, Inc. (OWL) and Transocean Shipping Transportagentur GESMBH (TOS) on July 1, 2005; furthermore, that the arbitration clause formed an integral part of the Agreement and that the Choice of Law and Jurisdiction Clause provided that New York law as well as the Rules and Procedures of the Society of Maritime Arbitrators, Inc. (SMA) should apply and govern.
[2].
The purpose of this Final Award is to address the merits of the parties' claims and counterclaims and establish the quantum of damages arising from either OWL's wrongful termination or TOS's breach of the Agreement.

B. Proceeding

[3].
Prior to the formation of this panel on June 1, 2013, OWL had prepared and submitted a "Memorandum in Support of Final Award for Breach of Agency Agreement" on February 22, 2013.
[4].
Considering the protracted developments of this arbitration, a timeline of documentary submissions, briefs and hearings would be helpful.

• OWL's "Memorandum in Support of Final Award for Breach of Agency Agreement" dated February 22, 2013:

➢ Declaration of Robert E. Noonan dated February 21, 2013;

➢ Declaration of Cynthia M. Lochard dated February 20, 2013;

➢ Declaration of Daniel A. Ludwig dated February 20, 2013.

• On June 1, 2013, this arbitration panel was completed.

• On June 28, 2013, TOS submitted its initial response, including the following:

➢ Affidavit of Claudia Knaack dated June 21, 2013;

➢ Affidavit of Konstantin Kaiser dated June 24, 2013;

➢ Affidavit of Patrick Friess dated June 24, 2013;

➢ First Declaration of Peter Czajkowski dated June 28, 2013;

➢ Affidavit of Cord Bruegge dated June 25, 2013.

➢ Declaration of Manfred Schlöge dated June 28, 2013.

• OWL's "Reply to Respondent's Initial Submission" dated July 31, 2013.

• TOS's "Respondent's Response to Claimant's Reply Submission" dated October 11, 2013

➢ Second Declaration of Peter Czajkowski dated October 11, 2013;

➢ Declaration of Alan E. Baer dated October 11, 2013.

• October 15, 2013 - First hearing (organizational session).

• January 22, 2014 - Partial Final Award.

• May 8, 2014 - OWL's request for security.

• May 28, 2014 - Second hearing (testimony of Robert E. Noonan).

• May 29, 2014 - Third hearing (testimony of Daniel Ludwig and Cynthia Lochard).

• October 16, 2014 - Fourth hearing (testimony of Alan Baer).

• December 3, 2014 - Fifth hearing (testimony of Peter Czajkowski).

• On March 13, 2015 - OWL submitted its Post-Arbitration Brief and TOS its Initial Final Submission.

• Both parties submitted reply briefs on March 31, 2015.

• On October 6, 2015, the panel advised counsel that the record was closed and that the arbitrators would continue with their deliberation.

[5].
It would also be helpful to identify the affiliations of the witnesses based upon the available record. For OWL's three witnesses, the details are:

• Robert E. Noonan, President and CEO of OWL, a division of Pacer International (March 2012 - May 2014)

• Cynthia M. Lochard, Director of Corporate and International Accounting of OWL (April 2010 - March 2014).

• Daniel A. Ludwig, Vice President of Finance of Pacer (December 2011 -March 2014).

[6].
TOS's witness backgrounds are:

• Alan E. Baer, President of TTS/TTS Worldwide (March 2012 to present); OWL (mid 1988; from July 1989 - January 2011 as President).

• Peter Czajkowski, Managing Director and/or Principal of TOS (2005 to present).

C. Claims

[7].
OWL seeks an award for the following:2

• Failure to pay sums on overdue accounts:

Amounts owed OWL $150,849.54

Amounts owed OWL GmbH € 98,419.23

• Raiding of OWL GmbH employees:

Loss of profits $690,000.00

Mitigation costs $343,886.00

• Attorneys' fees and costs $324,252.253

[8].
TOS rejects OWL's claims in full and asserts the following counterclaims:4

• Loss of profits $140,000.00

• Account balance due $ 71,058.61

• Attorneys' fees and costs $123,391.175

Both parties are also seeking interest on the principal amounts awarded.

D. Relevant Agency Agreement Terms

[9].
Clause 4: Agent Compensation. Unless agreed otherwise in writing, the Parties have agreed to split the Profit (as defined below) from each shipment on Profit Split Basis set forth in Appendix I as confirmed in the Agent Communication Sheet (the "ACS"). The "Profit" from a shipment means the: difference between the transportation charges payable by the customer and all costs of purchased transportation, the handling and insurance fees charged by OWL or Agent, whichever Party is receiving the cargo and other direct, out of pocket costs associated with the shipment. The Profit will be determined based on the information in the ACS which shall establish amounts to be settled between the Parties with respect to a particular shipment. Disputes regarding information (and resulting amounts to be settled between the Parties) in the ACS are waived and released unless the Party receiving the ACS has notified the Party issuing the ACS of the dispute in writing within 1 week after the shipment has arrived at the destination port.

Clause 5: Settlement. Settlement of all transactions should be done monthly for all transactions completed during the month. Transfer of funds to be done via wire transfer to the bank details specified in Appendix 1. Accounts to be maintained with no balances past due 60 days. Settlement information to be provided using a MS Excel worksheet. Upon verification and confirmation of the statement accounts b both Parties, remittances shall be wire transferred to the bank detailed in Appendix 1. Such remittances will be wire transferred before the 15th day of the followoing month if the settlement amount exceeds US$1,000. If the settlement amount is under US$1,000, the settlement will be carried forward to the following month. The payment of air shipment should be settled no later than 15 days after the cargo departure. The Parties will resolve discrepancies with each other amicably and in good faith. Both Parties will be responsible for bank charges occurred locally.

Clause 10: Term and Termination. This Agreement and Agent's appointment hereunder shall become effective as of the earlier of the date [sic] set forth in the first paragraph of this Agreement or the execution of this Agreement by the Parties (such date, the "Effective Date"). This Agreement shall remain in effect for a period of one (1) year from the Effective Date and shall be automatically renewed for one (1) year if not previously terminated. Notwithstanding the foregoing, either Party shall have the right to terminate this Agreement for any reason upon providing the other Party with sixty (60) days' prior written notice; provided, however, that if agent terminates this Agreement pursuant to this Paragraph 9 while OWL has cargo in transit to or from Agent, Agent's termination of this Agreement shall not be effective until such cargo has reached its final destination. OWL may immediately terminate the Agreement upon written notice to Agent if any of the following events occur: (a) any material breach of the Agreement by Agent its affiliates or sub agents; (b) the filing of a bankruptcy petition against Agent; or (c) a change in Agent's ownership structure. Both Parties agree that any of the above mentioned kind termination frees both Parties from any further liability or monetary considerations from that point forward; provided, however, that any moneys or obligations due and owing from one Party to the other at the time of termination shall be settled within sixty (60) days of the date of the Agreement's termination. OWL reserves the right to discontinue the service on any trade lane for which Agent acts by providing Agent sixty (60) days' notice. In such a case, Agent agrees not to request any financial pay-off of OWL for having lost the agency for such lane. The provisions of Sections, 3, 6, 1, 9, 10, 12 and 16 (and any other provisions which by its nature should survive) will survive termination of this Agreement and remain in effect.

Clause 12: Nonsolicitation of Employees. During the term of this Agreement and for a period of six months after termination, neither Party will solicit the other Party's employees who have become known to it as a result of the other Party's performance under this Agreement. These restrictions will not prevent a Party from soliciting or hiring a person by means of a help-wanted advertisement, web posting or similar public solicitation.

Clause 14: Modification, Waiver and Cumulative Remedies. This Agreement may not be amended, released, discharged, rescinded or abandoned, except by a written agreement duly executed by each of the Parties. The failure of any Party at any time to enforce any of the provisions of this Agreement will in no way constitute or be construed as a waiver of such provision or of any other provision hereof, nor in any way affect the validity of, or the right thereafter to enforce, each and every provision of this Agreement. All rights and remedies provided for in this Agreement are cumulative and may, to the extent permitted by law, be exercised at the same time or separately. The exercise of any one right or remedy shall not be deemed to be an election of such right or remedy or to preclude the exercise of any other right or remedy.

Clause 16: Choice of Law and Jurisdiction. This Agreement shall be governed by and interpreted in accordance with the laws of the state of New York, disregarding any conflict of law rules that may direct the application of the laws of another jurisdiction. All claims or actions under this Agreement shall be resolved by arbitration in New York, NY, or such other place as the Parties may mutually agree pursuant to the rules and procedures of the Society of Maritime Arbitrators. There shall be no restrictions on the nationality of the arbitrator. Except by agreement of the Parties otherwise, there shall be no pre-hearing discovery. The decision of the arbitrator shall be final, binding, and not subject to further review. In all other respects, the procedural rules of the Society of Maritime Arbitrators shall govern the conduct of the arbitration; provided, however, that if the procedural rules of the Society of Maritime Arbitrators do not contain a provision applicable to a given procedural issue, then the laws of the State of New York shall govern. Any court, tribunal or other forum as may properly assert jurisdiction may enforce the decision of the arbitrator.

ATTACHMENT 'A' - COMPENSATION BASIS

A) Westbound/Export to other countries

• USA destinations:

Lumpsum profit share to be negotiated once/twice a year, depending on the market development.

Non USA destinations:

1. If the cargo was booked by you the following formula will apply:

Gross profit, i.e. difference between the buying rates and the selling rates (all income and costs factors including profit of pre and oncarriages, windfall profits etc are to be calculated) minus USD 16 per container for the P&I insurance, minus USD X (as per OWL agency list section compensation of agents) per B/L (file) for the agent in the destination port as a lumpsum dispatch fee, you may negotiate different amounts.

The profit share for OWL Hamburg is included in the lumpsum payments.

B) IMPORT to your country

Dispatch of cargo

1. USD 40 per file.

Routing of cargo

[10].
If you routed/did the bookings ex USA origin:

Profit share:

Gross profit, i.e. difference between the buying rates and the selling rates (all income and costs factors including profits of pre and oncarriages, windfall profits etc are to be calculated) minus USD 16 per container for the P&I insurance.

Thereafter, 50/50 percent profit share with OWL New York.

Example:

Buying rate is USD 1000,- all in Selling rate is USD 1266,- all in

The movement is one container from New York to your port

USD 266 is the gross margin Minus USD 16 insurance

USD 250 net profit

USD 125 for you and USD 125 for OWL New York: No sharing with Hamburg in such cases.

C) Cross trade fee split

The fee split for a 3 agents business should be 50/25/25. 50 Percent to the agent who came up with the biz, 25 Percent to the agent in the load port and 25 percent to the agent in the discharge port. On non USA business the agency fee for the dispatching agent is according to the agency list with charges that is circulated from time to time.

E. Contentions of the Parties

[11].
OWL has submitted arguments, testimony and voluminous documents in support of that:

• It has met its burden of proof to establish TOS's multiple breaches of the Agency Agreement.

• It has established the amounts owed by TOS for overdue accounts under the Agency Agreement.

➢ TOS claims are for amounts due to TOS Group entities outside the scope of arbitration under the Agency Agreement.

➢ Under New York law, the terms of the Agency Agreement cannot be modified by the parties' course of dealing.

• It has established direct financial loss due to TOS's solicitation (and hiring) of OWL's employees and breach of contract, fiduciary and loyalties duties under the Agency Agreement.

• TOS's claims for amounts owed by OWL Hamburg to TOS Vancouver or TOS Canada are outside the scope of the arbitration provision of the Agency Agreement.

• TOS's counterclaims are without merit, wholly unsupported and should be denied.

[12].
Likewise TOS has introduced arguments, testimony and documents in rebuttal of OWL's claims and in support of its own claims.

• OWL has failed to carry its burden of proof.

• OWL's claim for amounts allegedly due and owing from TOS to OWL must be denied.

➢ TOS did not breach the Agency Agreement.

➢ As part of the parties' ongoing reconciliation process, TOS validly disputed any balance due in favor of OWL.

➢ OWL had no right to terminate the Agency Agreement for cause.

➢ OWL's "account stated" claim is meritless.

➢ TOS validly negotiated the elimination of the lumpsum profit sharing payment and thus OWL is not entitled to €98,419.23 allegedly due to OWL Hamburg.

• OWL's non-solicitation claim is factually and legally meritless and, in any event, must be denied because OWL failed to carry its burden of proof.

• OWL's claim against TOS Canada is not properly before this panel because it does not arise under the Agency Agreement.

• TOS is entitled to damages on its counterclaim.

F. Discussion and Decision

[13].
The arbitrators have carefully considered the parties' submissions and arguments, the underlying terms of the Agreement and applicable law.
[14].
This arbitration involves two parties which had a long-running and very successful relationship for more than 20 years, during which time, they operated without any written agreement. In 2009, when OWL was acquired by Pacer International, it appears that the new ownership required a written agreement between OWL and TOS. The parties executed this agreement in 2009,6 however, it was post- dated to July 1, 2005 which date coincided with the date of incorporation of TOS Vienna.
[15].
In support of its claims against TOS, OWL relies in large part upon the testimony of various current or former employees, including Robert Noonan who was the CEO of OWL.7 Mr. Noonan testified8 that he was hired by OWL on March 12, 2012. Prior to his accepting the position, Mr. Noonan said he examined the financials of OWL and concluded that the company was losing money; as CEO, he intended for OWL to migrate from a wholesale type of freight forwarding business model, which serviced shipments routed by other freight forwarders, to a retail business model, which involved handling of commercial accounts, i.e. the transportation needs of large shippers. This plan was implemented upon his arrival at OWL. From Mr. Noonan's perspective, OWL's financial condition was brought about by the management style of his predecessors, Messrs. Alan Baer9 and Dan Gardner, and that he was hired to streamline the company's management and ensure compliance with existing contract terms, such as timely payments as contained in Clause 5 of the Agreement with TOS. He focused on clearing out old receivables and bringing the company back to a higher profit level.
[16].
With respect to the outstanding receivables, OWL has argued that the plain meaning of the Agreement requires a finding in favor of OWL. In particular, OWL has directed the panel to Clause 5 of the Agreement which clearly and unambiguously stated "Settlement of all transactions should be done monthly for all transactions completed during the month" and "[a]ccounts to be maintained with no balances past due sixty (60) days." OWL further argues TOS failed to make a good faith effort to reconcile and settle these outstanding receivables. It is therefore OWL's position that TOS, having made no effort to cure any deficiencies in its accounts within the required 60 day period, is liable for these amounts owed to OWL. As he saw it, his task as CEO of OWL was to clear out old receivables and bring the company back into profitability. TOS argued that there had been a lengthy course of dealing between Peter Czajkowski and the former president of OWL, Alan Baer, to work together and arrive at resolutions on any existing account balances. Both Mr. Czajkowski and Mr. Baer had personal knowledge of the dealings between these two companies and testified that they did not have any significant business disputes as it was their custom and practice to conduct an on-going reconciliation on the numerous shipments, and not to reconcile strictly within the 60 days as set forth in the Agreement. OWL does not disagree that there may have been a course of conduct with respect to the reconciliation of accounts before Mr. Noonan joined the company, but it is OWL's position that such consideration of the parties' prior dealings is prohibited by the parole evidence rule. The record reflects the exchanges between the parties, however, not much progress was made and no specific balances were agreed upon.
[17].
According to Mr. Czajkowski's testimony,10 referring to the final reconciliation, the parties arrived at an "impasse, a stumbling block"11 when he sent an email to OWL advising that he would stop payments until the outstandings of OWL Inc. or OWL Hamburg owed to TOS were confirmed and agreed; the amount due TOS, according to his testimony, was approximately $60,000 net.12 Mr. Czajkowski stated that he did not receive a response to his email, that he did not follow-up and that, as a consequence thereof, the next communication was from Robert Stewart13 on November 11, 2012, in essence, a demand for payment of $106,000 and €39,000. Since TOS did not respond with a payment or any communication, Mr. Noonan issued a notice of immediate termination of the Agreement on November 30, 2012.14
[18].
The emphasis of the termination notice was TOS's failure to strictly adhere to the terms of Clause 5.
[19].
TOS's Austrian counsel15 responded on December 10, 2012 and rejected the validity of OWL's claims and contentions. Counsel stated that he would, as instructed, take action and would commence arbitration proceedings without specifying the venue. However, the letter furthermore states that TOS would assert a claim for $630,000 under Austrian law.16 Neither the letter nor Dr. Schlögl's Declaration challenges the application of New York arbitration, it simply reserved the right to a separate action in the Austrian courts as permitted under the "Österreichischen und Europäisches Zi vilprozessrecht."
[20].
In his letter of December 10, 2012, Dr. Schlögl addressed two further points; i.e., the "Soliciting of Employees" and "Change in Agent's Ownership."
[21].
With respect to OWL's change-in-ownership arguments as a fundamental breach, justifying termination of the Agreement, the panel is not persuaded that the events, arguments and interpretations reached this level. Instead, they raised questions in our minds about the inner working of OWL's, TOS's and Mr. Czajkowski's decisions, and his dealings with Cord Brügge.17 In 1992, Mr. Brügge introduced OWL to Mr. Czajkowski, soliciting an agency contract which was agreed to,18 but not memorialized in a written document. According to Mr. Czajkowski's testimony, much later (in 2009), he was contacted by Messrs. Brügge and Baer to have an agreement executed, at the request of Pacer, and that Mr. Brügge was the one who suggested that the Agreement be back-dated to July 1, 2005.19
[22].
Similarly, the Declaration of Jörg Karpa20 raises questions as to the accuracy of the events as recorded by Mr. Noonan in his testimony.
[23].
OWL also submitted a claim for TOS's breach of the Non Solicitation of Employees.21 It asserts that TOS raided OWL's Hamburg office by hiring its employees, including ITMS (Mr. Karpa) and thus unfairly gaining access to OWL's shipper clients. As evidence of solicitation, OWL relies primarily on the testimony of Mr. Noonan who testified: "A. We felt that TOS actually violated the agreement by hiring our employees. Q. Your employees of which offices? A. In Hamburg."22 OWL further argued that the loss of its employees directly led to a significant drop in income from that office. In support of this last point, OWL produced two OWL employees, Daniel Ludwig and Cynthia Lochard, who both testified as to the income generated by the Hamburg office before the hiring by TOS as compared to the income generated by the Hamburg office immediately after the Hamburg employees left OWL. Mr. Ludwig and Mr. Noonan confirmed that OWL had to immediately hire new employees and incurred additional expenses to run the Hamburg office since its former employees left en masse with little notice to OWL.
[24].
In particular, OWL asserted financial losses of $689,590.00 due to the mass defection of its employees to TOS, as well as $343,887.00, which OWL claims was necessary to maintain the operations of its Hamburg office.
[25].
TOS has argued that OWL has only presented evidence of "hiring" of OWL Hamburg employees, but not that TOS "solicited" OWL employees. On its face, TOS argued that OWL's solicitation must fail. In particular, TOS cited to Mr. Noonan's communications with Claudia Knaack who never stated she was leaving OWL Hamburg due to any solicitation from TOS but rather she was concerned about the significant turnover in OWL US management and the additional work required of her as the head of the Hamburg office.
[26].
TOS acknowledged that OWL presented some evidence concerning an alleged solicitation by Cord Brügge and non-party Oceanwide Logistics Global Network GmbH ("OLGN"), but that both Mr. Brügge and OLGN were not affiliated or under the control of TOS.
[27].
The final contention disputed by the parties was TOS's counterclaim against OWL which was based solely on the argument that OWL improperly terminated the Agreement by not providing TOS at least sixty days prior written notice. TOS argued that OWL's November 11, 2012 letter constituted an immediate termination of the Agreement without any prior written notice to TOS. On this basis, TOS has demanded USD 140,000 which represented roughly TOS's loss of profit for 60 days. This amount of USD 140,000 was obtained using TOS's average monthly profit for the 12 months prior to the November 11, 2012 termination notice.
[28].
OWL responded to TOS's counterclaim by arguing that their November 11, 2012 letter was merely a demand letter to TOS to pay all outstanding receivables and did not attempt to terminate the Agreement with immediate effect, but rather served as final notice to TOS of a material breach to the Agreement. Instead, OWL argues that TOS failed to cure its default by continuing to fail to pay all outstanding receivables and by soliciting OWL Hamburg employees. As such, OWL argued that TOS cannot establish a breach on the part of OWL such that it would support any counterclaim under the Agreement. Beyond the legal argument, OWL further argued that TOS did not provide sufficient substantiation in support of TOS's damages of USD 140,000.00.
[29].
Much has been stated and argued about the conduct of business between OWL and TOS. Also, the parties do not disagree that they had a "long and fruitful cooperation." Likewise, there is no real disagreement on the market developments of their business or the revenues generated. No one can argue with Mr. Noonan's comments made about Pacer's Earnings Call Transcripts for the year 2012.23

Having said that, the financial performance in the first quarter and the international logistics, that is our international freight forwarding and Pacer Distribution Services businesses, was disappointing with operating income behind our internal plans by about $1.5 million as John mentioned. The logistics revenue decline of $18 million or 23%, which was also down a similar amount from our internal plans was mostly due to international freight forwarding business, with the largest decline from U.S. exports due to the soft global economic conditions, competitive pricing pressure, and turnover in key management positions. [First Quarter Report]

Bob Noonan - EVP, International Logistics: Thanks Mike. The Logistics segment had another difficult quarter with revenue down $21 million at [sic] 25%. Segment lost $2.5 million in operating income in the quarter, the loss coming as a result of lower volumes and revenue levels. The revenue decline came in at our international freight forwarding business with the largest decline coming once against from U.S. exports due to competitive pricing pressure and turnover in key positions. [Second Quarter Report]

Bob Noonan - EVP, International Logistics: Thank you, Mike. The Logistics segment had another difficult quarter. Revenue of $58 million was down $16 million or 21 % year-over-year. This was also down $4 million from last quarter and from our expectations for the third quarter. The year-over-year revenue decline came from the international freight forwarding business. As a result of the revenue declines, this segment lost $2.3 million in operating income, which was slightly better than last quarter's results.

As Dan mentioned, the shortfall of revenues and margins compared to our expectations was mainly because of a significant organizational change in our European operations, where we took the opportunity to change our leadership and replace them with experienced people whose motivations are aligned with.... [Third Quarter Report]

Bob Noonan - EVP, International Logistics: Thank you, Paul and good morning everyone. As Dan mentioned, Logistics segment made its targeted [sic] of sequential improvement of $500,000 after taking into consideration the unexpected cost outlined by Dan. Our overall revenue was down by $11 million or 16% from the same quarter last year. It was down by less than $1 million from the third quarter. This small sequential decline signals a significant reduction in churn and demonstrates the minimum comp retention in building new business through our new.... [Fourth Quarter Report]

[30].
The reports reflect losses in productivity for which stockholders expect answers.
[31].
With respect to the prior conduct of accounting, there is no question OWL regularly presented written statements of account to TOS and that TOS did not respond within 60 days as required by the Agreement. It was explained as being in aid of TOS as the start-up company, and since moneys were due TOS as well as due to OWL, an off-set accounting was convenient and in the interests of both sides.
[32].
After considering all arguments and evidence, the panel unanimously reaches the following decisions:
[33].
Clause 5; Settlement. It is our decision that OWL was within its contractual rights to cancel the Agreement under this particular clause. We have duly considered the arguments concerning prior conduct and the various legal and arbitral decisions references as well as the reliance on New York law; i.e., the parole evidence rule.
[34].
In 1992, Mr. Brügge introduced OWL to Mr. Czajkowski.24 It is uncontested that initially the parties operated without a written agreement.25 When Pacer acquired OWL in 2009, Mr. Czajkowski was contacted by Messrs. Baer and Brügge with a request for a written agreement for their business relationship. The new regime insisted on greater formality and adherence to protocol. Therefore, in 2009, the Agreement was prepared and executed. At Mr. Brügge's request, the document was back-dated, to which Mr. Czajkowski agreed.26
[35].
The foregoing re-emphasizes the prior informality in the OWL/TOS relationship, which, in our view, cannot overcome the clear and unambiguous terms of Clause 5 in the subsequently negotiated Agreement. At the time when the document was requested and ratified in 2009, TOS was certainly aware of the Pacer take-over of OWL and different expectations from what their prior experiences had been. Mr. Brügge's request to post-date the document has not been sufficiently explained. No testimony or documents have been presented which would indicate any relevance to the point that it reflected the date of TOS's incorporation. In our view, the back-dating of the contract does not have anything to do with the OWL/Pacer and TOS relationship. As parent of OWL, Pacer is entitled to a contract which properly reflects the terms agreed to in 2009 and not some undocumented terms which existed in the perception of Mr. Brügge and Mr. Czajkowski, both of whom are now OWL's opponents, for all practical purposes.
[36].
The existence of Clause 1427 further supports OWL's argument:

[t]his Agreement may not be amended... except by a written agreement duly executed by each of the Parties. The failure of any Party at any time to enforce any of the provisions of this Agreement will in no way constitute or be construed as a waiver.

[37].
According to the Claim Statement,28 OWL seeks an award of $150,849.54 for itself and €98,419.23 for OWL GmbH. The arbitrators have considered the various components of the claims, including the underlying accounts as well as the testimony of Ms. Lochard.
[38].
Each side has argued that its claims are fully supported and that the other side failed its burden to establish entitlement to its claims. Despite the multitude of invoices, spreadsheets, graphs and arguments, the panel was not persuaded by their probative value. It is apparent, based upon submissions from both sides,29 that against OWL's claim of $150,849.54, TOS admits owing $85,019.14. In the absence of more persuasive evidence, the panel limits any recovery by OWL to $85,019.14.
[39].
With respect to OWL's claim of €98,419.23, which has been described as an amount due OWL Hamburg under Attachment A (Compensation Basis) to the Agreement,30 the parties, not unexpectedly, take drastic opposing views. OWL claims entitlement under the Agreement based upon the fact that it had issued invoices which remained unpaid, but TOS points out that there is no corroborating evidence or testimony through which OWL can or did prove this entitlement. According to the evidence offered by Mr. Czajkowski, the parties changed the profit sharing arrangement in 2009 from a per-container basis to a lump sum compensation. The Agreement was never officially amended although the contract provided in Attachment A that for "USA destinations lump sum profit share to be negotiated once/twice a year, depending on the market development" and that "the profit share for OWL Hamburg is included in the lump sum payments."31 Mr. Noonan conceded this existing term.32 Certainly there was this option, but what is missing is the credible proof. Supposedly, the agreement was reached between Mr. Czajkowski and Mr. Brügge (on OWL's behalf), but neither person's statement or testimony supports OWL's contention; on the other hand, the correspondence between Mr. Czajkowski and OWL's Hamburg accounting people in 201233 supports TOS's position. In the panel's opinion, OWL has not proven any wrong-doing by TOS and, therefore, the panel denies OWL's entitlement for this claim.
[40].
Clause 12; Non Solicitation of Employees. This dispute covers the bulk of OWL's claim for damages as well as for TOS's counterclaims. As stated before, this claim is primarily based upon Mr. Noonan's testimony of "violating the Agreement" and "stealing employees."34
[41].
TOS presented Mr. Czajkowski's testimony and submitted a number of declarations and/or affidavits of ex OWL employees.35 The statement by Claudia Knaack, former General Manager of the Hamburg office,36 offers a reasonable explanation for a change in employment, particularly when read in context with some of Mr. Noonan's testimony. She stated; i.a.:

Due to organizational changes in OWL Hamburg as well as at OWL's Headquarter in New York, which started in 2011, I was concerned about the future development of OWL Hamburg and felt extremely uncomfortable with my engagement in this group.

Most of my colleagues at OWL Hamburg felt alike and various internal discussions were held among us, also thinking about alternative engagements in other companies.

When we discussed this with colleagues of TOS who since long shared the same office rooms with us in Hamburg, we have heard that TOS group planned to start business in Hamburg with a new company, being established soon; this replacing TransOcean Shipping Transportagentur GmbH, which was sold in 2011 before.

Me and my colleagues then talked to other TOS friends and discussed a potential engagement with this prospective company, which later was established as OLE Oceanwide Logistics Europe GmbH ("OLE").

Solely based on my personal future prospects, it then was my sole decision, to quit my employment with OWL Hamburg and to start working for OLE.

Others of my colleagues also left OWL Hamburg but started employment with other companies in Hamburg.

[42].
Mr. Noonan spoke about the management situation:

As I said, we made an investment of a global vice-president of sales who was responsible for sales across the organization. We added a number of people throughout the organization that understood how to sell supply chain, understood how to sell logistics, how to bundle services. That was all an investment that we made.37

[43].
On cross-examination, Mr. Noonan testified concerning a conversation he had with Ms. Knaack prior to her leaving OWL.

Q. Did you ever speak to her about the reason she was departing the company?

A. Yes.

Q. What did she tell you?

A. She wasn't really willing to provide a lot of information, other than it was very difficult for the times that they had gone through since 2011.

Q. Did you understand what she meant by this?

A. Yes.

Q. What did you understand?

A. That basically she was put into a position that she really didn't want.

Q. Meaning -

A. A position meaning a title. She was put in as a general manager, and she did not want to be a general manager.

Q. Did she say why that was?

A. She didn't want the responsibility.

Q. Did you understand that was one of the reasons why she left the company?

A. Well, I gave her the opportunity to change that.

Q. But you knew that she was interested in leaving?

A. She never said she was interested in leaving.

Q. You understood she was unhappy?

A. Yes.38

[44].
When questioned about the management of the Hamburg office, Mr. Noonan testified that after Mr. Brügge was dismissed,39 John Oliver was hired as a "contracted employee,"40 followed by Jurgen Mocke and then there was a void.41 In other words, the testimony establishes that OWL Hamburg, within a span of a year or so, had at least three different general managers.42
[45].
Based upon the existing record, this panel cannot find that OWL has carried its burden to support the allegation of raiding or solicitation by TOS. As such, the monetary claims for loss of profits and mitigation costs are denied.
[46].
In summary, the panel unanimously finds that TOS breached the 60-day provision in Clause 5 and that OWL's termination of the Agreement, pursuant to Clause 10, was valid. Our award of $85,019.14 to OWL also takes into consideration that this amount had been conceded by TOS.
[47].
With respect to the €98,000, the charges remain in contention as the record before us did not provide sufficient and persuasive evidence. Therefore, the panel denies OWL's claim.
[48].
The record before us does not provide sufficient and persuasive evidence which would support an award for the €98,000 claim lodged for the OWL Hamburg office. Therefore, the panel denies OWL's claim.
[49].
OWL's claims under Clause 12 dealing with the loss of profits and mitigation have been rejected in full.
[50].
The damages claimed by TOS have been presented as a loss of profits claim, which was based upon OWL's alleged wrongful termination of the Agreement. TOS demanded $140,000, which roughly represented TOS's loss of profit for 60 days. This amount of $140,000 was obtained using TOS's average monthly profit for the 12 months prior to the November 11, 2012 termination notice. Since the panel held that there was no wrongful termination. TOS's claim fails. Also, we deny the account balance due TOS for the same reasons as applied for the OWL decision; i.e., lacking specificity and proof.

G. Interest

[51].
Interest, where due, is calculated at the average annual prime rate currently stated by the Federal Reserve Bank.43 Simple interest is calculated from the due dates to the date of this award.

H. Costs and Fees

[52].
Both parties have claimed attorneys' fees and costs as reflected in Section C of this award.44 Subsequently, on September 21, 2015, the panel requested counsel to breakdown the amounts claimed into specific periods; i.e., (1) those incurrent prior to this panel being appointed and leading up to our appointment; (2) those incurred from the time of our appointment until issuance of the Final Partial Award on January 22, 2014; and (3) those incurred from the time of the Final Partial Award until the present. Supplementary declarations were supplied by counsel on October 2, 2015.
[53].
It is the panel's decision that, based upon the merits of this case, for periods (1) and (3), the parties bear their own costs and fees and equally share the arbitrators' fees. For period (2), from July 1, 2013 to January 22, 2014, the panel awards recovery of legal fees/costs to OWL in the amount of $79,091 and reimbursement of the arbitrators' fees of $14,650.45 OWL is also entitled to interest on these two amounts at the rate of 3.25% p.a. commencing on July 2, 2014 to the date of this award.
[54].
As part of its PFA award issued on January 22, 2014, the panel charged a total fee of $29,300, which, subject to later review and possible reassessment in the Final Award, was to be paid in equal shares by the parties, in the first instance. OWL paid $14,650 on March 1, 2014; since TOS failed to make payments, on July 2, 2014, OWL advanced funds of $14,650 on TOS's behalf. On July 3, 2014, TOS's counsel transferred $14,650 to OWL. Thus, at that time, the parties had complied with the instructions of Appendix A to the PFA.
[55].
On May 12, 2014, the panel requested the parties establish an escrow account with the SMA to secure the arbitrators' fees and expenses for the balance of time to complete this arbitration. OWL made the requested arrangement; TOS declined and instead asked that the panel state their expected fees for the period from January 23, 2014 to October 15, 2014. The panel complied with this request. The parties made the necessary arrangements, sharing the payment on a 50-50 basis. TOS's payment was received on December 22, 2014 and OWL's payment was received on January 7, 2015 from the SMA escrow account.
[56].
The outstanding balance of the panel's fee from October 15, 2014 to the date of this Final Award is stated in Appendix A, which forms an integral part of this award. Payment is to be made in accordance with the instructions contained in the appendix. The panel's fees are a joint and several obligation of both parties.

I. Award

[57].
TOS is ordered to pay OWL the sum of $192,304.39, which we arrive at as follows:

• Total amount owed OWL $ 85,019.14

• Interest thereon 8,932.96

• Reimbursement of legal costs and arbitrator fees 79,091.00
relating to the ruling in the Partial Final Award 14,650.00

• Interest thereon 4,611.29

Total due OWL $192,304.39

[58].
If payment of the above has not been made within 30 days from the award date, interest at 3.5% p.a.46 shall resume to accrue on the outstanding principal and run until the award has been paid or made a rule of the court, whichever first occurs.
[59].
According to Clause 16, any court, tribunal or other forum as may properly assert jurisdiction may enforce the decision of the arbitrators.
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