S.M.A. Award No. 1394

Time Charter-Party - Hire payable in German Marks at exchange rate fixed to U.S. Dollar - Whether payment in Deutsche-marks at fixed rate violated Gold Clause legislation

A recent arbitration decision in New York dealt with an interpretation of a hire payment clause providing for “rates payable in German Marks” and Charterer’s allegation that its obligation to pay hire at an agreed dollar rate by payment of an amount of German Deutsche Marks (DM) calculated at a fixed rate of 3.225 DM per dollar was invalid under 31 U.S.C.S. 463 (1964) (The Gold Clause).