                                                              [DO NOT PUBLISH]


              IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT                      FILED
                          ________________________           U.S. COURT OF APPEALS
                                                               ELEVENTH CIRCUIT
                                                                    Aug. 22, 2008
                                No. 08-10332                    THOMAS K. KAHN
                            Non-Argument Calendar                   CLERK
                          ________________________

                      D. C. Docket No. 07-23039-CV-PCH

GEDIMEX, S.A.,


                                                                  Plaintiff-Appellee,

                                      versus

NIDERA, INC.,

                                                              Defendant-Appellant.


                          ________________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                        _________________________

                                (August 22, 2008)

Before TJOFLAT, BLACK and CARNES, Circuit Judges.

PER CURIAM:

     This is Nidera, Inc.’s appeal from the district court’s order denying its
motion to dismiss or stay proceedings to allow for arbitration of Gedimex, S.A.’s

breach of contract suit against Nidera.

       Between 2002 and 2007 Gedimex bought approximately fifty large

shipments of bulk rice from Nidera. Each shipment was governed by an identical

written standard form contract. Those contracts each contained a clause mandating

the arbitration of disputes stemming from those contracts before the Grain and

Feed Trade Association in London. The arbitration clause in the series of form

contracts between Gedimex and Nidera provides that:

       Any and all disputes arising out of or under this contract or any claim
       regarding the interpretation or execution of this contract shall be
       determined in accordance with the GAFTA Arbitration Rules, No.
       125, in the edition current at the date of this contract, such Rules are
       incorporated into and form part of this Contract and both parties
       hereto shall be deemed to be fully cognizant of and to have expressly
       agreed to the application of such Rules.1

       According to the allegations in Gedimex’s complaint, four months after the

first rice purchase Nidera and Gedimex entered into a separate oral contract in

which Nidera agreed to supply Gedimex with empty bags at cost to facilitate

shipment of the rice. That oral contract did not include an agreement to arbitrate


       1
          Nidera also points to language in Article 2:2 of GAFTA Rules 125, which sets forth
time limitations on when claims may be arbitrated. Article 2:2 is prefaced with the phrase: “In
respect of all other disputes relating to the sale of goods.” Nidera contends that this “relating to”
language demonstrates the parties’ intention to arbitrate any dispute related to the sale of goods,
here rice. We disagree. The phrase “relating to” is not contained in the arbitration clause and its
inclusion in Article 2:2 of GAFTA Rules 125 does not expand the scope of that clause.

                                                  2
disputes arising out of it.

       On November 1, 2007 Gedimex sued Nidera in a Florida state court,

alleging that Nidera breached the oral contract to supply empty bags at cost and

was unjustly enriched by overcharging Gedimex for the bags. Nidera removed the

case to federal court and moved to dismiss or stay the case on the ground that the

subject matter of the dispute was covered by the arbitration clause in the rice

purchase contracts.

       The district court heard oral argument on Nidera’s motion and denied that

motion in a written order. The court concluded that the bulk rice contracts were

separate and independent from the empty bag contract and, accordingly, the

arbitration clause found in the rice contracts did not apply to a dispute arising out

of the empty bag contract.

       We review de novo the district court’s order denying Nidera’s motion to

dismiss or stay Gedimex’s action to allow the parties to arbitrate. See generally

Bess v. Check Express, 294 F.3d 1298, 1302 (11th Cir. 2002). While we recognize

the strong federal policy in favor of arbitration, see generally Seaboard Coast Line

R.R. Co. v. Trailer Train Co., 690 F.2d 1343, 1348 (11th Cir. 1982), we will not

compel parties to arbitrate a dispute where the parties have not agreed to do so,

Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004).



                                           3
      We give the phrase “arising out of” in an arbitration clause a broad reading,

but as we explained in Telecom Italia, SpA v. Wholesale Telecom Corp., 248 F.3d

1109 (11th Cir. 2001):

      Disputes that are not related—with at least some directness—to
      performance of duties specified by the contract do not count as
      disputes “arising out of” the contract, and are not covered by the
      standard arbitration clause. . . . However, where the dispute occurs as
      a fairly direct result of the performance of contractual duties . . . , then
      the dispute can fairly be said to arise out of or relate to the contract in
      question, and arbitration is required.

Id. at 1116.

      We agree with the district court’s conclusion that the arbitration clauses in

the standard form rice contracts do not encompass Gedimex’s claims relating to the

separate oral agreement to supply empty bags at cost. Each of those arbitration

clauses was explicit that it covered only disputes arising out of that particular

contract. The dispute Nidera seeks to arbitrate is not “a fairly direct result of the

performance” of any of the duties set forth in the rice purchase contracts. See id.

Our conclusion is supported by our recent decision in International Underwriters

AG v. Triple I: Int’l Invs., Inc., ___ F.3d ___, No. 07-10284, 2008 WL 2717182

(11th Cir. July 14, 2008), which held that the arbitration clause of an escrow

agreement between the parties did not apply to a claim arising out of their separate

but related written bond commitment because the defendant “could have breached



                                            4
its bond commitment and defrauded [the plaintiff] even if there had been no

escrow agreement at all.” Id. at *15–14. Similarly, although the contracts in this

case are clearly related, Nidera and Gedimex could have entered into the empty

bag contract and the breach Gedimex alleges could have occurred even if there

were no rice purchase contracts.2 The arbitration clauses in the rice purchases

contracts therefore do not encompass the dispute Nidera seeks to arbitrate.

       If the parties had intended to arbitrate the empty bag dispute, they could

have agreed to do so. Or, the parties could have modified the rice purchase form

contracts to require arbitration of any disputes arising between the parties. But

they did not. We will not compel arbitration of a dispute arising out of one

contract on the basis of an arbitration clause in a separate and distinct contract

where the arbitration clause is limited to disputes arising out of the first contract.

       AFFIRMED.




       2
          Nidera argues that without the rice purchase agreements, there would have been no
consideration for its promise to supply Gedimex with empty bags at cost. We disagree.
Agreeing to sell someone goods at cost may not be commercially wise, but a contract to do so
would be supported by consideration. One party promises to pay for the goods, the other party
promises to tender them. Those promises are not insubstantial or illusory, and therefore
constitute sufficient consideration. See generally Johnson Enters. of Jacksonville, Inc. v. FPL
Group, Inc., 162 F.3d 1290, 1311 (11th Cir. 1998).

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