Astra Footwear Indus. v. Harwyn Int'l, Inc. - 442 F. Supp. 907 (S.D.N.Y. 1978)

Rule:

9 U.S.C.S. § 5 was drafted to provide a solution to the problem caused when the arbitrator selected by the parties cannot or will not perform.

Facts:

Petitioner Yugoslavian manufacturer and respondent footwear distributor entered into an agreement for the sale and purchase of footwear. The manufacturer alleged the distributor failed to pay for the footwear shipped and filed an action against the distributor. The manufacturer sought to compel arbitration before the International Chamber of Commerce. It was the manufacturer's position that in designating the "Chamber of Commerce in New York" in their agreement, the parties were referring to the International Chamber of Commerce. In reply, the distributor maintained that the agreement referred to the New York Chamber of Commerce (NYCC) to arbitrate disputes arising thereunder. The NYCC ceased to arbitrate disputes; hence, the distributor argued that the agreement to arbitrate had been vitiated. It argued that the question of whether the agreement was to arbitrate in general or was to arbitrate before a particular organization was an issue mandating a jury trial under 9 U.S.C.S. § 4.

Issue:

Was the issue of whether to arbitrate in general or to arbitrate before a particular organization an issue mandating a jury trial under 9 U.S.C.S. § 4? 

Answer:

No.

Conclusion:

The court rejected the distributor’s argument, and noted that there was a dominant intent to arbitrate and not merely to arbitrate before particular arbitrators. The court found that 9 U.S.C. § 5 was drafted to provide a solution to the problem caused when the arbitrator selected by the parties cannot or will not perform. In view of the federal policy to construe liberally arbitration clauses and to resolve doubts in favor of arbitration, the court concluded that it cannot ignore the plain language of 9 U.S.C. § 5, nor do the equities of the case warranted doing so. The court, thus, agreed to appoint an arbitrator pursuant to 9 U.S.C. § 5.