Cocotos Steamship of Panama, SA v. Hugo Neu Corp.

• Decision Date: 26 May 1959
• Parties: In the Matter of the Arbitration of a dispute between COCOTOS STEAMSHIP OF PANAMA, S.A., and HUGO NEU CORPORATION.
• Court: U.S. District Court — Southern District of New York

178 F. Supp. 491

In the Matter of the Arbitration of a dispute between COCOTOS STEAMSHIP OF PANAMA, S.A., and HUGO NEU CORPORATION.

United States District Court S. D. New York.

May 26, 1959.

Francis J. Haley, New York City, for Cocotos Steamship of Panama, S.A.

Burlingham, Hupper & Kennedy, New York City, for Hugo Neu Corp.

CASHIN, District Judge.

This is a motion pursuant to Section 9 of the Federal Arbitration Act (9 U.S.C. § 9) for an order confirming an arbitration award.

The moving party, Hugo Neu Corporation, was the charterer of a vessel owned by Cocotos Steamship of Panama, S.A. The arbitration agreement in the charter party provided for arbitration "in the City of New York pursuant to laws relating to arbitration there in force". After the dispute arose, the Cocotos Steamship of Panama, S.A., the owner, petitioned this Court, pursuant to Section 4 of the Federal Arbitration Act (9 U.S. C. § 4) for an order compelling arbitration. Prior to the return date of the petition, the charterer had appointed its arbitrator so that the petition became moot. On the return date of the petition, however, the owner made an application to the court for an order directing payment by the charterer of costs, disbursements and expenses. This application was denied.

The parties proceeded to arbitration and, on January 26, 1959, the arbitrators handed down an award. On April 24, 1959 the owner served charterer's proctors with a motion returnable in Special Term, Part I of the Supreme Court, New York County, for an order, under Section 1462, subd. 4 of the Civil Practice Act of New York, vacating and setting aside the award on the ground of alleged impropriety of the arbitrators. On April 28, 1959, the charterer made the present motion, returnable April 30, 1959, by order to show cause and obtained, ex parte, an order restraining the owner from pressing the Supreme Court motion, pending the determination of the motion to confirm.

The petitioner argues that this court should continue to restrain the State Court action on two grounds: first, because the petition by the owner to compel arbitration gave this court primary jurisdiction over the entire matter; and, second, that since the subject matter of the arbitration is a maritime matter this court has priority over the application to confirm. I find that neither of petitioner's arguments is persuasive.

There is no doubt that a State Court has jurisdiction over arbitration agreements in maritime contracts under the "saving to suitors" clause of the Judicial Code. (28 U.S.C. § 1333(1)), Red Cross Line v. Atlantic Fruit Co., 1924, 264 U.S. 109, 44 S.Ct. 274, 68 L.Ed. 582. There would appear to be no reason whatsoever therefor for there to be any "priority" in this court merely because the action is a maritime one. Thus, if the restraining order presently in effect is to be continued, it would have to be because the filing by the owner of the petition to compel arbitration gave this court such an interest in the entire arbitration proceedings as to warrant the retention in the court of jurisdiction over any subsequent application concerning the arbitration, in accordance with the exception to the prohibition against enjoining state court proceedings contained in 28 U.S.C. § 2283. Of course, the petition to compel arbitration is "the initial step in a litigation which seeks as its goal a judgment affirming the award". Davenport v. Procter & Gamble Mfg. Co., 2 Cir., 1957, 241 F.2d 511, 514, 63 A.L.R. 2d 1350; and see Marchant v. Mead Morrison Mfg. Co., 2 Cir., 1928, 29 F.2d 40, certiorari denied 278 U.S. 655, 49 S.Ct. 179, 73 L.Ed. 565. However, I do not feel that the filing of a petition, which was never judicially acted upon, gave this court any such interest in the litigation superior to the...