In re Pahlberg Petition
| Decision Date | 07 December 1942 |
| Docket Number | No. 96.,96. |
| Citation | 131 F.2d 968 |
| Parties | In re PAHLBERG PETITION. |
| Court | U.S. Court of Appeals — Second Circuit |
Before SWAN, AUGUSTUS N. HAND and CHASE, Circuit Judges.
Haight, Griffin, Deming & Gardner, Herbert M. Statt and James McKown, Jr., all of New York City, for respondent-appellant Bulk Carriers Corporation.
Kirlin, Campbell, Hickox, Keating & McGrann and Charles R. Hickox, all of New York City, for petitioner-appellee Rud Pahlberg.
This is an appeal from an order granting the petition of Rud Pahlberg to compel the respondent, Bulk Carriers Corporation, to proceed with arbitration pursuant to Section 4 of the United States Arbitration Act, U.S.C.A. Title 9, § 4.
The owners of the Estonian Steamship "Hildur" agreed to let the steamship, and Bulk Carriers Corporation, to hire her for a period of three consecutive months at the rate of $2.50 per ton on the vessel's total deadweight carrying capacity, represented to be about 3,000 tons. Under the terms of the charter party she was to be placed at the disposal of the charterer not before January 5, 1940, and not later than May 15, 1940, but was never delivered to the charterer.
The charter party contained an arbitration clause which read as follows:
The charterer filed a libel against the owners of the vessel to recover $25,000 damages for failure of the latter to perform its contract by delivering the "Hildur" to the libellant for the carriage of merchandise within the range of limits set forth in the contract. After vainly demanding an arbitration, the owners of the "Hildur" moved in the District Court on October 24, 1941, for an order staying the pending action until arbitration could be had pursuant to Section 3 of the Arbitration Act, 9 U.S.C.A. § 3. This motion was denied upon the authority of The Wilja, 2 Cir., 113 F.2d 646, and the denial was affirmed on reargument. Thereafter, and on or about January 29, 1942, Rud Pahlberg, the petitioner-appellee, and one of the alleged owners of the "Hildur," filed an independent petition to compel arbitration pursuant to Section 4 of the United States Arbitration Act and his petition was granted.
The denial of the motion for a stay under Section 3 of the Arbitration Act resulted in an order which, because it was interlocutory, was not res judicata in respect to the later order directing the charterer to proceed to arbitration pursuant to Section 4. Joseph T. Ryerson & Son v. Bullard Machine Tool Co., 2 Cir., 79 F.2d 192.
Aside from the fact that the order denying a stay was interlocutory, it is entirely clear from the decision of the Supreme Court in Shanferoke Coal & Supply Corp. v. Westchester Service Corp., 293 U.S. 449, 452, 55 S.Ct. 313, 79 L.Ed. 583, that the power given by Section 3 of the Arbitration Act to grant a stay until arbitration is not confined to cases in which arbitration may be compelled under Section 4 of the Act. Therefore, application for a stay under Section 3 did not exclude the right to proceed under Section 4 of the Act to enforce arbitration. See, also, In re Utility Oil Corporation, 2 Cir., 69 F.2d 524.
The statement in The Wilja, 2 Cir., 113 F.2d 646, that the arbitration clause there being considered could not be invoked because the charter had been repudiated was not the ground on which that decision properly rested, but the proper ground, as was noted in Kulukundis Shipping Company v. Amtorg Trading Corp., 2 Cir., 126 F.2d 978, was the actual impossibility of arbitration. In view of the discussion in Kulukundis Shipping Company v. Amtorg Trading Corp., and the recent decision of the House of Lords in Heyman v. Darwins (1942), A.C. 356, we think that the dictum in The Wilja, supra, was not controlling upon the court below and that under the language of the arbitration clause in the charter party before us the repudiation of the charter by the owners, by failure to deliver the ship, was to be fairly regarded as a dispute arising between the parties referable to arbitration within Section 17 of the charter party. The somewhat confused interpretation of the British Arbitration Act in various decisions of the British Courts has been recently clarified by the House of Lords in Heyman v. Darwins, supra, which reached a...
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...Amtorg Trading Corp., 2 Cir., 1942, 126 F.2d 978; Almacenes Fernandez, S.A. v. Golodetz, infra, 2 Cir., 148 F.2d 625; In re Pahlberg Petition, 2 Cir., 1942, 131 F.2d 968. Finally, any doubts as to the construction of the Act ought to be resolved in line with its liberal policy of promoting ......
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