Schilling v. Canadian Foreign Steamship Company
| Decision Date | 11 January 1961 |
| Citation | 190 F. Supp. 462 |
| Parties | Edward SCHILLING, Trustee in Reorganization of North Atlantic and Gulf Steamship Company, Incorporated, Libelant, v. CANADIAN FOREIGN STEAMSHIP COMPANY, Ltd., Isbrandtsen Company, Inc., and Carras (USA) Ltd., as agents for the owners of THE SS DIRPHYS, Respondents. |
| Court | U.S. District Court — Southern District of New York |
Bergerman & Hourwich, New York City, for libelant.
Zock, Petrie, Sheneman & Reid, New York City, for respondent Isbrandtsen Co., Inc.
Respondent Isbrandtsen Company, Inc., moves pursuant to section 3 of the United States Arbitration Act, 9 U.S.C. § 3, to stay all proceedings herein until arbitration is had.
The question presented is whether a trustee in reorganization who seeks to recover on a contract made with his debtor prior to the beginning of the reorganization proceeding may be compelled to proceed to arbitration in accordance with a provision in the contract. The arbitration clause is included in an agreement subchartering a vessel. The debtor, as time charterer owner of the vessel, subchartered it to respondent Canadian Foreign Steamship Company, Ltd. (hereinafter referred to as "Canadian Foreign"). Thereafter, Isbrandtsen Company, Inc. (which will be referred to as "Isbrandtsen") agreed to stand responsible for any proven default under the subcharter of Canadian Foreign. Disputes arose involving the terms and application of the subcharter and, pursuant to the arbitration clause, the debtor demanded arbitration and appointed one arbitrator, Canadian Foreign appointed a second arbitrator and the two arbitrators so chosen appointed a third arbitrator. There then intervened an order of the court approving an involuntary petition for the reorganization of the debtor. The trustee refused to proceed with the arbitration and secured the authorization of the reorganization court to institute the present action.
Although Canadian Foreign has not appeared in this action, Isbrandtsen has standing to raise as a defense the alleged irrevocability and enforceability of the arbitration agreement. See Modern Brokerage Corp. v. Massachusetts Bonding & Insurance Co., D.C.S.D.N.Y., 54 F.Supp. 939.
The right of a party to a contract to resort to arbitration provided for in that contract is as much a contract right as is the right to payment. It is such an important right that even the question whether the contract containing the arbitration clause was obtained by fraud must be decided by the arbitrators. Robert Lawrence Company v. Devonshire Fabrics, Inc., 2 Cir., 271 F.2d 402, certiorari granted 362 U.S. 909, 80 S.Ct. 682, 4 L.Ed.2d 618. The trustee by forcing Canadian Foreign to trial in this court would be depriving Canadian Foreign of the right to arbitration for which it had bargained. That would be all very well if Canadian Foreign were asserting a claim against the bankrupt estate. The very purpose of bankruptcy...
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Truck Drivers Local Union No. 807, Intern. Broth. of Teamsters v. Bohack Corp.
...and its survival in the setting of bankruptcy proceedings has been recognized in this circuit. In Schilling v. Canadian Foreign Steamship Co., Ltd., 190 F.Supp. 462 (S.D.N.Y.1961), a debtor of the trustee sought to invoke the arbitration clause of their contract when the trustee sued on the......
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Fallick v. Kehr
...may be filed in court and shall have like force and effect as the verdict of a jury. (Emphasis added.) 9 Schilling v. Canadian Foreign S.S. Co., 190 F.Supp. 462 (S.D.N.Y.1961); In re Grain Prods. Corp., 20 F.Supp. 134 (S.D. 10 See also Moseley v. Electronic & Missile Facilities, Inc., 374 U......
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Bohack Corp. v. TRUCK DRIVERS LOCAL U. NO. 807, ETC.
...arrangements exist. It does not supersede explicit contractual provisions. 301 F.2d at 381, citing Schilling v. Canadian Foreign S.S. Co., 190 F.Supp. 462 (S.D.N.Y. 1961).5 Here, the collective bargaining agreement contains detailed procedures for the arbitration of grievances arising under......
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In re Guy C. Long, Inc.
...of a contract, it must embrace its terms cum onere — including its arbitration provision. In re Morgan; Schilling v. Canadian Foreign Steamship Co., 190 F.Supp. 462, 463 (S.D.N.Y.1961). This is not to suggest that whenever a trustee (or debtor in possession) commences a proceeding based upo......