Zim Israel Nav. Co. v. Sealanes Intern., Inc.

• Decision Date: 18 December 1962
• Citation: 17 A.D.2d 393,235 N.Y.S.2d 296
• Parties: In the Matter of the Arbitration of Controversies between ZIM ISRAEL NAVIGATION COMPANY, Ltd., Petitioner-Appellant, and SEALANES INTERNATIONAL, INC., Respondent.
• Court: New York Supreme Court — Appellate Division

Page 296

235 N.Y.S.2d 296

17 A.D.2d 393

In the Matter of the Arbitration of Controversies between

ZIM ISRAEL NAVIGATION COMPANY, Ltd., Petitioner-Appellant,

and

SEALANES INTERNATIONAL, INC., Respondent.

Supreme Court, Appellate Division, First Department.

Dec. 18, 1962.

Leo Guzik, New York City, of counsel (Stanley D. Halperin, New York City, with him on the brief, Guzik & Boukstein, New York City, attys.), for appellant.

Robert Mishkin, New York City, of counsel (John J. Reilly, New York City, with him on the brief, Meiselman, Mishkin & Reilly, New York City, attys.), for respondent.

Before BOTEIN, P. J., and BREITEL, RABIN, VALENTE and STEVENS, JJ.

STEVENS, Justice.

These are appeals from (1) an order entered June 21, 1962, denying petitioner's motion to compel arbitration, and (2) an order entered July 16, 1962, which set aside and vacated service of the petition and order to show cause (to compel respondent to arbitrate) based thereon, and denied petitioner's cross-motion to consolidate respondent's motion to vacate with the application of petitioner for an order directing respondent to proceed to arbitration, as resettled by order entered September 13, 1962.

The petitioner-appellant, Zim Israel Navigation Company, Ltd. (herein Zim), a corporation of Israel, and respondent, Sealanes International, Inc. (herein Sealanes), an Illinois corporation, entered into an agreement for one year, effective February 1, 1960, whereby Zim appointed Sealanes as its agent for the Great Lakes General Agency. The agreement was executed in New York. Sealanes does not have an office and is not registered to do business in New York. Its principal office is in Illinois, and the area embraced within its operations under the agreement is 'Great Lakes Service between U. S. Great Lakes Ports and Mediterranean Ports', with authority to appoint sub-agents in all 'U. S. A. Lake Ports as well as solicitation agent in New York City.'

The agreement contained a provision for arbitration in the following language:

'12. Disputes, if any, are to be settled by arbitration, the Owners and the Agent each nominating one arbitrator. In case both arbitrators cannot come to an agreement, same to appoint a third arbitrator to act as umpire, whose decision shall be final and binding on both parties. If the two arbitrators cannot decide upon the nomination of the third arbitrator, either of them is entitled to apply to the New York Shipping Association for a nomination of the umpire.'

Disputes arose between the parties and Zim sought an order pursuant to Section 1450, Civil Practice Act, for service by registered mail upon Sealanes and a direction that the parties proceed to arbitration. Service of the show cause order was made by registered mail and Sealanes appeared specially on the return date and objected to the jurisdiction of the court. Sealanes also moved to vacate the petition and order to show cause by motion returnable June 13, 1962.

The court vacated and set aside service on the ground there was nothing to show the parties agreed to arbitrate in New York, and denied the motion to compel arbitration. Zim appeals, contending, as it did below, the parties intended disputes to be arbitrated in New York. Sealanes disputes this contention.

It is correct that the agreement does not provide in direct language that arbitration shall be held in New York. However, reference to the document is enlightening on the question of the intention of the parties. The agreement was executed in New York; it is provided, inter alia, that Sealanes has authority to appoint sub-agents in all U. S. A. Lake Ports, as well as a solicitation agent in New York City; it may obtain funds required by agents for prompt payment of Zim's accounts of all expenses connected with operations of owner's vessels either by retaining funds collected, or alternatively by obtaining prompt remittances for such expenses from owners in New York; certain forms are to be prepared in quadruplicate with one copy being given to Zim's representative in Chicago and one sent to New York, as are regular monthly statements showing debits and credits; and Sealanes is to pay...