The opinion of the court was delivered by: MOTLEY
Petitioner, Westinghouse Electric Corporation (Westinghouse), has moved for an order, pursuant to 9 U.S.C. § 9, confirming an arbitration award made in this district on May 13, 1969, awarding Westinghouse $79,819.59 against respondent, Reed-Martin, Inc., d/b/a International Constructors.
Westinghouse is a Pennsylvania corporation with a place of business in this district. Reed-Martin is an Alaskan corporation with a principal place of business in Hawaii.
Westinghouse, pursuant to the contract out of which the dispute here arose, had agreed to manufacture and to deliver certain electrical equipment to Reed-Martin who had a prime contract with Ryukyu Electric Power Corporation to construct a power plant at a site in Okinawa, Ryukyu Islands. The contract was entered into in July 1963 and included an arbitration clause which provided as follows:
ARTICLE XIV - ARBITRATION
a. the parties have negotiated this Contract in a spirit of mutual trust and cooperation. Should any disagreement arise out of this Contract after it has been executed, the parties shall seek to resolve such disagreement amicably by making sincere efforts to negotiate a mutually acceptable settlement.
B. In the event that the parties should reach an impasse after having explored every reasonable avenue toward the settlement of a disagreement (except one involving a nuclear incident), it shall be finally settled under the Arbitration Rules of the American Arbitration Association. As provided in said Rules, each party shall appoint one arbitrator, and the Court of Arbitration shall appoint the third arbitrator. Arbitration proceedings shall be conducted at such time and place as the Court of Arbitration shall decide. Judgment upon an award may be entered in any court of competent jurisdiction. In the event that the matter in dispute is also in dispute between Purchaser and the Owner, then at the request of either party, arbitration shall be deferred until Purchaser has processed the dispute under the disputes clause of contract NR DA 92-328 ENG 655 (which is G.S.A. General Provision, paragraph 6, January, 1958).
C. Work under this Contract shall continue, if reasonably possible, during any disagreement or arbitration proceedings, and any amount payable to either party under this Contract shall not be withheld on account of such disagreement or proceedings.
(Petitioner's Exhibit A, p. 18)
A dispute arose under the contract in which Westinghouse claimed that Reed-Martin had refused to make a final payment of $81,457.53. Reed-Martin opposed the claim on the ground that Westinghouse had not made timely delivery.
The arbitrators were chosen as provided by the rules of the American Arbitration Association, i.e., one by Westinghouse, one by Reed-Martin, and one by the American Arbitration Association. The time and place of the hearing on Westinghouse's claim in this district was also decided by American Arbitration Association in accordance with its rules. A hearing was held in this district on February 25, 1969, followed by the May 13, 1969 award to Westinghouse of $79,819.59, with interest from September 1, 1965, plus certain costs in the amount of $1,214.27.
The arbitrator chosen by Reed-Martin and its attorneys declined to attend the February 25, 1969 hearing. They objected to a certain preliminary ruling apparently made by the arbitrators on October 4, 1968 excluding a counterclaim made by Reed-Martin and the admission of evidence with respect thereto. They also objected to the place of the hearing. (Transcript of Hearing, 2/25/69, p. 11 and exhibits attached to transcript). The transcript of the hearing indicates that a copy was sent to the arbitrator chosen by Reed-Martin and their attorneys and that they were given a chance to review it before a decision was reached. (Transcript, p. 9). The arbitrator appointed by Reed-Martin dissented from the award and filed a dissenting opinion.
On June 3 Reed-Martin moved in the Superior Court, King County, State of Washington, to set aside the arbitration award under the law of that state on the ground that the parties had agreed that the law of the state of Washington would govern the contract. Three days later, on June 6, 1969 Westinghouse moved in this court for confirmation of the award. Non-resident service was effected on respondent in Hawaii on June 10, 1969, giving notice of the hearing of the instant motion on June 24, 1969. On June 13, 1969 Reed-Martin made an application to the Washington court for a temporary restraining order and order to show cause why Westinghouse should not be enjoined from proceeding in New York. The matter was set down for hearing on June 17, 1969, following which the court issued a temporary restraining order and order to show cause against Westinghouse to be heard on June 27, 1969. As a result, the hearing on the motion in this court was continued until July 1, 1969. On June 27, 1969 the Superior Court of King County, Washington concluded that it had jurisdiction concurrent with the jurisdiction of this Court in this matter but, "in the proper exercise of judicial restraint and for reasons of comity" it would not now interfere with the proceedings in this court. That court thereupon dissolved its temporary restraining order of June 19, 1969 and denied Reed-Martin's application for a permanent injunction against the prosecution of this motion without prejudice to remand from this court.
This court has jurisdiction pursuant to the United States Arbitration Act, 9 U.S.C. §§ 1-14, and on the ground of diversity of citizenship of the parties. 28 U.S.C. § 1332. Ballantine Books, Inc. v. Capital Distributing Co., 302 F.2d 17 (2d Cir. 1962). The contract between the parties is one evidencing a transaction involving commerce. 9 U.S.C. § 2. That agreement contains a written provision to settle by arbitration any disagreement arising out of the contract. 9 U.S.C. § 2. Moreover, the agreement between the parties provides that, ...