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ROYAL AIR MAROC v. SERVAIR

February 7, 1985

ROYAL AIR MAROC, Petitioner,
v.
SERVAIR, INC., Respondent.



The opinion of the court was delivered by: SWEET

SWEET, District Judge.

Petitioner Royal Air Maroc ("RAM") and respondent Servair, Inc. ("Servair") have moved for relief with respect to Servair's effort to obtain arbitration RAM to dismiss Servair's counterclaim seeking enforcement of arbitration and Servair to enforce such arbitration under the Federal Arbitration Act, 9 U.S.C. § 4. For the reasons stated below, Servair's motion to compel arbitration will be granted and RAM's motion to dismiss the Servair counterclaim will be denied. The proceeding will be dismissed with leave to reopen if necessary to enforce the arbitration award or to take any further action to compel arbitration.

 The Parties

 Servair is a Delaware corporation with its prinicipal place of business in McLean, Virginia. Servair contracts with air carriers to provide a range of "on the ground" aircraft cleaning and handling services at various airports throughout the country. Servair maintains a facility at New York's Kennedy Airport. RAM, the international airline of Morocco, is a Morocco corporation with its principal office in Casablanca, Morocco. RAM flies its planes into Kennedy Airport, among other places.

 On March 10, 1982, Servair entered into a written Ground Handling Agreement with RAM which contained an arbitration clause (the "Agreement"). Under the terms of the Agreement, Servair agreed to provide RAM with "on the ground" cleaning and handling services at Kennedy Airport through March 31, 1983. RAM admits that certain aspects of the agreement were extended beyond its initial termination on March 31, 1983, and that from April 1, 1983 until August 30, 1984, Servair rendered ground handling services to RAM. On August 30, 1984 RAM informed Servair that it was terminating the use of Servair's services.

 Prior Proceedings

 By letter dated September 20, 1984, Servair demanded arbitration of the dispute pursuant to the arbitration agreement between the parties contained in the Agreement. RAM failed to comply with the terms of the arbitration agreement and, instead, commenced the above entitled proceeding in the Supreme Court of the State of New York, County of New York, to stay such arbitration. On October 18, 1984, Servair removed the proceedings to this court. By agreement of the parties, this court has deemed RAM's petition a complaint seeking to enjoin the arbitration demanded by Servair.

 The RAM and Servair motions were heard and fully submitted on December 21, 1984, and neither side sought further discovery. The parties were not in dispute with respect to the facts, but of course urged opposite conclusions springing from those facts.

 The Facts

 The Agreement consists of three documents: the Main Agreement, Annex A, and Annex B. The Main Agreement sets forth all of the terms and conditions under which Servair agreed to provide cleaning and handling services to RAM aircraft landing at Kennedy Airport. Annex A sets forth the specific description of the services to be rendered by Servair. Annex B provides for the unit charges for the services specified in Annex A. Although the Agreement was signed by Servair and sent to RAM for countersignature, consistent with RAM's usual practice, Servair did not receive a copy signed by RAM. However, there is no dispute concerning the applicability or execution of the Agreement as such.

 Paragraph 11.2 provided: "Modification of, or additions to this Agreement or its Annexes must be approved in writing by the parties."

 Paragraph 11.3 of the Main Agreement provided: "This Agreement may be cancelled provided the cause of such termination is due solely to the Handling Company's Servair's failure to maintain reasonable standards of performance. . . ." Also, in order to cancel under that provision, (i) RAM had to identify Servair's alleged substandard performance with reasonable particularity; (ii) if Servair failed to achieve RAM's standards within 30 days after notice then; (iii) RAM had the right to give Servair 60 days notice of cancellation of the Agreement.

 Paragraph 11.4 of the Main Agreement permitted cancellation of some of the services described in Annex A. If either party wished to cancel "a portion of the assistance to be furnished by Servair at Kennedy Airport " sixty ...


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