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IN RE HOME INS. CO.

December 11, 1995

In the Matter of the Petition of THE HOME INSURANCE COMPANY as Successor in Interest to THE HOME INDEMNITY COMPANY Seeking an Order Directing SVEDALA INDUSTRIES, INC. to Proceed to Arbitration


The opinion of the court was delivered by: KOELTL

 JOHN G. KOELTL, District Judge:

 This is a petition to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 4 (the "Arbitration Act") brought by The Home Insurance Company ("Home") against Svedala Industries Inc. ("Svedala"). Svedala cross-moves to dismiss the petition.

 I.

 Home bases its petition on an arbitration clause in a Retrospective Premium Agreement (the "Premium Agreement") between itself and Svedala. The Premium Agreement governs certain premium calculations in connection with a Workers Compensation and Employers Liability Insurance policy (the "Policy") issued to Svedala by Home. Home seeks to submit to arbitration certain disputed retrospective premiums billed under the Premium Agreement that Svedala has refused to pay.

 Home also seeks to enjoin Svedala from proceeding with a related action pending in the Eastern District of Wisconsin. See 9 U.S.C. § 3. In that action, removed by Home from Milwaukee County Circuit Court, Svedala claims that Home "breached its fiduciary obligations . . . and further breached its duties of good faith and reasonableness" and seeks a declaratory judgment that Svedala does not owe the disputed premiums that Home billed. (See Aff. of Mark J. Fisher, dated July 17, 1995, Ex. B.) Home responded to Svedala's declaratory judgment action by moving for a stay pending arbitration. That motion was pending at the time Home's petition was argued before this Court on September 8, 1995.

 II.

 Initially, Svedala argues that Home's petition should be dismissed on two procedural grounds. First, Svedala contends that Home's removal of the Wisconsin state court action "affirmatively invoked the jurisdiction of the [Wisconsin] District Court and sought relief that is, in the first instance, presumptively adequate to protect its contractual rights." (Resp. Br. Opp'n at 8.) Svedala argues that this Court is presented with no justiciable controversy, and therefore has no subject matter jurisdiction, because Home is already before a federal court seeking to compel arbitration. Svedala further argues that Home's petition should be dismissed because the Wisconsin suit was filed before this petition, relying on the first-filed rule. See, e.g., First City Nat'l Bank & Trust Co. v. Simmons, 878 F.2d 76, 79 (2d Cir. 1989) ("Where there are two competing lawsuits, the first suit should have priority, absent a showing of balance of convenience . . . or . . . special circumstances giving priority to the second." (citations omitted)).

 The notion that Home's removal of the Wisconsin state court declaratory judgment action operated in some fashion to revoke this Court's subject matter jurisdiction is seriously flawed. Svedala presumes that Home could obtain an order compelling arbitration from the Eastern District of Wisconsin and that it must do so having removed Svedala's state court action. This position cannot be reconciled with the well-established principle that only the district court in the district where the arbitration will proceed may order arbitration. Under the Arbitration Act, arbitration must proceed in the district where the order directing arbitration is filed, see 9 U.S.C. § 4, and a federal district court may only compel arbitration in its own district. See 9 U.S.C. § 4; Oil Basins Ltd. v. Broken Hill Proprietary Co., Ltd. 613 F. Supp. 483, 486 (S.D.N.Y. 1985) ("The Federal Arbitration Act makes it clear that . . . a federal district court may only compel arbitration in its own district."); Lawn v. Franklin, 328 F. Supp. 791, 793 (S.D.N.Y. 1971) ("The proper District within which the petition for such order should be filed is the District where the 'proceedings' by virtue of the contract of the parties are to take place."); see also Farr & Co. v. CIA. Intercontinental de Navegacion de Cuba, 243 F.2d 342, 346 (2d Cir. 1957) ("Section 4 of the Arbitration Act requires that when parties have agreed to arbitrate the arbitration be had in the district where the petition is filed."). Because the arbitration clause in the Premium Agreement on which Home relies expressly provides that arbitration will take place in New York, (see Fisher Aff. Ex. A), Home could not obtain an order to compel arbitration in the Wisconsin action. As Judge Gordon himself recognized:

 
[Home] was obligated to file its petition to compel arbitration in [the Southern District of New York] as the arbitration agreement provides for arbitration in New York City; a petition to compel arbitration must be filed in the district in which arbitration is required.

 Svedala, slip op. at 3 (citing Merrill Lynch, Pierce, Fenner & Smith v. Lauer, 49 F.3d 323, 327 (7th Cir. 1995)). Regardless of Home's actions in Wisconsin, the only court capable of ordering arbitration in this dispute is this one. *fn1" Similarly, the first-filed rule is inapplicable here because it only applies where the second-filed action embraces the same issue as the first. See City of New York v. Exxon Corp., 932 F.2d 1020, 1025 (2d Cir. 1991). Accordingly, Svedala's cross-motion to dismiss the petition is denied.

 III.

 Home's petition to compel arbitration is governed by the Federal Arbitration Act, which provides that written agreements to arbitrate disputes "shall be valid, irrevocable, and enforceable." 9 U.S.C. § 2. It is well understood that whether an agreement to arbitrate governs a particular dispute is essentially a matter of contract interpretation. See, e.g., Collins & Aikman Prods. Co. v. Building Systems, Inc., 58 F.3d 16, 19 (2d Cir. 1995) ("Federal arbitration policy respects arbitration agreements as contracts that are enforceable in the same way as any other contract."); 99 Commercial Street, Inc. v. Goldberg, 811 F. Supp. 900, 905 (S.D.N.Y. 1993) ("Arbitration is first and foremost a matter of contract . . . ."). And, while parties are not required to arbitrate when they have not agreed to, see Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478, 103 L. Ed. 2d 488, 109 S. Ct. 1248 (1989), they are bound by provisions to which they have agreed, see Genesco, Inc. v. T. Kakiuchi & Co., ltd., 815 F.2d 840, 845 ...


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