Source: https://en.m.wikisource.org/wiki/Shanferoke_Coal_Supply_Corporation_v._Westchester_Service_Corporation/Opinion_of_the_Court
Timestamp: 2019-04-25 05:16:05+00:00

Document:
The District Court interpreted the clause as making the arbitration enforceable only in state courts of New York; and on that ground denied the stay. On an appeal from the order of denial, the Court of Appeals held that, even if the clause should be so interpreted, section 3 of the United States Arbitration Act (9 USCA § 3) authorized the stay.  It therefore reversed the order and directed the District Court to grant the stay, with leave to that court 'to vacate it at any time, should it appear that the defendant is in default in proceeding with the arbitration.' 70 F.(2d) 297, 299. This Court granted certiorari 293 U.S. 541, 55 S.Ct. 95, 79 L.Ed. --.
Second. The plaintiff contends that the District Court was without power to grant the stay, because the contract provides that arbitration can be compelled only by proceedings in a state court of New York. The provision is that 'either party may apply to the Supreme Court of the State of New York for an order compelling specific performance of this arbitration agreement in accordance with the arbitration law of the State of New York.' The contract does not in terms prohibit proceedings in the federal court. Whether it should be construed so as to exclude the bringing of a suit in the federal court to compel specific performance of the agreement to arbitrate, we have no occasion to decide. For the District Court was not asked, in the proceedings now under review, to compel specific performance. The motion was to stay the action until arbitration shall have been had; and the direction of the Court of Appeals was limited to granting a stay. Section 3 of the United States Arbitration Act (9 USCA § 3) provides broadly that the court may 'stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement.' We think the Court of Appeals was clearly right in concluding that there is no reason to imply that the power to grant a stay is conditioned upon the existence of power to compel arbitration in accordance with section 4 of the act (9 USCA § 4).  Marine Transit Co. v. Dreyfus, 284 U.S. 263, 274, 52 S.Ct. 166, 76 L.Ed. 282, is not to the contrary. There is, no the other hand, strong reason for construing the clause as permitting the federal court to order a stay even when it cannot compel the arbitration. For otherwise, despite congressional approval of arbitration, it would be impossible to secure a stay of an action in the federal courts when the arbitration agreement provides for compulsory proceedings exclusively in the state courts, since only in exceptional circumstances may a state court enjoin proceedings begun in a federal court. See Central National Bank v. Stevens, 169 U.S. 432, 18 S.Ct. 403, 42 L.Ed. 807. Compare section 265 of the Judicial Code (28 USCA § 379); Kline v. Burke Construction Co., 260 U.S. 226, 43 S.Ct. 79, 67 L.Ed. 226, 24 A.L.R. 1077.
^2 In the lower federal courts there has been some difference of opinion as the whether a stay should be granted when the court is not in a position to compel arbitration. Compare Danielsen v. Entre Rios Rys. Co. (D.C.) 22 F.(2d) 326, 328, with The Silverbrook (D.C.) 18 F.(2d) 144. See, too, The Beechwood (D.C.) 35 F.(2d) 41; The Volsinio (D.C.) 32 F.(2d) 357, 358; Ex parte De Simone (C.C.A.) 36 F.(2d) 773; The Fredensbro (D.C.) 18 F.(2d) 983. Interpretations of the English arbitration statutes are in accord with the view adopted here. See Law v. Garrett, L.R. 8 Ch.Div. 26 (c.A.); Austrain Lloyd S.S.C.o. v. Gresham Life Assurance Society, (1903) 1 K.B. 249; Kirchner & Co. v. Bruban, (1909) 1 Ch.Div. 413; The Cap Blanco, (1913) Pro. Div. 130.

References: § 3
 § 3
 § 4
 v. 
 v. 
 § 379
 v. 
 v. 
 v. 
 v. 
 v.