Opinion ID: 419680
Heading Depth: 3
Heading Rank: 3

Heading: Scope of arising hereunder

Text: 26 Ssangyong argues that the arbitration clause was designed to cover 'any' disputes between the parties. MEI argues that the phrase arising hereunder means arising under the contract itself and was not intended to cover matters or claims independent of the contract or collateral thereto. Neither side points to, and additional research has not uncovered, cases in this circuit which define arising hereunder in the context of an arbitration agreement. However, we are persuaded by a line of cases from the Second Circuit that MEI's interpretation is the more reasonable one. 5 27 We interpret arising hereunder as synonymous with arising under the Agreement. The phrase arising under has been called relatively narrow as arbitration clauses go. Sinva, Inc. v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 253 F.Supp. 359, 364 (S.D.N.Y.1966). In In re Kinoshita & Co., 287 F.2d 951, 953 (2d Cir.1961), Judge Medina concluded that when an arbitration clause refers to disputes or controversies 'under' or 'arising out of' the contract, arbitration is restricted to disputes and controversies relating to the interpretation of the contract and matters of performance. Judge Medina reasoned that the phrase arising under is narrower in scope than the phrase arising out of or relating to, the standard language recommended by the American Arbitration Association. Id. 28 In a recent case, a district court amplified Judge Medina's reasoning. In Michele Amoruso e Figli v. Fisheries Development Corp., 499 F.Supp. 1074, 1080 (S.D.N.Y.1980), the court discussed the Supreme Court's interpretation of an arbitration clause, noting that arising out of or relating to this agreement had been labelled a broad arbitration clause. Id. (quoting Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 398, 87 S.Ct. 1801, 1803, 18 L.Ed.2d 1270, 1274 (1967)). The court went on to say that in the case before it, the clause is limited to differences or disputes 'arising out of this Agreement'; notably, it omits reference to disputes 'relating to' the agreements. The omission is significant in the Second Circuit. Michele Amoruso e Figli, 499 F.Supp. at 1080. 29 The omission should be significant in this circuit as well. The standard clause suggested in the U.S.--Korean Commercial Arbitration Agreement contains the phrase, out of or in relation to or in connection with this contract, or for the breach thereof. We have no difficulty finding that arising hereunder is intended to cover a much narrower scope of disputes, i.e., only those relating to the interpretation and performance of the contract itself.