Court Opinion

ID: 5769796
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:29:52.588023+00
Date Added: 2024-06-11T08:41:44.595148
License: Public Domain

Steuer, J. (dissenting).
Marship Corporation, owner of the M/V Nicolas Maris, leased the .ship to Vigo Steamship Corporation on a time charter. During the term of the charter, Vigo leased the ship to Frederick Snare Corporation on a voyage charter. During the voyage the vessel suffered severe damage. All three parties participated in a survey of the damage by independent surveyors and all parties agreed that the damage so done amounted to $335,000. Both charter parties contained arbitration clauses. According to both, arbitration was to be by three arbitrators, one chosen by each party and a third selected by the two so chosen.
Marship demanded arbitration against Vigo and Vigo demanded arbitration against Snare. Following the demands, Vigo moved to consolidate the arbitrations. Marship raised no objection. Snare opposed the application and, upon its being granted, takes this appeal. The specifications of error are that Snare is being compelled to arbitrate against Marship, a party with whom it has no contractual relationship; that in a consolidated proceeding the arbitrators would be prone to error; and that the arbitrations are governed by the Federal Arbitration Act (TJ. S. Code, tit. 91, § 1 et seq.) which does not allow consolidation.
We do not regard any of these contentions as well taken and believe that Special Term was entirely correct in granting the application. Snare is not being compelled to arbitrate with Marship. Whether or not Marship prevails against Vigo under the contract between them can have no effect on whether Vigo would be entitled to recover against Snare, and the presence of all three in the same proceeding does not affect this. It may well be that Vigo will concede liability to Marship as indicated by its professed intention to select as its arbitrator in the proceeding ag'ainst .Snare whatever person is designated by Mar-ship as Marship’.s arbitrator in its claim against Vigo. This is hardly a ground of objection: in fact, it will remove a ground of objection. If Vigo concedes its liability it cannot be said that the arbitrators would be confused by any distinction in the two charter parties.
It was conceded on argument that, if the parties had proceeded by way of actions at law rather than arbitration, the *15resulting lawsuits would have been consolidated and that pragmatic considerations would make any other disposition an abuse of discretion. As we allow consolidation of arbitrations under similar circumstances where no substantial consideration intervenes (Matter of Symphony Fabrics Corp. [Bernson Silk Mills], 12 N Y 2d 409), it should follow that, unless there is some overriding objection, it should be granted here.
It is claimed that there is such an overriding objection. These being maritime contracts, the right to enforce arbitration rests on Federal law, specifically the Federal Arbitration Act. It is further claimed that under that act consolidation of arbitration proceedings is not permissible. Nothing in the act itself mandates that conclusion. It is argued that the Federal courts have on certain occasions denied applications for consolidation. However, in no such instance, as reported, has the denial been based on the ground that consolidation is forbidden, but rather on the ground that the particular facts involved did not warrant a resort to that procedure.
Even assuming that practice in the Federal courts does not countenance consolidation of arbitration proceedings, that situation would not be .determinative of the instant application. It is now not subject to controversy that in maritime matters where judgment in pais is sought and the decision would not involve an inroad on the administration of maritime law, State courts have concurrent jurisdiction (Romero v. International Term. Co., 358 U. S. 354, 373). And the procedures, including the availability of arbitration, are such as the State law provides (Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109, revg. 233 N. Y. 373). It follows that as to matters of procedure State law governs.
The order .should be affirmed.
Eager, J. P., and Nunez, J., concur with McGttern, J.; Steuer, J., dissents in opinion in which Markewioh, J., concurs.
Order entered on October 22, 1968, reversed, on the law and on the facts, with $30 costs and disbursements to appellant, and movant’s petition denied and the cross motion of respondent Frederick Snare Corporation granted; and petitioner is directed to appoint an arbitrator on its own behalf and to proceed to arbitration with the respondent Snare.