Court Opinion

ID: 6925538
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:19:05.601927+00
Date Added: 2024-06-11T16:06:55.077954
License: Public Domain

STEEL, District Judge,
(concurring).
I agree that the District Court erred in denying the motions to dismiss and remand and that its orders should be reversed. I also concur in the view, for the reasons stated by Judge Staley, that the contract between the parties evidences a transaction involving commerce within the meaning of 9 U.S.C. § 2, and that the incorporation by reference of the Pennsylvania Arbitration Act in the contract was tantamount to a specification by the parties that the judgment to be entered upon the award should be entered by the Court of Common Pleas of Pennsylvania.1 I cannot, however, endorse the view of Judge Staley that the District Court had jurisdiction of the matters before it.
9 U.S.C. § 9 provides:
“If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration,and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming *875the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title. If no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made. * * * ”
Thus, a Federal Court is empowered to confirm an award only in the event that the parties have failed to specify the court in which judgment is to be entered on the award. Since the parties have specified that the Court of Common Pleas of Pennsylvania shall have power to confirm the award and to enter judgment thereon, the jurisdiction of the Federal Court to confirm the award is lacking.
Nor is the Federal Court empowered to vacate or modify the award under §§ 10 and 11 of the Act. It is true that these sections seemingly confer upon the United States Court an unqualified power to vacate or modify the award; and give no indication that the parties must seek to vacate or modify an award in a state court when the parties have agreed to do so. Nevertheless, it is unreasonable to suppose that Congress intended that a Federal Court should have the right to modify or vacate an award despite the parties’ agreement that a state court should do so, when Section 9 withholds from the Federal Court the power to confirm the award when the parties have specified that another court shall do it.
The broad purpose of 9 U.S.C. § 1 et seq. is to require the parties to carry out an arbitration agreement according to its terms and in the courts of their choice, if one has been manifest. This is substantiated by the interpretation which has been placed upon § 4 of the Act. It provides that when a party to an arbitration agreement refuses to arbitrate in accordance with the agreement, the other party may petition a “United States District Court * * * for an order directing that such arbitration proceed in the manner provided for in such agreement.” Section. 4 does not, by its terms, make a Federal Court available for the enforcement of an arbitration agreement only when the parties have failed to specify another tribunal for its enforcement. The right to proceed in the Federal Court is seemingly absolute. In this respect § 4 is like §§ 10 and 11, which empower a Federal Court to vacate or modify an award. Yet, notwithstanding the unqualified power ostensibly granted to a Federal Court by § 4, a Federal Court cannot compel the parties to arbitrate if they have agreed that a state court exclusively shall enforce the agreement. Shanferoke Coal & Supply Corporation v. Westchester Service Corporation, 70 F.2d 297, 298 (2d Cir. 1934). Although this view was expressed by way of dictum by the Court of Appeals it is part of the ratio decidendi of the affirming opinion of the Supreme Court. Shanferoke Coal & Supply Corporation v. Westchester Service Corporation, 293 U.S. 449, 453, 55 S.Ct. 313, 79 L.Ed. 583 (1935). This phase of the Shanferoke decision is unaffected by the discussion in Bernhardt v. Polygraphic Company, 350 U.S. 198, 202, 76 S.Ct. 273, 100 L.Ed. 199 (1955).
In the instant case the reason for requiring the parties to seek post-award relief in the state court, whether for enforcement or modification or vacation of the award, is even more compelling. Here, the parties have actually arbitrated their differences in the manner prescribed by the statutes of Pennsylvania to the point where an award has been rendered and have specified that the Court of Common Pleas shall be the court in which post-award relief shall be sought.
While by 28 U.S.C. § 1332(a), Congress has broadly conferred upon the Federal Courts jurisdiction in diversity of citizenship cases involving controversies in excess of $10,000, 9 U.S.C. § 1 et seq. has withdrawn pro tanto the general grant of jurisdiction in cases where an arbitration agreement evidences a transaction involving commerce and provides that confirmation, modification or vacation of an award or the rendition of judgment thereon shall be by the court *876of another jurisdiction. Since in the case before us the parties agreed that the Court of Common Pleas should have these powers, the court below was without jurisdiction to exercise them. It should therefore, have granted the motion to dismiss the application to confirm and the motion to remand.

. The statement in Hartmann Coal Mining Co. v. Hoke, 157 F.Supp. 313, 315 (E.D.Pa.1957), that arbitration proceedings under the arbitration Act of Pennsylvania are not “exclusive”, the issue there being whether the Act was a bar to a suit on the award, is not germane to the question before us, viz. — whether parties who incorporate the Act by reference in an agreement and arbitrate their differences under it, have “specified” the Court of Common Pleas of Pennsylvania as the court to confirm the award (unless it is vacated or modified by that court) and to enter judgment thereon, within the in-tendment of 9 U.S.C. § 9.