Court Opinion

ID: 5702320
Source: CourtListenerOpinion
Date Created: 2022-01-12 15:42:21.110961+00
Date Added: 2024-06-11T08:40:21.630873
License: Public Domain

Stevens, J. (dissenting).
The contract between the parties provided that the builder was to deposit a signed copy of the contract, a certified copy of the export license for the vessel and an agreement executed by the Dai-Ichi Bank, Limited, Tokyo, with the First National City Bank, Tokyo, “ Prior to the accrual of the initial payment due from the Buyer to the Builder ’’.
“ Within ten days after the receipt of telegraphic advice from the First National City Bank, Tokyo”, that the builder had deposited the above documents “ the Buyer shall pay by telegraphic transfer to the First National City Bank, Tokyo ”, the sum of $768,000 in United States money.
“ Upon the initial payment by the Buyer as provided herein-above, this Contract shall become effective and binding upon the parties. If, however, the Buyer fails to make the initial payment under the terms and conditions above, this Contract shall be null and void and no obligations, duties or liabilities shall attach to either the Builder or the Buyer under this Contract. ’’
The contract provided further in the same article (art. V) that all payments other than the initial payment were to be paid to the Dai-Ichi Bank, Ltd., Tokyo, but reaffirmed “The initial payment shall be paid ’ ’ as stated above.
*448Article VI provided for interest charges on default > payments of any instalment, and specified the manner in which notice of default for any instalment “ other than the first instalment ’ ’ should be given.
Article XXIII, the final article of the contract, entitled ‘ ‘ Effective Date ’ ’ read as follows:
“The effective date of this Contract shall be as provided in this Article:
“This Contract shall become effective only on fulfillment and realization of all of the following conditions:
“1) Signing of the Contract, Plan and Specifications by the Buyer and the Builder.
“2) Delivery by the Builder to the First National City Bank, Tokyo of a signed copy of this Contract and a copy of the Export License from the Japanese Government and the Security Agreement referred to in Article V.
“3) Payment by the Buyer to the Builder of the first instalment as provided in this Contract.”
It is not disputed that the initial payment by the buyer was not made within 10 days as called for by the provisions of article V. After notice of cancellation the respondent-appellant moved for arbitration, which was stayed by Special Term on motion of the petitioner-respondent.
I find myself unable to agree with the majority that arbitration was within the contemplation of the parties under the circumstances shown to exist here. Nor can I agree that the contract became binding and effective immediately and the arbitration clause operative.
To so hold, in my opinion, is to rewrite the contract for the parties and to give a strained and tortuous construction to the plain language of the contract. Parties may prescribe conditions precedent to the assumption of obligations and assume the risks attendant thereon and are afforded the protections provided thereby. Here this is especially true since they are dealing at arm’s length.
It seems clear from the language of the agreement and the facts not in dispute that the obligations or potential obligations were terminated by the act or failure to act of the parties and the contract never became effective. This arbitration which presupposes the existence of a valid contract, should not be granted. (Matter of Kramer & Uchitelle, 288 N. Y. 467.) Neither courts nor arbitrators have the power to make a new contract for the parties. (Matter of Kallus [Ideal Novelty & Toy Co.], 292 N. Y. 459.)
*449This case may be distinguished from Matter of Spectrum Fabrics Corp. (Main St. Fashions) (285 App. Div. 710, affd. 309 N. Y. 709) for in that case there were two writings and performance was substantially completed by delivery and acceptance of the goods. “ * * * the mere assertion by a party of a meaning of a provision which is clearly contrary to the plain meaning of the words cannot make an arbitrable issue. * * * If the meaning of the provision of the contract sought to be arbitrated is beyond dispute, there cannot be anything to arbitrate and the contract cannot be said to provide for arbitration.” (Matter of International Assn, of Machinists [Cutler-Hammer], 271 App. Div. 917, 918, affd. 297 N. Y. 519.)
I therefore dissent and vote to affirm.