Court Opinion

ID: 9447876
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:46:22.79554+00
Date Added: 2024-06-11T17:31:13.127693
License: Public Domain

CLARK, Circuit Judge
(dissenting).
The majority decision in my view is an undesirable departure from the liberal arbitration policy enunciated by this court in Robert Lawrence Co. v. Devon-shire Fabrics, Inc., 2 Cir., 271 F.2d 402, certiorari granted 362 U.S. 909, 80 S.Ct. 682, 4 L.Ed.2d 618, dismissed 364 U.S. 801, 81 S.Ct. 27, 5 L.Ed.2d 37, and by the New York courts in Petition of Uraga Dock Co., 6 A.D.2d 443, 179 N.Y.S.2d 474, affirmed 6 N.Y.2d 773, 186 N.Y.S.2d 669, 159 N.E.2d 212. The question before us is not whether arbitration is good or bad or whether a lawyer is wise in initially advising his client to sign an' agreement containing a comprehensive arbitration clause. The question is whether parties, by the device of an agreement which they have accepted to arbitrate future disputes, may obtain a speedy and efficient substitute for litigation in our crowded courts. As this court recognized in Robert Lawrence Co. v. Devonshire Fabrics, Inc., supra, Congress clearly intended that such a substitute should be available.
Under Section 4 of the Federal Arbitration Act, 9 U.S.C. § 4, a party to an arbitration agreement can obtain specific performance through an expedited motion practice, provided there is no substantial issue as to whether the other party entered into an agreement to arbitrate the dispute in question. “[U]pon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4. My brothers and I differ as to how far the court, in determining the question of the “making of the agreement for arbitration,” should consider the consequences of defective performance of the contract it*352self upon the effectiveness of the arbitration provision. When conditions are specifically attached to the arbitration provision, such as the giving of certain notice or the prior use of grievance machinery, there is no doubt that the court must determine whether these conditions precedent have been complied with before directing the parties to proceed to arbitration. The problem which has caused difficulty is whether the court must also evaluate compliance with those contract provisions which constitute conditions precedent to the contract generally, but which are not expressly made conditions precedent to arbitration. If the court intrudes into such matters of performance, it greatly multiplies the expense and delay attendant upon arbitration. Furthermore, in determining the adequacy of performance, the court is ruling on the merits of the controversy in a field which the parties have thought is better left to businessmen, or experts, or some other class of persons than judges and juries. And since the distinction between conditions precedent and conditions subsequent is seldom clearly drawn, a party resisting arbitration is sorely tempted to invoke court proceedings to determine whether certain terms of the contract are not in fact conditions precedent and whether a full trial is required of the complicated issue of performance.
Therefore, in order to minimize the likelihood of expensive court proceedings to determine arbitrability, courts should refrain from deciding questions of performance of substantive terms of the contract except where expressly required to do so by the parties. Those terms of the contract which have the function of conditions precedent should be deemed conditions precedent only to the obligation to perform the substantive terms of the contract unless they are expressly made conditions precedent to the duty to arbitrate. Thus in all cases involving the adequacy of performance we would not look to a dimly expressed “intent” of the parties to determine whether the arbitration clause is “separable” from the rest of the contract, but would rather make separability a strong principle of construction, to be overcome only by express language.
For the reasons above stated, I believe that Petition of Uraga Dock Co., supra, represents a sound view and should have been followed. I cannot agree with the suggestion that it is distinguishable, for it seems to me on all fours with our case here. Nor can I perceive that the New York courts have in some slight way retreated from the position there taken. The departure from the New York position thus creates a gap between federal and state law in the direction where I must regard the immediate federal trend as erroneous. I therefore agree with Judge Bryan’s reasoned and persuasive opinion below, D.C.S.D.N.Y., 183 F.Supp. 394, and dissent.