Originally from Dispute Resolution Journal

MUNICIPAL GOVERNMENT -— HAWAII REVISED STATUTES §§658-3. 658-4 APPLICATION TO APPOINT ARBITRATOR

The Supreme Court of Hawaii found that an agreement which provided for procedure to resolve disputes over the value of property in the transfer of a bus company's assets to the city was within the scope of its arbitration statute (HRS §658) but that a court cannot order the appointment of an arbitrator where the compliance with the selection procedure is a fact issue to be desolved by a jury (HRS §658-3). This dispute arose in connection with the transfer of a bus company's assets to the City of Honolulu. The value of the assets was to be established by means of a sole arbitrator selected by chosen representatives of the parties. The agreement specified that the arbitrator should be knowledgeable in the field, arguments would be presented to the arbitrator by the representatives, the arbitrator would be bound by no maximum or minimum figure, the arbitrator would render a decision within 30 days and that such decision would be final. After a problem arose in the selection of an arbitrator, the bus company claimed that no arbitrator had been selected pursuant to the terms of the agreement and therefore applied to the circuit court for appointment of an arbitrator. The city contended that (1) there was no agreement to arbitrate within the scope of the arbitration statute (HES §§658-1, 658-2) and (2) that an arbitrator had been selected pursuant to the agreement but the bus company's representative had subsequently withdrawn its approval. The circuit court ordered summary appointment of an arbitrator from a panel of ten individuals designated by the American Arbitration Association. With respect to the city's first contention the court stated that"[a]n agreement should be construed as a whole and its meaning determined from the entire context and not from any particular word, phrase or clause." The court noted that appraisal is indicated rather than arbitration when value is the only issue, but it is not the controlling factor. Omaha v. Omaha Water Co., 218 U.S. 180, 30 S. Ct. 615, 54 L. Ed, 991 (1910). Applying those considerations to the facts of the case, the court viewed the agreement as one which provides for arbitration. However, with respect to the city's second contention the court held that the lower court had erred in ordering the appointment of an arbitrator. The court stated that a party should not be allowed to unilaterally withdraw a name once submitted and that under HRS §658-4 the court cannot appoint an arbitrator where the parties have already agreed upon a name. The city's contention that an arbitrator had been named by the representatives pursuant to the agreement raised a factual issue of failure to comply with the agreement to arbitrate, the resolution of which under HRS §658-3 is for a jury.

Leeward Bus Co., Ltd. V. City and County of Honolulu, 564 P.2d 445 (Hawaii 1977).