Review of Court Decisions - Dispute Resolution Journal - Vol. 35, No. 2
Originally from Dispute Resolution Journal
INTERNATIONAL—JURISDICTION COMMERCIAL RULES 1, 46 -ENTRY OF JUDGMENT—AAA
Language in the arbitration clause to the effect that judgment on the award "may be entered" in a Canadian court did not preclude the U,S, District Court from confirming the award in favor of a Canadian firm and against a Pennsylvania corporation. The contract for the sale of corrugated materials between Lake Utopia, a Canadian corporation, and Connelly Containers, a Pennsylvania firm, provided for arbitration pursuant to the rules then obtaining of the American Arbitration Association, The agreement also stated that "judgment on the award rendered may be entered by the highest court in New Brunswick having jurisdiction," A dispute over the applicability of the contract's force majeure clause was submitted to arbitration by the AAA in New York City. The panel eventually rendered an award granting Lake Utopia $650,000 on its claim and denying Connelly Containers' counterclaim in its entirety. Connelly opposed Lake Utopia's motion to conform the award in the United States District Court, contending that the court lacked subject matter jurisdiction because the agreement vested exclusive jurisdiction in the courts of New Brunswick. In granting the petition to confirm, the court found that "the designation of a single tribunal, in which an award 'may' be confirmed, does not indicate an intent that the designated court have exclusive jurisdiction." The court observed that the parties had agreed to be bound by the rules of the AAA, Section 1 of the Commercial Arbitration Rules states that where the parties provide for arbitration by the AAA, "the parties shall be deemed to have made these Rules a part of their arbitration agreement." Under section 46 of the Rules, the parties consent that judgment on the award may be entered in "any Federal or State Court having jurisdiction thereof," Since Rule 46 was in effect throughout the course of the arbitration proceedings, Connelly was incorrect in asserting that it did not agree to entry of judgment on the award in a federal court. Finally, the court referred to section 9 of the United States Arbitration Act, 9 U,S,C, §9, which states that where no court is specified in the parties' agreement, application for the entry of judgment on the award "may be made to the United States court in and for the district within which such award was made,"
Lake Utopia Paper Ltd. v, Connelly Containers, Inc, No, 79 Civ, 510 (S,D,N,Y, May 11, 1979), aff'd, 608 F,2d 928 (2d Cir,), cert, denied, 48 U,S,L,W, 3518 (U,S, Feb. 19, 1980) (No, 79-861),