Astra Footwear Industry v. Harwyn International, Inc.

Astra Footwear Industry (Astra) (plaintiff) was a shoe manufacturer in Yugoslavia. Harwyn International, Inc. (Harwyn) (defendant) was a shoe distributor with offices in New York. In 1975 Astra and Harwyn contracted for a large sale of shoes. An arbitration clause in the contract stated disputes that the parties could not amicably settle and that were asserted against Harwyn should be arbitrated at the “Chamber of Commerce in New York.” An entity named the New York Chamber of Commerce (NYCC) existed as an arbitration institution until 1973, when it merged with another government entity and stopped conducting arbitrations. Astra claimed that Harwyn failed to make the required payments and filed a motion in federal district court seeking compelled arbitration of the dispute at the International Chamber of Commerce (ICC) in New York. Although Astra first attempted to arbitrate at the NYCC and was denied because of the merger, Astra argued in district court that the “Chamber of Commerce in New York” referred to the New York office of the ICC. Astra also stated that if the court found that the clause intended to refer to the NYCC, Astra was willing to arbitrate at any institution selected by the court. Harwyn opposed arbitration. Harwyn contended that the agreement referred to the NYCC, not the ICC, and that Harwyn had specifically negotiated for arbitration at the NYCC because of communism-related concerns and its belief that the NYCC would properly consider Harwyn’s interests. Harwyn argued that a jury should decide the question of whether the agreement to arbitrate was a general agreement or limited to arbitration at a particular tribunal. Astra argued that the court should decide the issue and then appoint arbitrators if necessary.