## Facts

- Astra Footwear Industry, a Yugoslav footwear manufacturer, contracted in May 1975 to sell Harwyn International, a New York distributor, 13,400 pairs of shoes.
- Astra alleged it shipped shoes under the agreement and that Harwyn refused to pay invoices totaling $115,820.
- The contract contained an arbitration clause requiring arbitration of disputes not amicably settled, assigning proceedings to a Belgrade chamber for export trade, and stating that when the buyer was “accused,” “the Chamber of Commerce in New York” was competent.
- The parties disputed what “the Chamber of Commerce in New York” meant: Astra asserted it referred to the International Chamber of Commerce; Harwyn asserted it referred to the New York Chamber of Commerce.
- The New York Chamber of Commerce had ceased arbitrating disputes after a 1973 merger, and the International Chamber of Commerce declined to proceed without both parties’ consent.
- Astra petitioned in federal court to compel arbitration and to appoint an arbitrator or arbitral body under the Federal Arbitration Act.

## Issues

1. Whether the arbitration clause reflected a general agreement to arbitrate contract disputes, or an agreement to arbitrate only before a specific New York institution such that arbitration would fail if that forum was unavailable.
2. Whether the unavailability of the designated arbitral forum constituted a “lapse” permitting court appointment of a substitute arbitrator under 9 U.S.C. § 5.
3. Whether any dispute about the meaning and enforceability of the arbitration clause required a jury determination rather than judicial resolution on a petition to compel arbitration.

## Decision

- The court granted the petition to compel arbitration.
- The court held the parties had a valid, enforceable agreement to arbitrate disputes arising from the contract.
- The court ruled that the unavailability of the forum identified in the clause constituted a lapse under 9 U.S.C. § 5 and authorized judicial appointment of a substitute arbitrator or arbitral institution.
- The court rejected the request for a jury determination because the existence of an arbitration clause was conceded and the remaining questions were contractual interpretation and enforcement under the FAA.

## Legal Principles

- Arbitration clauses are construed in light of the FAA’s strong policy favoring enforcement of agreements to arbitrate.
- When a contract shows a dominant intent to arbitrate, the failure or unavailability of the named arbitral forum does not, by itself, nullify the arbitration agreement.
- Under 9 U.S.C. § 5, a court may appoint a substitute arbitrator or arbitral body when the agreed method for selecting the arbitrator fails or the designated forum is unable or unwilling to act.
- Questions of arbitrability and enforcement under the FAA may be decided by the court where material facts about the existence of an arbitration agreement are not genuinely disputed.

## Conclusion

The court enforced the parties’ agreement to arbitrate despite uncertainty and unavailability of the specified New York forum, compelled arbitration under the FAA, and used 9 U.S.C. § 5 to appoint a neutral substitute decisionmaker rather than treating the forum failure as defeating arbitration.


Astra Footwear Indus. v. Harwyn Int’l, Inc., 442 F. Supp. 907 (S.D.N.Y. 1978)