MARSHALL, Circuit Judge:
From 1948 through 1963, Necchi Sewing Machine Sales Corporation (hereinafter "the Sales Corp.") was the exclusive American distributor of sewing machines manufactured by Necchi. This relationship was based on a series of contracts; the one involved in these appeals was executed on July 18, 1961 and amended by a subsequent agreement dated January 18, 1962 whereby the exclusive distributorship was extended until December 31, 1963.
The 1961 agreement provided that "All matters, disputes or disagreements arising out of or in connection with this Agreement shall be finally settled" by arbitration, and this provision was invoked when the relations between Necchi and the Sales Corp. deteriorated at the end of 1963 upon the refusal of Necchi to renew the exclusive distributorship with the Sales Corp.
The basic flaw in the order compelling Necchi to arbitrate stems from the approach of the District Court. The Court declined to decide whether the nine items listed in the Sales Corp.'s letter were "matters, disputes or disagreements arising out of or in connection with" the agreement. Instead the court took the position that this decision was to be made by the arbitrators, reasoning that "the broad scope of the arbitration provisions precludes us from [making the] preliminary inquiry as to whether the nine listed items arise `out of or in connection with the agreement.'" This was error, and quite clearly so. An order under the Federal Arbitration Act compelling a party to arbitrate is simply an order granting specific performance of an arbitration provision, Kulukundis Shipping Co., S/A v. Amtorg Trading Corp., 126 F.2d 978, 986 (2 Cir. 1942), and a court must interpret that provision to determine whether it requires arbitration on certain items prior to granting such relief. The court must decide whether the parties had agreed to submit the particular disputes to arbitration. Neither the federal policy in favor of arbitration nor the ostensible broad reach of the arbitration provision in question relieves the District Court of judicial responsibility of determining the question of arbitrability, unless the arbitration provision is so unusually broad that it clearly vests the arbitrators with the power to resolve questions of arbitrability as well as the merits, see United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 583 n. 7, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1963). The arbitration provision here is broad, but not that broad.
The Supreme Court has explicitly and unanimously reserved the question of arbitrability for the courts. "Under our decisions, whether or not the company was bound to arbitrate, as well as what issues it must arbitrate, is a matter to be determined by the Court on the basis of the contract entered into by the parties," Atkinson v. Sinclair Refining Co., 370 U.S. 238, 241, 82 S.Ct. 1318, 1320, 8 L.Ed.2d 462 (1962). "For arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit," United Steelworkers v. Warrior & Gulf Nav. Co., supra, 363 U.S. at 582, 80 S.Ct. at 1353. Accord, John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 547, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). This principle has been annunciated in actions to compel arbitration that were commenced under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, but we can perceive no reason why this principle should not be equally applicable in proceedings to compel arbitration that are like the instant one, commenced under the Federal Arbitration Act, cf. Engineers Ass'n v. Sperry Gyroscope Co., 251 F.2d 133, 135 (2 Cir. 1957), cert. denied, 356 U.S. 932, 78 S.Ct. 774, 2 L.Ed.2d 762 (1958). In fact this principle has been applied with little need for discussion in proceedings under the Federal Arbitration Act, see, e. g., Metro Industrial
Hence, the District Court had the responsibility of determining whether each of the nine items listed in the Sales Corp.'s letter demanding arbitration was a matter, dispute or disagreement "arising out of or in connection with" the 1961 agreement. The District Court failed to fulfill this duty and we thus have the alternative of making the determination for ourselves or remanding to the District Court. In respect to all the items, even on the meager record before us, the question of arbitrability seems so clear that no useful purpose would be served by leaving the question to be resolved by the District Court upon further proceedings, and in order to expedite this litigation, we will rule on the arbitrability of each of the items. Cf. Livingston v. John Wiley & Sons, Inc., 313 F.2d 52 (2 Cir.), aff'd, 376 U.S. 543, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964).
Items 4 and 5 are arbitrable, for they directly relate to certain provisions
Item 1 seeks to have Necchi "cease and desist" from engaging in certain practices claimed to constitute unfair trade practices and item 2 seeks "damages" and "accounting" for these practices. But there is no plausible claim that any of these practices contravened the agreement, or that Necchi's conduct in these affairs was governed by the agreement. The claim referred to in item 3 relates to services performed by the president of the Sales Corp. in attempting to settle a dispute between Necchi and another manufacturer involving a charge of patent infringement. This dispute has nothing to do with the 1961
We also hold that, in light of the circumstances of this case and language of the 1961 agreement, item 8 is not arbitrable. This item charges Necchi with failing to negotiate in good faith an extension of the distributorship agreement. The 1961 agreement provides that six months before its expiration both parties "shall examine the possibility of executing a new and, it is hoped, long term distributorship agreement for the same territory and at such terms and conditions as will be then discussed and defined."
The order below is affirmed insofar as it dismisses without prejudice Necchi's parallel declaratory judgment action and directs Necchi to proceed to arbitration on items 4 and 5 and to appoint an arbitrator for those purposes; in all other respects the order is reversed.
We are now repeating formally our demand for arbitration of our matters, disputes and disagreements against you, pursuant to the agreement between us dated July 18th, 1961, paragraph "(m)" thereof:
1. To compel you to cease and desist from:
2. You are liable and responsible to us for all damages and losses suffered or incurred by us by reason of the foregoing and an accounting for such damages is being demanded herein.
3. Our claim for $25,000 against you for the negotiations and arrangements made with Brother International, as agreed.
4. You are to repurchase from us parts and accessories for a value up to $75,000.
5. You are to assume and take over all of our responsibilities under the Necchi warranty.
6. You are to assume and pay us for such Necchi "equipment" supplied by us to and in your possession and control and for such equipment in our possession, intended for inclusion in Necchi machines.
7. You are to assume our licenses and obligations under agreements between Julius Hochman and us, pay us all monies due from you to us related to the Julius Hochman inventions, and reimburse us for all monies and property expended by us in connection with the development, improvement and promotion of the Julius Hochman inventions.
8. Your failure to negotiate in good faith with us for an extension of the distributorship agreement between us and an accounting by you for all damages suffered or occasioned by us thereby.
9. Reimbursement to us to the extent of your responsibility to us for monies expended by us during the past 16 years advertising and promoting the name "Necchi."
As you were heretofore notified in our letter to you dated March 2nd, 1964, we appointed A. P. Bersohn, Esq. of 551 Fifth Ave., New York, N. Y. as our arbitrator. In the same letter we called upon you to appoint an arbitrator so that the two arbitrators could then proceed as provided in the above referred to agreement as expeditiously as possible. You chose to disregard our notice and demand, and we are now advising you that unless you appoint your arbitrator forthwith and advise us his name within ten (10) days from date of this letter, we shall be constrained to proceed without any further delay.
Registered Mail — R.R.R.
cc Necchi S.p.A., Suite 1302, 375 Park Ave., New York, N. Y.
cc Fink & Pavia, Esq., 63 Wall St., New York, N. Y.
"3(l) Unless the distributorship is terminated before December 31, 1962 [later amended to "1963"], by reason of Necchisew's default, Necchi S.p.A. of Pavia shall undertake upon termination of this distributorship agreement all servicing of Necchi sewing machines sold by Necchisew, in conformity with the standard form of `guaranty' in use, provided, however, that in the event Necchi S.p.A. should withdraw from the American market, then the servicing obligations under the standard form of `guaranty' will be carried out by Necchisew to whom Necchi S.p.A. shall supply such spare parts as may be needed."