§ 1 et seq. The parties have briefed their positions and, there being no dispute as to the facts, the petition is ripe for decision.
On May 14, 1969, Petitioner entered into a contract with Respondent to perform general construction work on a new hospital. Paragraph 7 of the contract provides that "all disputes arising in connection with this contract shall be submitted to arbitration . . .."
Respondent and Lawrie and Green, the project architects, executed a Certificate of Substantial Completion on July 18, 1972. By letter dated October 3, 1972, Petitioner made a formal demand upon the Respondent for the following amounts: $212,763.34 as the amount of money due Petitioner under the contract and being held by Respondent as "retainages"; $17,561.10 as change estimates not yet processed into formal change orders; $520,126.00 as "Delay-Impact claim including increased labor, costs, material costs, health, welfare and taxes, overhead, loss of subcontractors, loss of profit, cash flow disruption and loss of bonding capacity." A copy of this letter was sent to the architects, and, on October 12, 1972, Respondent notified Petitioner that the demands contained in the October 3 letter had been referred to the architects. Apparently this was done because of the provisions in para. 6 of the contract which gives responsibility for contract interpretation in the first instance to the architects.
The architects did not issue a written decision within 10 days, but rather, by letter to Petitioner dated November 9, 1972, requested more information on Petitioner's delay claim. There is no indication in the record that this requested information was furnished to the architects. On November 22, 1972, Petitioner filed a Demand for Arbitration with the American Arbitration Association concerning the claims as outlined in the October 3, 1972 letter to Respondents. By letter dated January 3, 1973, Respondents made it clear that they intended to resist any attempt to arbitrate Petitioner's claims for alleged delays caused by the Respondent. As of this date, Respondent has refused to arbitrate Petitioner's claims.
Respondent takes the position that Petitioner's claim for delay damages is not an arbitrable issue. On the face of it, Petitioner's claim would appear to fall within the near limitless boundaries of the arbitration clause which calls for arbitration in "all disputes arising in connection with this contract." Respondent cites Harrison F. Blades, Inc. v. Jarman Memorial Hospital Building Fund, Inc., 109 Ill.App.2d 224, 248 N.E.2d 289 which held that a claim for delay damages was beyond the scope of an arbitration clause identical to the clause in the case sub judice. However, that holding was an application of Illinois law under the Illinois Uniform Arbitration Act. In cases arising under the United States Arbitration Act of 1925, federal courts apply federal substantive law. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S. Ct. 1801, 18 L. Ed. 2d 1270 (1967). Federal substantive law requires that an agreement to arbitrate be liberally construed in favor of arbitration. Lundgren v. Freeman, 307 F.2d 104 (9th Cir. 1962); Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir. 1961), cert. denied, 368 U.S. 817, 82 S. Ct. 31, 7 L. Ed. 2d 24. The federal policy favoring arbitration was perhaps best stated by the Supreme Court in a case brought under § 301 of the Labor Management Relations Act, United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-583, 80 S. Ct. 1347, 1353, 4 L. Ed. 2d 1409 (1960):
"An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage."