Therefore, federal subject matter jurisdiction is proper and the defendants' motion to dismiss will be denied.
Next, we must determine what law to apply in construing the coverage of the arbitration clause. The federal law, embodied in the Arbitration Act, 9 U.S.C. § 1 Et seq., extends to transactions affecting interstate commerce. Whether interstate commerce is involved is a question of fact for the district court, Merritt-Chapman & Scott Corp. v. Pennsylvania Turnpike Comm'n, 387 F.2d 768 (3d Cir. 1967), and there can be little doubt that the transaction here involves interstate commerce. The parties apparently recognized that fact when they agreed to submit to arbitration "under the rules then obtaining of the American Arbitration Association." Complaint, Exhibit A. Therefore, the balance of our analysis of the effect of the arbitration clause is made under federal law.
Whether the particular dispute before us was intended to be covered by the arbitration clause is not clear from the contractual language. As a general rule parties are required to submit to arbitration disputes which could reasonably be within the intent of the agreement. Merritt-Chapman, supra. The plaintiff asserts that his claims, the essence of which are misrepresentation and fraudulent inducement to enter a contract, do not fall within the category of disputes required to be arbitrated. The Court of Appeals for the Third Circuit has recently held to the contrary. In Stateside Machinery Co., Ltd. v. Alperin, 591 F.2d 234, 236-237 (3d Cir. 1979), an issue was whether an arbitration clause stating "any unresolved issues will be subject to binding arbitration by the American Board of Arbitration" covered a claim for fraudulent inducement to enter the contract. The Court, after reviewing precedent and noting the liberal policy favoring arbitration under the Arbitration Act, decided that it did. Id. at 239-240. Admittedly, the language of the clause in Alperin "any unresolved issues" is broader than the language under consideration here. "Arising under" might arguably be construed to limit arbitrable issues to those arising after contract formation.
However, we find that the federal policy of promoting arbitration requires us to resolve the matter in favor of inclusion. In Alperin, supra at 240, the Court ruled "doubtful issues regarding the applicability of an arbitration clause are to be decided in favor of arbitration." In an earlier case, Hussey Metal Division v. Lectromelt Furnace Division, 471 F.2d 556, 557-58 (3d Cir. 1972), the Court wrote that disputes are to be resolved in favor of arbitration unless a court can state with "positive assurance" that the dispute was not meant to be arbitrated. We cannot say with any real assurance that the claims here were Not intended to be arbitrated, so we will order this dispute to arbitration in the forum provided by the parties in their contract.
Although the parties agreed to arbitrate in the City of New York, they did not agree to limit entry of judgment to a single forum. The Arbitration Act provides "if no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the district within which such award was made." 9 U.S.C. § 9. The parties' agreement provides for entry of judgment in "any court of competent jurisdiction." Their agreement to arbitrate under the rules of the American Arbitration Association automatically incorporates such rules, E.g., Varley v. Tarrytown Associates, Inc., 477 F.2d 208 (2d Cir. 1973), one of which Rule 46(c) provides that judgment on an arbitration award may be entered in any federal or state court having jurisdiction thereof.
Reading the Act along with the parties' agreement we find that this court would neither be precluded from entering judgment nor be the exclusive forum for entry of judgment. For these reasons, we will order the parties to arbitration in New York, and the clerk of court will be directed to mark this case closed. However, for reasons of judicial economy, we will retain jurisdiction for entry of judgment in this court, unless and until the parties to this action make application to another appropriate court for entry of judgment pursuant to 9 U.S.C. § 9.
An appropriate order will be entered.