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WASHINGTON TOWNSHIP MUNICIPAL AUTHORITY v. AMERICAN ARBITRATION ASSOCIATION AND CONEWAGO CONTRACTORS (05/15/81)

filed: May 15, 1981.

WASHINGTON TOWNSHIP MUNICIPAL AUTHORITY, APPELLANT,
v.
AMERICAN ARBITRATION ASSOCIATION AND CONEWAGO CONTRACTORS, INC.



No. 83 Harrisburg, 1980, Appeal from the Order of the Court of Common Pleas of Franklin County, Civil Action - Equity, at Equity Docket Volume 7, Page 143, 1979.

COUNSEL

Jan G. Sulcove, Chambersburg, for appellant.

Arthur R. Mehr, Philadelphia, for American Arbitration, appellee.

Kenneth I. Levin, Philadelphia, for Conewago, appellee.

Price, Watkins and Montgomery, JJ.

Author: Watkins

[ 287 Pa. Super. Page 79]

This is an appeal from the order of the Court of Common Pleas of Franklin County, Civil Action, Equity, and involves the appellant Washington Township Municipal Authority's appeal from an order which directed the appellant to proceed with arbitration before the American Arbitration Association (AAA). The appellant had commenced a suit in equity on October 20, 1979 seeking to enjoin the American Arbitration Association from requiring appellant to proceed to arbitration on a claim initiated by Conewago Contractors, Inc. Conewago filed an Answer and New Matter to the Complaint on May 21, 1979 and also presented a petition seeking to compel appellant to proceed with arbitration and requesting a stay in the equity action. After a hearing and the filing of briefs the court below granted Conewago's petition, stayed the appellant's equity action and ordered appellant to proceed with arbitration before the American Arbitration Association. From that order the appellant took the instant appeal.

[ 287 Pa. Super. Page 80]

On December 15, 1976 the appellant and Conewago entered into a written agreement by which Conewago agreed to install certain sanitary sewers, a pump station and certain force mains for the sum of $2,163,749.60. This contract was entered into after the project had been bid pursuant to the law of the Commonwealth. During the course of construction various disputes arose between appellant and Conewago and appellant's engineer. On October 10, 1977 Conewago filed a demand for arbitration of the disputes with the American Arbitration Association. The appellant refused to proceed with said arbitration and initiated its action in equity. The appellant's position is that the December 15, 1976 contract between it and Conewago provided for the settlement of disputes by an arbitration panel appointed by the Court of Common Pleas of the 39th Judicial District, Franklin County Branch and not by arbitration before the American Arbitration Association.

When the appellant advertised for bids the original document contained the following language pertaining to the settlement of disputes under "General Conditions":

"ARTICLE 16

ARBITRATION

"16.1. All claims, disputes and other matters in question arising out of, or relating to, this agreement or the breach thereof except for claims which have been waived by the making or acceptance of final payment as provided by paragraph 14.16, shall be decided by arbitration in accordance with the construction industry arbitration rules of the American Arbitration Association then obtaining. This agreement so to arbitrate shall be specifically enforceable under the prevailing arbitration law. The ...


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