In New York, arbitration and mediation clauses are common in operating agreements, shareholder agreements, construction contracts, employment contracts, and real estate sales and lease agreements. New York is home to many arbitration forums, including the American Arbitration Association (AAA), Judicial Arbitration and Mediation Services (JAMS), and the Financial Industry Regulatory Authority (FINRA).
Arbitration involves the submission of a dispute to a private arbitrator or panel of arbitrators, whose decision and award will be binding upon the parties. Mediation involves the submission of a dispute to a non-binding mediator to facilitate a voluntary settlement. Arbitration is faster and more predictable than litigation, but contrary to popular belief, can be more expensive than litigation because of the need to pay the arbitrator. Typically, the claimant is required to advance most costs of arbitration, but those cost can be shifted in the arbitration award. Under the American Arbitration Act and Article 75 of the New York Civil Practice Law and Rules, the New York courts recognize a strong public policy in favor of arbitration.
Our Attorneys Prevail in Arbitration
Our firm's lawyers are experienced in arbitrating commercial disputes and have obtained impressive results for our clients in arbitration. In one arbitration involving a contract for the replacement of nearly two thousand PTAC units in a major New York hotel, the firm's principal obtained an arbitration award in favor of the respondent in excess of a million dollars against the claimant. The firm has successfully compelled arbitration where the adversary sought to litigate, opposed the confirmation of an arbitration award, and served as the neutral arbitrator resolving a dispute between adversaries. The firm's lawyers will take the time to thoroughly review the details of your case and devise an arbitration strategy to achieve your objectives while minimizing the cost of arbitration.
Contact Us to Schedule a Free Initial Consultation
Contact Muchmore & Associates PLLC at 347-983-2490 to schedule a free initial consultation if you are involved in a dispute subject to arbitration, including the following:
Arbitration of Contract Disputes: While it is preferable to hire a lawyer before signing a contract, many clients wait to retain an attorney until arbitration is imminent. In such cases, it helps to engage a lawyer before the contract is terminated to put your position in writing and ensure you comply with the contract's provisions. Where possible, an effort should be made to settle the dispute on reasonable terms. If the adversary is unwilling to be reasonable, you need an lawyer that can prove your case and prevail in arbitration. Our lawyers aim to resolve disputes efficiently, but do not bend to unreasonable adversaries.
Arbitration of Business Disputes: Many shareholders agreements and operating agreements in New York provide that disputes must be resolved through arbitration or mediation. These clauses are frequently broad, and include not only disputes under the agreement, but claims of breaches of fiduciary duty and the duty of good faith and fair dealing. Where one of the owners of a business materially breaches the operating or shareholder agreement, or his fiduciary obligations, the dispute must be submitted to arbitration or mediation, where negotiations typically focus on buying out one of the parties to the dispute, often pursuant to a formula or a bidding procedure specified in the contract.
Arbitration of Construction Disputes: Construction contracts in New York frequently contain arbitration clauses stating that any disputes must be resolved by the Arbitration Association of America under its Construction Industry Rules. Arbitration of construction disputes can be complex, as the contracts are often riddled with exculpatory clauses, including notice of claim requirements, no-damage-for-delay clauses, pay-when-paid clauses, liquidated damages clauses, and change order approval processes. Our lawyers have deep knowledge of construction law and have arbitrated and litigated more than a hundred cases involving the breach of construction contracts.
Arbitration of Employment Contract Disputes: Employment contracts in New York often contain arbitration clauses, which can reduce the risk of unpredictable jury verdicts, and dissuade claimants from advancing the costs of arbitration for frivolous claims. The firm's lawyers are experienced in issues of employment and labor law, including issues arising under the Fair Labor Standards Act, Title VII of the Civil Rights Act, and the New York Labor Law. We can defend your company from employment related claims in arbitration or litigation, and can use arbitration to secure your rights under non-compete, non-solicitation and non-disclosure provisions in your employment contracts.
Mediation: Mediation is simply a form of assisted settlement negotiation where a neutral mediator attempts to bring the parties toward a voluntary settlement. Many contracts have clauses requiring mediation before either party can assert claim in litigation or arbitration. Limited mediation sessions are sometimes provided by the New York courts free of charge, and can be productive where the adversary is reasonable. Where mediation is unsuccessful in resolving a dispute, the dispute must be resolved through litigation or arbitration, as mediators lacks the authority to issue a binding determinations on disputed issues.
Petitions to Compel or Stay Arbitration: Petitions to compel or stay arbitration are governed by § 7503 of the New York Civil Law and Rules. Normally, the claimant seeking to arbitrate the dispute files and serves a demand for arbitration with the contractually designated arbitration body, such as the American Arbitration Association. The respondent must then set file its written response, and if it fails to do so, an arbitration award will be entered on default. Where the respondent seeks to avoid arbitration, it can file a motion in court to stay arbitration, and the claimant can cross-move to compel arbitration. Where a plaintiff files a lawsuit in court based on a contract that contains an arbitration clause, the defendant can file a motion to stay the lawsuit and compel arbitration. So long as the contract encompasses a clear agreement to arbitrate, the New York courts will general compel arbitration.
Confirming or Vacating Arbitration Awards: Once an arbitration award is granted, if the respondent fails to pay it, the claimant must file a petition in court pursuant to § 7510 of the New York Civil Practice Law and Rules to confirm the arbitration award. The respondent may oppose the petition and cross-move to vacate or modify the arbitration award. The only grounds for doing so are provided in § 7511 of the New York Civil Practice Law and Rules, and include (i) corruption, fraud or misconduct in procuring the award; or (ii) partiality of an arbitrator; or (iii) an arbitrator, or agency or person making the award exceeded his power; or (iv) failure to follow procedure. Typically, the arbitration award is confirmed and entered as a judgment of the court.