Justice Charles Ramos of the New York Commercial Division partially vacated an International Chamber of Commerce (“ICC”) arbitration award in a major legal battle between artificial sweetener giants NutraSweet and Daesang. Daesang Corp. v. The NutraSweet Co., et al., No. 655019/2016, 2017 BL 164971 (N.Y. Sup. Ct. May 15, 2017). The partial vacatur sends what was a $100,766,258 award in favor of Daesang back to the arbitral tribunal.
Commercial Division Compels Arbitration of a Contract Claim Based on an Arbitration Clause in a Related Agreement
In Fidilio v. Hoosick Falls Productions, Inc., No. 654066/2016, 2017 BL 107640 (Sup. Ct. Mar. 22, 2017), Justice Eileen Bransten of the New York County Commercial Division granted a motion to compel arbitration of a dispute relating to a short-lived reality TV show, Scrappers. Justice Bransten ruled that the arbitration clause in one agreement between Frank Fidilio, the show's creator, and Hoosick Falls Production, Inc. ("Hoosick"), the production company, required arbitration of Fidilio's claims against Hoosick brought under another agreement which was executed at the same time, by the same parties, governing the same subject matter. Fidilio's remaining claims for breach of contract as a third-party beneficiary, unjust enrichment, and an accounting against Viacom International Inc. and the show's distributor, New 38th Floor Productions, Inc. ("New 38th"), were dismissed for failure to state a claim. Fidilio provides important lessons for parties considering mandatory arbitration clauses in connection with transactions involving multiple agreements, as well as for litigants considering whether claims may be subject to mandatory arbitration under provisions of related agreements.
A recent decision from the New York Commercial Division decided whether arbitration could be avoided in an investment firm-employee dispute. In CF Notes, LLC v. Weinstein, No. 652206/2015, 2016 BL 352970 (N.Y. Sup. Ct. Oct. 13, 2016), Justice Saliann Scarpulla, of the Commercial Division, compelled a nonsignatory to arbitrate pursuant to a FINRA arbitration agreement. The decision relates to how financial securities firms structure bonuses to employees and to how nonsignatories may be compelled to arbitrate pursuant to arbitration agreements signed by their affiliates.
On September 23, 2016, in Pershing LLC v. Rochdale Securities, LLC, No. 651604, 2016 N.Y. Misc. LEXIS 3448 (Sup. Ct. N.Y. Cnty.), Justice Saliann Scarpulla of the Commercial Division issued a decision that reinforces the very significant burden a petitioner faces in order to successfully vacate an arbitration award under CPLR Article 75 and section 10 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq.