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Participation in Arbitration Precluded Action to Stay Arbitration

The Second Department determined plaintiffs participated in arbitration initially and therefore could not bring a proceeding to stay arbitration:

Pursuant to CPLR article 75, “a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration, may apply to stay arbitration on the ground that a valid agreement was not made” (CPLR 7503[b]). Consequently, “a party seeking to avoid arbitration on the ground of no agreement to arbitrate can raise such objection only when it has not participated in the arbitration” … .

Here, the record demonstrates that the plaintiffs “participated in the arbitration” (CPLR 7503[b]…). The plaintiffs could not actively engage in the arbitration proceedings and simultaneously retain their right to seek subsequent judicial intervention pursuant to CPLR 7503(b), as such “forum-hedging” is incompatible with the legislative policy underlying CPLR 7503(b) … . Stone v Noble Constr Mgt Inc, 2014 NY Slip Op 02571, 2nd Dept 4-16-14

 

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