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SIGNATORY TO AGREEMENT WITH AN ARBITRATION CLAUSE CANNOT AVOID ARBITRATION SIMPLY BECAUSE PARTIES ENTWINED IN THE PROCEEDINGS ARE NOT SIGNATORIES (SECOND DEPT).

The Second Department determined that a signatory to an agreement with an arbitration clause could not avoid arbitration because other parties entwined in the matter were not signatories:

… Supreme Court should have denied that branch of Garnick’s motion which sought a permanent stay of arbitration of the claims against him by Teitelbaum and Coluccio, derivatively on behalf of Axcess I, LLC, and Brooklyn Axcess, LLC, respectively. Axcess I, LLC, and Brooklyn Axcess, LLC, are not signatories to the Axcess, Inc., shareholders agreement that contains the arbitration clause. Nevertheless, Garnick is estopped from avoiding arbitration with them based on the relatedness between Axcess, Inc., and its subsidiaries, Axcess I, LLC, and Brooklyn Axcess, LLC, and the agreements and controversies at issue, which are intertwined with the Axcess, Inc., shareholders agreement containing the arbitration clause, to which Garnick is a signatory. Matter of DeNobile v Panetta, 2018 NY Slip Op 07722, Second Dept 11-14-18

ARBITRATION (CONTRACT LAW, SIGNATORY TO AGREEMENT WITH AN ARBITRATION CLAUSE CANNOT AVOID ARBITRATION SIMPLY BECAUSE PARTIES ENTWINED IN THE PROCEEDINGS ARE NOT SIGNATORIES (SECOND DEPT))/CONTRACT LAW (ARBITRATION, SIGNATORY TO AGREEMENT WITH AN ARBITRATION CLAUSE CANNOT AVOID ARBITRATION SIMPLY BECAUSE PARTIES ENTWINED IN THE PROCEEDINGS ARE NOT SIGNATORIES (SECOND DEPT))

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