| Zachariou v Manios |
| 2009 NY Slip Op 09291 [68 AD3d 539] |
| December 15, 2009 |
| Appellate Division, First Department |
| Evangelia Manios Zachariou, Respondent, v VassiliosManios, Appellant. |
—[*1] Hughes Hubbard & Reed LLP, New York (Derek J.T. Adler of counsel), forrespondent.
Order, Supreme Court, New York County (Richard B. Lowe, III, J.), entered April 7, 2009,which denied defendant's motion to permanently stay an arbitration commenced by plaintiff inNew York, unanimously affirmed, without costs.
Whether a dispute is arbitrable is generally an issue for the court to decide unless the partiesclearly and unmistakably provide otherwise (Matter of Smith Barney Shearson vSacharow, 91 NY2d 39, 45-46 [1997]). Where there is a broad arbitration clause and theparties' agreement specifically incorporates by reference the American Arbitration Association(AAA) rules providing that the arbitration panel shall have the power to rule on its ownjurisdiction, courts will "leave the question of arbitrability to the arbitrators" (Life Receivables Trust v GoshawkSyndicate 102 at Lloyd's, 66 AD3d 495, 496 [2009], quoting Smith BarneyShearson at 47). Here, however, since the parties' agreement contains a narrow arbitrationprovision, the reference to the AAA rules does not constitute clear and unmistakable evidencethat they intended to have an arbitrator decide arbitrability. Thus, that question is for the court todecide in the first instance (see e.g. Burlington Resources Oil & Gas Co. LP v San JuanBasin Royalty Trust, 249 SW3d 34, 40-42 [Tex 2007]; James & Jackson, LLC v WillieGary, LLC, 906 A2d 76, 81 [Del 2006]; see also Katz v Feinberg, 290 F3d 95, 97[2d Cir 2002]). Contec Corp. v Remote Solution Co., Ltd. (398 F3d 205 [2d Cir 2005]),relied upon by plaintiff, is distinguishable since the contract there contained a broad arbitrationclause.
When reviewing a narrow arbitration clause, the court must determine whether the subject ofthe parties' dispute is on its face within the purview of the clause or is a collateral matterconnected to the main contract (Gerling Global Reins. Corp. v Home Ins. Co., 302 AD2d118, 126 [2002], lv denied 99 NY2d 511 [2003]). Paragraph 10 of the parties' U.S.Agreement provides that an arbitrator will decide the limited issue of "the amount of the DecanaDistribution, the Prestige Distribution, the Texas Distributions and/or the Party Distribution." Inan earlier appeal from a decision on defendant's motion to compel arbitration, this Court foundthat such a compensatory damages claim was to be determined by the arbitrator (Zachariou v Manios, 50 AD3d257 [2008]). Read as a whole, plaintiff's notice of arbitration and statement of claim seeks adetermination of the amount of the same distributions. The arbitration notice contains a lengthystatement of facts outlining the history of the parties' dispute, but plaintiff [*2]does not specifically seek arbitration of the collateral mattersmentioned therein. Since the subject matter of the dispute falls within the purview of thearbitration clause, the motion court correctly denied a stay.
Although some of the relief requested in the arbitration, including specific performance andan accounting, appears to fall outside the narrow arbitration clause, that alone is not a basis tostay the arbitration. "An application for a stay will not be granted . . . even thoughthe relief sought is broader than the arbitrator can grant, if the fashioning of some relief on theissue sought to be arbitrated remains within the arbitrator's power" (Matter of Silverman[Benmor Coats], 61 NY2d 299, 309 [1984]). Defendant has failed to show that the mattersought to be arbitrated is beyond the arbitrator's power to grant some relief. We cannot assume inadvance that the arbitrator will exceed his powers as delineated in the parties' narrow arbitrationprovision (see Board of Educ. of Lakeland Cent. School Dist. of Shrub Oak v Barni, 49NY2d 311, 315 [1980]), and in the event the arbitrator does so, the arbitration award will besubject to vacatur (see CPLR 7511 [b] [1] [iii]; Silverman, supra).
Plaintiff's pursuit of related but legally distinct claims in this and other litigation did notconstitute a waiver of her right to arbitrate the amount of the various distributions due the parties(see Serino v Lipper, 55 AD3d472, 473 [2008]), particularly in light of the fact that defendant previously moved to compelarbitration.
We have considered defendant's remaining contentions and find them unavailing.Concur—Tom, J.P., Saxe, Renwick, DeGrasse and Richter, JJ.