New York’s Attitudes to Arbitration and Mediation Clauses – Letter

Dear Maria,

Based on your request, I have decided to write to you a letter that addresses New York’s attitudes to arbitration and mediation clauses, as well as what the courts have said about the desirability of using alternative dispute resolution methods to settle disputes.

New York courts, both state and federal, have remained impartial and fair regardless of nationality of parties in resolving matters put before them by people all over the world. New York courts offer justice and cost efficiency when it comes to dispute resolution. The state courts also offer necessary support during enforcement of arbitration agreements. For this reason, New York hosts some of the most respected alternative dispute resolution and arbitration institutions such as the JAMS International, the International Center for Dispute Resolution, the ICCS’s United States Council for International Business, and CPR International Institute for Conflict Prevention and Resolution. Parties always choose New York courts when they want to solve international disputes, especially those people who want fairness and predictability in the resolution of their disputes (Hurlock et al., 2011). These explanations tell you how effective the New York Courts are as far as arbitration and alternative dispute resolution are concerned.

Following a comprehensive research, I was able to locate two different cases that outline the attitude of New York courts to arbitration and mediation clauses, as well as to the use of alternative dispute resolution methods in settling disputes. The first case is that of CB Richard Ellis, INC. v. American Envtl. Waste Mgmt. 1998 U.S. Dist. LEXIS 20064. In this case, the plaintiff had made a contract with the defendant’s company, requiring the company to remove wastes. The plaintiff and the defendant had a written contract under the general mediation clause that govern “any disputes” controversy or claim that may rise related to the agreement. The same clause could also be used as a reference when the plaintiff sued for fraud, breach of contract, unjust enrichment, paying kickbacks, and overbilling. The defendant took the matter to court to compel for mediation. The New York court found that the Federal Arbitration Act could be used to settle the controversy. The court worded the mediation clause broadly, without any exclusions, as it maintained that terms of the contract had been violated under the Federal Arbitration Act. In this case, the court had a strong belief that mediation was necessary and ruled in favor of arbitration, while addressing only those disputes that touched on matters of the written contract.

The second case is that of Dean Witter Reynolds v. Byrd, 470 U.S. 213, 218, 84 L. Ed. 2d 158, 105 S. Ct. 1238 (1985). In this case, the court had to settle a dispute concerning violation of a written agreement. The respondent had invested 160,000 United States dollars in securities through a broker-dealer, the petitioner, in 1981. The two parties made a written contract to mediate any issues that could arise suppose either of them happened to go against the terms of agreement. Later, the account declined by more than 100,000 United States dollars. Through the Federal District Court, the respondent filed a case against the petitioner claiming that he had violated the Securities Exchange Act of 1934 and other state provisions. The court late rules in support of the arbitration while pointing out the relevance of state provisions in alternative dispute resolutions.

I hope these two cases will help you make the most appropriate decision concerning your plans. From the two cases, it is clear that the New York state courts will enforce your provisions if they are relevant to the stated contracts.


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