How do you compel or stop an arbitration in New York?

This page explains how to force or stop an arbitration under New York law (CPLR 7501 to 7503) and the Federal Arbitration Act (9 U.S.C. 2 to 4, 16, and 205 to 206 for New York Convention cases). KOR Law LLP's international arbitration practice represents clients in cross-border commercial disputes involving foreign counterparties and in proceedings administered by the ICC, ICDR and LCIA.

What are the state and federal timelines?

How does it work, step by step?

1. Read the clause. A written arbitration provision in a contract involving commerce is "valid, irrevocable, and enforceable," subject to ordinary contract defenses (9 U.S.C. 2).
2. To start an arbitration in New York, serve a notice of intention. The notice must name the agreement and the serving party and warn that the recipient must apply to stay within 20 days (CPLR 7503(c)).
3. To resist, apply to stay within 20 days. The grounds are that no valid agreement was made, it was not complied with, or the claim is time-barred (CPLR 7503(b), (c)). Any clause waiving the right to seek a stay is void (7503(c)).
4. To compel, apply to the court. If there is no substantial question about the agreement, the court directs arbitration (CPLR 7503(a)); in federal court, on being satisfied the agreement and the failure to arbitrate are not in issue, the court orders arbitration (9 U.S.C. 4).
5. Use the right court. State applications go to the county the agreement names or as CPLR 7502(a) provides. A federal petition to compel looks through to the underlying controversy for jurisdiction, unlike applications to confirm or vacate (Badgerow v. Walters, 2022).
6. Ask for a stay of any lawsuit. A federal court must stay on request when the dispute is arbitrable (9 U.S.C. 3; Smith v. Spizzirri).
7. Cross-border cases. Under the Convention, a court may order arbitration at the place the agreement provides, even outside the United States, and may appoint arbitrators (9 U.S.C. 206).

Who decides whether a dispute is arbitrable?

Usually the court, unless the parties delegated the question. In Henry Schein, Inc. v. Archer and White Sales, Inc. (2019), the Supreme Court held that when a contract delegates arbitrability to the arbitrator, a court may not override that choice, even if it thinks the argument for arbitration is "wholly groundless." Institutional rules often supply that delegation: the ICDR Rules give the tribunal power to rule on its own jurisdiction, "including any objections with respect to arbitrability," without first going to a court (ICDR Art. 21(1)).

Courts do not decide the merits at this stage. Under CPLR 7501, the court "shall not consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits." Limitations defenses can be raised in court on a stay application, or later before the arbitrators, who may apply them in their discretion (CPLR 7502(b)); time limits for business claims are covered in how long you have to sue for breach of contract, fraud or a sale of goods in New York.

What if a lawsuit is already pending?

Then the request is made inside that case. Under the CPLR, if an issue claimed to be arbitrable is involved in an action pending in a court that can hear a motion to compel, the application is made by motion in that action, and an order compelling arbitration stays the action, or the part of it referable to arbitration (CPLR 7503(a)). The same rule applies to business cases pending in the Supreme Court's Commercial Division; for when a case belongs there, see whether a business dispute belongs in the New York Commercial Division.

Timing matters on the federal side too. The mandatory stay in 9 U.S.C. 3 is available only if "the applicant for the stay is not in default in proceeding with such arbitration," so a party that wants arbitration should say so early rather than litigating the merits first.

What if one side says the whole contract is void?

The arbitration clause is usually treated separately. Under the Federal Arbitration Act, a written arbitration provision is enforceable "save upon such grounds as exist at law or in equity for the revocation of any contract" (9 U.S.C. 2), which means the challenge must be aimed at the agreement to arbitrate. Institutional rules reinforce this: under the ICDR Rules, the tribunal may decide whether the main contract exists or is valid, the arbitration clause "shall be treated as an agreement independent of the other terms of the contract," and a finding that the contract is void does not, by itself, invalidate the clause (ICDR Art. 21(2)). A party arguing that it never agreed to arbitrate at all should raise that point promptly in court, within 20 days of a New York notice of intention (CPLR 7503(c)).

What changes the answer?

• Participation. A party who has already participated in the arbitration cannot apply to stay it under CPLR 7503(b).
• A delegation clause. It sends arbitrability to the arbitrator (Henry Schein).
• Federal jurisdiction. Section 4 petitions look through to the underlying dispute (Badgerow); see federal court or state court for a New York business dispute.
• A Convention agreement. A defendant sued in state court on a matter relating to a Convention agreement may remove it to federal court before trial (9 U.S.C. 205).
• Urgency. Interim relief may be needed before the question is resolved; see whether you can get emergency relief before a tribunal is formed.
• The institution's rules. Jurisdiction and joinder provisions differ; see how the ICC, ICDR and LCIA differ.

For example: a notice of intention from a former partner

Common mistakes

• Missing the 20-day window. Objections to the agreement and limitations are lost in court (CPLR 7503(c)).
• Participating, then trying to stop the arbitration. A stay under 7503(b) is for a party who has not participated.
• Asking a federal court to dismiss rather than stay. On request, a stay is mandatory (Smith v. Spizzirri).
• Arguing the merits. The court will not pass upon them (CPLR 7501).
• Ignoring a delegation clause. Courts must enforce it (Henry Schein).
• Forgetting what comes after. Challenges to the eventual award have their own deadlines; see whether you can challenge an arbitration award in a New York court.

What to do this week

1. Note the date and method by which any demand or notice was served.
2. Calendar 20 days from service.
3. Pull every agreement between the parties and check which contains the clause.
4. Check the named rules for a delegation of arbitrability.
5. Check limitations periods for each claim.
6. Decide whether a lawsuit already filed should be stayed.

Frequently asked questions

Can an arbitration clause waive my right to seek a stay?

No. Under CPLR 7503(c), any such waiver in an agreement or arbitration rules is void.

Can I appeal an order sending my case to arbitration?

In federal court, generally not immediately (9 U.S.C. 16(b)), while an order denying arbitration is appealable (16(a)).

What if the arbitration is supposed to happen abroad?

Under the Convention, the court can direct arbitration at the agreed place, even outside the United States (9 U.S.C. 206), and the eventual award is enforced under the Convention; see how to enforce a foreign arbitration award in New York.

Does the court decide whether my claim is any good?

No. It decides whether to arbitrate, not the merits (CPLR 7501).

Can I get a jury on whether an agreement exists?

In federal court, the party alleged to be in default may demand a jury on that issue, except in admiralty (9 U.S.C. 4).

How is the demand served?

In the same manner as a summons, or by registered or certified mail, return receipt requested (CPLR 7503(c)).