In re the Arbitration between Woodcrest Fabrics, Inc. & Taritex, Inc.

98 A.D.2d 52, 469 N.Y.S.2d 728, 1983 N.Y. App. Div. LEXIS 20848
CourtAppellate Division of the Supreme Court of the State of New York
DecidedDecember 20, 1983
StatusPublished
Cited by7 cases

This text of 98 A.D.2d 52 (In re the Arbitration between Woodcrest Fabrics, Inc. & Taritex, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Arbitration between Woodcrest Fabrics, Inc. & Taritex, Inc., 98 A.D.2d 52, 469 N.Y.S.2d 728, 1983 N.Y. App. Div. LEXIS 20848 (N.Y. Ct. App. 1983).

Opinion

opinion of the court

Sullivan, J.

On or about September 24, 1981, Taritex, Inc., an importer of textile fabric, entered into a contract with Wood-crest Fabrics, Inc., a converter of such fabric, for the sale of approximately 50,000 yards of grey blended voile to Wood-crest. That same day Taritex forwarded to Woodcrest a sales contract which contained a broad arbitration clause providing for resolution of all disputes before the General Arbitration Council of the Textile Industry (GAG), a division of the American Arbitration Association. Woodcrest retained the contract without objection but did not sign it. Thereafter, Taritex delivered and Woodcrest accepted the goods specified in the contract. Woodcrest, however, asserting that the goods were defective, failed to pay the invoices [53]*53as they fell due. After efforts to reach an amicable settlement failed Taritex served a demand for arbitration, which was received by Woodcrest on March 29, 1982.

The demand for arbitration specifically identified the written contract pursuant to which arbitration was sought, set forth the name and address of the party serving the notice, quoted in full the broad arbitration clause contained on the face of the sales contract, described the dispute and specified the relief sought, and, in accordance with the requirements of CPLR 7503 (subd [c]), contained the following notice: “please take further notice that pursuant to CPLR § 7503 (c), unless within twenty days after service of this Demand for Arbitration you apply to stay this arbitration, you shall thereafter be precluded from objecting that a valid agreement was not made or has not been complied with and from asserting in court the bar of a limitation of time.” It is undisputed that an application to stay arbitration was not made until April 22,1982, some 24 days after Woodcrest received the demand for arbitration.

By letter dated March 30, 1982 to GAC, Woodcrest’s attorneys acknowledged receipt of the demand; gave notice that they were appearing in behalf of Woodcrest; and advised GAC that the fabric was substandard and defective and that in due course Woodcrest would interpose a counterclaim for damages. On April 8, 1982, 10 days after receipt of the demand for arbitration and with 10 days remaining during which Woodcrest could have timely petitioned for a judicial stay, its attorneys reversed their position and withdrew the notice of appearance because Taritex allegedly failed to attach to the demand for arbitration a copy of the contract referred to therein, and on the further ground that it failed to file three copies of said contract with GAC, as required by GAC rules. Determining that Taritex had fully complied with its rules, GAC advised Woodcrest’s attorneys on April 9 that, although they were free to withdraw their representation of Wood-crest, the arbitration proceedings would continue.

Despite this finding by GAC that its rules had been followed, and with nine days remaining in the 20-day statutory period in which to initiate a proceeding to stay [54]*54arbitration, Woodcrest neither applied to the court to stay arbitration nor requested a copy of the contract. As already noted, not until April 22,1982, 24 days after receipt of the arbitration demand, did it move to stay arbitration, alleging that it was not a party to an arbitration agreement with Taritex. Taritex opposed the motion and sought to compel arbitration, asserting, inter alia, the untimeliness of the application.

Special Term granted the motion, holding, apparently, at least in part, that the 20-day time limitation is not a bar to an application to stay arbitration “if the demand [does] not meet statutory requirements.” Taritex’ demand for arbitration, however, plainly complied in all respects with CPLR 7503 (subd [c]). Nor did Woodcrest contend otherwise. It argued, instead, that GAC rules were not followed because Taritex failed to attach a copy of the contract to the demand for arbitration served on it. The issue of compliance with the arbitrator’s procedural rules is, of course, a matter for the arbitrator.

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Bluebook (online)
98 A.D.2d 52, 469 N.Y.S.2d 728, 1983 N.Y. App. Div. LEXIS 20848, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-arbitration-between-woodcrest-fabrics-inc-taritex-inc-nyappdiv-1983.