S6650-2011 - NY Senate Open Legislation - Relates to the notice of intention to arbitrate

Relates to the notice of intention to arbitrate.

Sponsor: BONACIC Committee: RULES
Law Section: Civil Practice Law and Rules
Law: Amd S7503, CPLR

S6650-2011 Actions

Jun 21, 2012: COMMITTED TO RULES
Mar 22, 2012: ADVANCED TO THIRD READING
Mar 21, 2012: 2ND REPORT CAL.
Mar 20, 2012: 1ST REPORT CAL.396
Mar 8, 2012: REFERRED TO JUDICIARY

S6650-2011 Meetings

Judiciary: Mar 20, 2012

S6650-2011 Calendars

S6650-2011 Votes

VOTE: COMMITTEE VOTE: - Judiciary - Mar 20, 2012

Ayes (21): Bonacic, Flanagan, Fuschillo, Lanza, LaValle, Little, Nozzolio, O'Mara, Ranzenhofer, Saland, Zeldin, Hassell-Thompson, Breslin, Dilan, Espaillat, Gianaris, Krueger, Perkins, Serrano, Squadron, Stavisky
Nays (1): DeFrancisco

S6650-2011 Memo

BILL NUMBER:S6650

TITLE OF BILL:
An act
to amend the civil practice law and rules, in relation to the notice of
intention to arbitrate

This is one in a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation of her
Advisory Committee on Civil Practice.

This measure would amend subdivision (c) of CPLR 7503, which presently
provides for the service of a demand for arbitration or notice of
intention to arbitrate, and the time in which to object to
arbitrability. The notice requirement specifies that unless a party
served with a demand applies to stay the arbitration within twenty
days after service, such party shall thereafter be precluded from
challenging the agreement to arbitrate or from asserting in court the
bar of the statute of limitations. This measure would extend this
twenty-day time period to thirty days.

The service of a demand for arbitration may be done in the manner of a
summons, but also by registered or certified mail, return receipt
requested. The requirement under 7503(c) that the application must be
made "within twenty days after service" has been interpreted to mean
receipt by the respondent in the arbitration. (Knickerbocker
Insurance Co. v. Gilbert, 28 NY2d 57, 66 [1971]; Prudential
Securities Inc. v. Warsh, 214 AD2d [2d Dept 1995]). Nevertheless,
particularly in cases where there may be a genuine dispute regarding
the existence or scope of the agreement to arbitrate, or where
documentary evidence of same must be obtained, the twenty day time
period can be unreasonably short, and raise difficulties for a party
with a legitimate objection to arbitration.

The public policy in favor of arbitration is strong, and the twenty
day period advances the objective of a swift and sure resolution of
the arbitrability question.
However, we believe that, on balance, extending the period of time
from twenty to thirty days will ameliorate some legitimate
difficulties of a party with a valid objection to arbitration, and at
the same time not unreasonably affect the policy in favor of swift
resolution of arbitration disputes.

This measure would have no fiscal impact on the State. It would take
effect on the first of January next succeeding the date on which it
shall become law and shall apply to all actions pending on such
effective date or commenced on or after such effective date.

LEGISLATIVE HISTORY:
None. New proposal.

S6650-2011 Text


                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    6650

                              I N  SENATE

                                March 8, 2012
                                 ___________

  Introduced  by Sen. BONACIC -- (at request of the Office of Court Admin-
    istration) -- read twice and ordered printed, and when printed  to  be
    committed to the Committee on Judiciary

  AN  ACT  to  amend  the civil practice law and rules, in relation to the
    notice of intention to arbitrate

    THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section  1.  Subdivision (c) of section 7503 of the civil practice law
  and rules, as amended by chapter 1028 of the laws of 1973, is amended to
  read as follows:

    (c) Notice of intention to arbitrate. A party may serve  upon  another
  party  a  demand  for arbitration or a notice of intention to arbitrate,
  specifying the agreement pursuant to which arbitration is sought and the
  name and address of the party serving the notice, or of  an  officer  or
  agent  thereof if such party is an association or corporation, and stat-
  ing that unless the party served applies to stay the arbitration  within
  [twenty]  THIRTY days after such service [he] THE PARTY 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 limita-
  tion of time. Such notice or demand shall be served in the  same  manner
  as  a  summons  or  by  registered  or  certified  mail,  return receipt
  requested. An application to stay arbitration must be made by the  party
  served  within  [twenty] THIRTY days after service upon [him] SUCH PARTY
  of the notice or demand, or  [he]  THE  PARTY  shall  be  so  precluded.
  Notice  of  such  application  shall  be  served in the same manner as a
  summons or by registered or certified mail,  return  receipt  requested.
  Service  of  the application may be made upon the adverse party, or upon
  [his] SUCH PARTY'S attorney if the attorney's name appears on the demand
  for arbitration or the notice of intention to arbitrate. Service of  the
  application by mail shall be timely if such application is posted within
  the  prescribed  period.  Any  provision  in an arbitration agreement or
  arbitration rules which waives the right to apply for a  stay  of  arbi-
  tration is hereby declared null and void.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD14024-01-2

 S. 6650                             2

    S  2. This act shall take effect on the first of January next succeed-
  ing the date on which it shall have become a law and shall apply to  all
  actions  pending  on  such  effective date or commenced on or after such
  effective date.

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S6650-2011: Relates to the notice of intention to arbitrate