Action Stayed So Claim Governed by Narrow Arbitration Agreement Can be Determined

On November 18, 2021, the First Department issued a decision in Domp‚ Farmaceutici S.P.A. v. Lubris, LLC, 2021 NY Slip Op. 06440, holding that a lawsuit should have been stayed in favor of the determination of one claim by an expert, explaining:

Of the 11 remaining causes of action in the amended complaint, only one — denominated Count X — mentions the Development Plan. (The Development Plan is part of the Development Program.) Thus, only Count X should be referred to the expert.

Plaintiff contends that even Count X should not be submitted to the expert, because section 5.1.3 of the License Agreement, as amended, provides in pertinent part that the Independent Expert Decision process may not be utilized to seek changes to any approved Development Plan. However, it is far from clear that submitting Count X to the expert would result in changes to the Development Plan. Because section 14.5.1 of the License Agreement is a narrow arbitration clause, the question is whether Count X is on its face within the purview of the clause. Count X is a dispute on a matter regarding the Development Program, and the face of Count X does not indicate that the Independent Expert Decision process would be used to seek changes to any approved Development Plan. Thus Count X is on its face within the purview of section 14.5.1.

While we are referring only Count X to the expert, we agree with the motion court that the entire action should be stayed. The expert’s decision might affect the other causes of action. Referral will not cause undue delay, as the License Agreement requires the expert to make a decision within 90 days of appointment.

Plaintiff’s contention that CPLR 7601 is limited to quantitative matters such as valuation and appraisal is unavailing.

(Internal quotations and citations omitted).

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