On September 16, 2024, Justice Cohen of the New York County Commercial Division issued a decision in SLG 810 Seventh Lessee LLC v. Tydel Holding Corp., 2024 NY Slip Op, 33238(U), holding that the scope of an arbitrator’s power is determined by the agreement to arbitrate, not the initial statement of claim, explaining:
Respondent has not satisfied its burden of demonstrating that the arbitration panel exceeded its power in allowing, hearing and adjudicating the Petitioner’s amended claims. Respondent argues that the amended claims were not the claims the panel was specifically appointed to determine in the arbitration, which were limited to the Demand for Arbitration, i.e. the original Statement of Claims. However, any limitation upon the power of the arbitrator must be set forth as part of the arbitration clause itself. If no such limitation exists, a broadly and generally phrased arbitration clause will be afforded the full import of its wording.
Here, as noted, the Sublease contains a broad mandatory arbitration clause, providing that “[a]ny dispute, controversy or disagreement arising out of this lease between the parties or their successors in interest . . . shall be submitted to arbitration.” There are no limitations or restrictions on the scope of the arbitrator’s authority included in the Sublease’s arbitration provision. While it is true that an arbitrator exceeds his or her authority by reaching issues not raised by the parties, an arbitrator does not exceed his or her power in permitting a party to amend its claim to raise a new dispute between the parties, which were also arbitrable under the agreement. Here, Respondent does not dispute that the Amended Claims for rent were within the scope of the Sublease’s arbitration provision. Rather, Respondent argues that the Panel’s decision to allow Petitioner to assert the Amended Claims deprived Tydel of its contractual right to select its own arbitrator and agree to the third arbitrator to adjudicate that new particular dispute. This argument is unavailing. While there are provisions for the selection of an arbitrator in the Sublease, there is nothing in those provisions that grants Tydel the right to select a new arbitrator for each discrete dispute subject to arbitration.
(Internal quotations and citations omitted).