New York CPLR 7503(b) - Interpretation

CPLR 7503(b) provides, inter alia, that a party "may apply to stay arbitration on the ground that a valid agreement to arbitrate was not made." The law is well settled that no party is bound "to arbitrate unless it has clearly consented to do so." (Matter of Chemoleum Corp. Continental Grain Co., 22 AD2d 865, 254 N.Y.S.2d 424.) The intention to arbitrate "must be clear and direct" (Matter of Marlene Inds. Corp. Carnac Textiles, 45 NY2d 327, 334, 380 N.E.2d 239, 408 N.Y.S.2d 410; Matter of Riverdale Fabrics Corp. Tillinghast-Styles Co., 306 NY 288, 118 N.E.2d 104). An agreement to arbitrate must be express, direct and unequivocal as to the issues or disputes to be submitted to arbitration. This principle is particularly applicable in the instance of a limited arbitration clause (Gangel v. DeGroot, 41 NY2d 840, 362 N.E.2d 249, 393 N.Y.S.2d 698; Shuffman v. Rudd Plastic Fabrics Corp., 64 AD2d 699, 407 N.Y.S.2d 565). Robert Stigwood Organization, Ltd. v. Atlantic Recording Corp., 83 AD2d 123, 126, 443 N.Y.S.2d 726 (1st Dept 1981). In Stigwood, the Appellate Division held that a stay of arbitration was properly granted where a limited arbitration clause in a contract governing royalties and distribution rates for phonograph records was equivocal and could be interpreted as applying only to disputes relating to "accounting procedures, methods of computation and payments" or as applicable to all disputes arising under a particular paragraph in the agreement, including the alleged breach of contract. (Id., at 126.)