The Business Divorce Law Report
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Arbitration agreements survive the termination of an underlying contract, unless the parties specifically terminate the arbitrate provision.
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In disputes involving closely held businesses, the arbitration agreement may be invoked even if the business is no longer in existence.
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Unless there is a specific agreement on the question of ‘arbitrability’ of a dispute, it is an issue for a court to decide, not an arbitrator.
We are often asked to prepare an amended and restated operating agreement or contract. Or, more often in my case, we are representing a party in a dispute between two parties over a second or third version of an agreement.
No one says a word about arbitration. Do we need to go back and determine whether any of the old agreements had an
arbitration provision? Is it enough that the second contract contains a standard integration clause that merges all prior negotiations and agreements into the final document? Probably not.
Survival of Arbitration Agreements in LLC Operating Agreements
Arbitration agreements do not just go away. They survive the termination of an agreement and may even survive when that agreement was terminated because the parties negotiated a new or different deal. If the parties want the agreement to arbitrate to end, they had better agree and put that decision in clear and unequivocal writing. Continue reading
Hekemian’s will established several trusts and contained an arbitration clause in the event of disputes. After one of his son’s sued to compel an accounting, the co-executors, son Peter Hekemian and attorney Edward Imperatore, sought to compel arbitration under a provision in his Last Will and Testament (referred to by the court as the LWT). The effort failed. The Appellate Division in an unreported decisions,