B. Fraud Or Duress

• Jurisdiction: New York

B. Fraud or Duress

In addition to the public policy arguments, an arbitration clause can be attacked as would any contract clause. Consequently, an arbitration clause obtained through fraud or duress would be unenforceable.⁵⁰ Since an arbitration agreement is a contract, failure to comply with the terms of the agreement will preclude the nonconforming party from enforcing the agreement.⁵¹ For example, it is common for an arbitration agreement to require that a formal demand for arbitration be served on the other party. Failure to comply with that requirement can render the agreement unenforceable.⁵²

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Notes:

^[50] See Schreiber v. K-Sea Transp. Corp., 9 N.Y.3d 331, 849 N.Y.S.2d 194 (2007) (ordering a hearing to determine whether arbitration clause was obtained fraudulently). CPLR 7503(a) requires that "a valid agreement" to arbitrate the controversy was made. Alexander, McKinney's Practice Commentary, CPLR 7503 (Supp. 2001). See Ferrarella v. Godt, 131 A.D.3d 563, 15 N.Y.S.3d 180 (2d Dep't 2015) (noting that if the alleged fraud was part of a grand scheme that permeated the entire contract, including the arbitration provision, the arbitration provision should fall with the rest of the contract) (citing Weinrott v. Carp, 32 N.Y.2d 190, 197, 344 N.Y.S.2d 848 (1973)); Utica Mut. Ins. Co. v. Gulf Ins. Co., 306 A.D.2d 877, 762...