D. Statute of Limitations

• Jurisdiction: New York

D. Statute of Limitations

Finally, an issue brought under a legally enforceable contract may be barred by the statute of limitations. CPLR 7502(b) and 7503 require the court to resolve whether the arbitration claim is barred by the relevant statute of limitations period. The period of limitations in arbitration is the same as the period that would govern if a litigation were brought on the same claim being arbitrated.⁵⁵ Service of a demand for arbitration or a notice of intention to arbitrate tolls the running of the statute.⁵⁶ The statutory defense can be raised by special application to the court or before the arbitrator.⁵⁷ However, if the statute is raised before the arbitrator, it is in the sole discretion of the arbitrator whether or not to apply the statute, and this decision generally will not be subject to court review.⁵⁸ The choice of law provision in an arbitration agreement that would otherwise be governed by the FAA must state that New York law governs both the agreement and its enforcement for New York's rule that statute of limitations issues are for the court to apply. Unless the agreement includes language specifying that its enforcement is governed by New York law, questions concerning the statute of limitations are for the arbitrator to decide.⁵⁹

PRACTICE GUIDE

An arbitration agreement that seeks to encompass non-arbitrable issues will be unenforceable as to those issues. Failure to follow the procedural requirements of the agreement may bar enforcement of the arbitration clause. Plaintiff's waiver of the right to arbitration by commencing a lawsuit does not bind defendant unless he or she affirmatively seeks judicial intervention as to the merits of the otherwise arbitrable issues. Defendant's remedy...