Partnership Agreement's Arbitration Provision Governs Later Agreement to Sell Partnership Assets

On June 27, 2017, the First Department issued a decision in Matter of Capital Enterprises Co. v. Dworman, 2017 NY Slip Op. 05192, holding that a partnership agreement's arbitration provision governed a later agreement to sell partnership assets, explaining:

Since the alleged oral agreement to sell or transfer partnership assets attempts to modify several substantive provisions of petitioner's partnership agreement concerning the distribution of partnership assets, the broad arbitration provision of the partnership agreement controls the parties' dispute. The merits of the claims, such as the applicability of the statute of frauds, should be determined by the arbitrator.

(Internal citations omitted).