Mere Guarantor Bound by Agreement's Arbitration Clause

On November 10, 2020, the First Department issued a decision in Matter of Finkelman v. Hagshama Brooklyn 14 Park Slope Platinum, LLC, 2020 NY Slip Op. 06387, holding that a mere guarantor was bound by an agreement's arbitration clause, explaining:

Petitioner signed a joint venture agreement containing an arbitration clause in his representative capacity only but also signed a personal guarantee of performance, which was annexed as an exhibit to the joint venture agreement. While the mere guarantee of performance does not constitute an assumption by the guarantor of the principal's agreement to submit to arbitration. the motion court properly concluded that the clear language of the personal guarantee in this case unambiguously expresses petitioner's intent to be bound by the personal obligations of the joint venture agreement as if he were a direct party to that agreement, thereby clearly and unequivocally adopting the agreement, including its arbitration provision.

(Internal citations omitted).

Commercial litigation involves more than courts. Disputes often are--by agreement--decided by private arbitrators. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding a dispute that is subject to an arbitration agreement.