Expedited Arbitration Upheld on New York Prompt Pay Law

The New York prompt pay act (PPA) calls for expedited arbitration. A federal court has confirmed that the parties must proceed to arbitration under the PPA even when their contract does not call for arbitration. The federal court, referring to the NY case law on this issue as “admittedly slim,” held that arbitration under the PPA applies to both disputed and undisputed invoices.

One party also argued that the PPA left some room for doubt as to whether it was compelled to participate in arbitration. But the court briefly disposed of the point: “That argument is meritless. The overall context of the provision clearly contemplates mandatory arbitration, and it is flatly implausible that the statute allows a silent veto to the party opposing arbitration.” Thus, arbitration is to proceed on the payment dispute.

The case is Maple Drake Austell Owner, LLC v. D.F. Pray, Inc. (paywall), 2019 U.S. Dist. LEXIS 112799 (S.D.N.Y., July 8, 2019).

 

About Stan Martin

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Stan Martin holds a law degree and an undergraduate degree in architecture. He has been involved with the construction industry for more than 45 years, working in construction prior to law school and beginning his construction law practice. Over the course of his career, he has served on boards and committees for organizations including the Associated General Contractors of Massachusetts, the Boston Society of Architects, and the Massachusetts Building Congress.

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