## Facts

- Coudert Brothers was an international law firm with offices in the United States and abroad.
- Charles R. Stevens entered into a partnership agreement with Coudert Brothers.
- The partnership agreement included an arbitration provision calling for arbitration under the Rules of the American Arbitration Association (AAA).
- The arbitration clause also contained a special venue term for disputes involving foreign branch offices: when a foreign branch is involved and the New York principal office requests arbitration, the arbitration “shall take place in the city where the foreign branch has its principal office.”
- A dispute arose between Stevens and Coudert Brothers in which several foreign branch offices were involved.
- Coudert Brothers claimed that Stevens, among other things, wrongfully recruited Coudert attorneys to another firm.
- Coudert Brothers demanded arbitration before the AAA in New York City.
- Stevens objected and commenced a special proceeding in Supreme Court, New York County, seeking to stay the arbitration on the ground that Coudert’s New York demand did not match the foreign-branch venue language in the partnership agreement.
- The motion court denied the requested stay and dismissed the petition, allowing the arbitration to proceed.
- Stevens appealed to the Appellate Division, First Department.

## Issues

1. Whether Coudert Brothers failed to comply with the partnership agreement’s arbitration venue provision by demanding AAA arbitration in New York City when several foreign branch offices were involved in the dispute.
2. Whether the venue dispute, given the parties’ agreement to arbitrate under AAA rules and the absence of a clear contractual breach, should be decided by the court or referred to the AAA.

## Decision

- The Appellate Division, First Department unanimously affirmed the order and judgment, with costs, denying Stevens’s application to stay arbitration and dismissing the petition.
- The court reasoned that because several foreign branch offices were “involved,” the agreement did not identify a single city where “the” foreign branch had its principal office; therefore, it could not be said that Coudert violated the agreement by demanding arbitration in New York.
- With no clear violation of the foreign-branch exception to AAA arbitration, the court held that the venue issue was properly left to the AAA to resolve under the parties’ chosen arbitral rules and process.

## Legal Principles

- Arbitration agreements are enforced according to their terms, but a stay of arbitration is not warranted absent a clear showing that the demand violates the parties’ agreement.
- When parties agree to arbitrate under the AAA rules, courts should act with great caution before interfering with the arbitral process, especially on procedural threshold matters such as venue.
- Where contractual venue language becomes indeterminate in application (for example, when multiple foreign branches are involved and no single qualifying city is specified), a court may decline to treat a particular forum demand as noncompliance.
- In the absence of a clear contractual bar, disputes about the proper arbitration locale may be referred to the arbitral forum (here, the AAA) rather than resolved in court through a stay proceeding.

## Conclusion

In this special proceeding, a former Coudert partner sought to stop AAA arbitration in New York based on a foreign-branch venue clause in the partnership agreement, but the Appellate Division held that the involvement of multiple foreign branches made the clause non-specific as applied and, with no clear contractual violation, left the venue question to the AAA while affirming the denial of a stay.


In the Matter of Charles R. Stevens v. Coudert Brothers, 662 N.Y.S.2d 42 (1997)