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Arbitration and Pre-Judgment Enforcement Devices

Arbitration was originally conceived as a way for two parties to agree to take their disputes out of the Court system and place them in the hands of an arbitrator. Traditionally, many of the benefits of litigation were not available to parties choosing to arbitrate their disputes. However, New York's Civil Practice Rules and Law ("CPLR") has recently begun to expand to provide those engaged in arbitration with limited remedies before parties begin the arbitration process.

Provisional remedies, such as those offered under CPLR 7502(c), allow those engaged in arbitration to utilize traditional litigation remedies to maintain the status quo before arbitration has begun. These remedies include attachment and preliminary injunctions. An order of attachment may be granted in any action where the plaintiff has demanded and would be entitled to a money judgment against one or more defendants if successful in the arbitration. A preliminary injunction may be granted where it appears that the defendant threatens or is about to do an act in violation of the plaintiff's rights with respect to the subject of the action, and if committed or continued during the pendency of the action, would produce injury to the plaintiff. These remedies help ensure that assets are preserved to satisfy a potential award as parties engage in arbitration.  

As arbitration has become a more prevalent means of alternate dispute resolution, successful parties have looked to the Court system to further broaden the remedies available for enforcing an arbitration award. CPLR 5229 allows any court, upon the motion of the prevailing party in litigation, to order an examination of the adverse party and order it restrained from divesting its assets before the final judgment is entered with the court. This section of the CPLR is currently only available to litigants and does not apply to those who have opted to arbitrate their disputes. However, many proponents of arbitration are now seeking to expand the statute to arbitration awards, as it would allow those parties who have obtained a favorable award to obtain a restraining order from the Court to bar the divestiture of assets before the award has been recognized as a Judgment by the Court.

For more information regarding the expanding scope of pre-judgment remedies available under New York law, please feel free to contact us at info@chaloslaw.com

Chalos & Co, P.C.
International Law Firm
www.chaloslaw.com
Email: info@chaloslaw.com

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