Silver v. Pilzer

Judgment, Supreme Court, New York County, entered May 26, 1977, dismissing the petition and directing the parties to proceed to arbitration, unanimously reversed, on the law, and the petition to stay arbitration is *681 granted, with $40 costs and disbursements of this appeal to appellant. Louis Silver and Paul Pilzer are the principal shareholders of Silver-Pilzer Co., Inc. In September, 1971 they entered into a shareholders agreement which outlined the rights and responsibilities related to capitalization and transfers of the stock of the corporation. The agreement also contained a clause which provided that: "Any and all disputes and controversies arising out of or in connection with this Agreement * * * shall be determined by arbitration in the City of New York”. Silver and Pilzer had a disagreement with regard to management of the corporation, and Pilzer served Silver with a demand for arbitration specifying the points of dispute. Silver moved to stay arbitration, which was denied by Special Term. We would reverse. The shareholders’ agreement deals with capitalization of the corporation and related matters, but does not contain provisions related to management of the corporation. The arbitration clause contained in it cannot therefore be invoked to compel arbitration of the management dispute outlined in the demand for arbitration. This court will not by implication or construction extend the scope of the agreement to arbitrate (Matter of Riverdale Fabrics Corp. [Tillinghast-Stiles Co.], 306 NY 288, 289 ), and we have therefore directed a stay of arbitration. Concur—Murphy, P. J., Lupiano, Birns and Lane, JJ.