Opinion
July 11, 1961
In a proceeding under article 84 of the Civil Practice Act (§ 1448 et seq.) to compel arbitration between corporate stockholders, petitioner appeals from an order of the Supreme Court, Queens County, dated October 31, 1960, and entered November 1, 1960, which denied his renewed application to direct respondent to proceed to arbitrate certain disputes that have arisen between the parties, pursuant to arbitration provisions in the stockholders' agreement entered into between the corporation and its stockholders. The application was denied on the ground that there were no existing bona fide disputes between the parties referable to arbitration. Order modified by striking out the decretal paragraph denying petitioner's renewed application to compel arbitration; and by substituting therefor two paragraphs: (1) directing that arbitration between the parties shall be had on the issue of respondent's refusal to permit petitioner access to the books and records of the 107-48 Queens Boulevard Corporation; and (2) directing that such arbitration shall proceed in the manner prescribed in the stockholders' agreement annexed to the petition. As so modified, the order is affirmed, with $10 costs and disbursements to petitioner. In our opinion, the above issue constitutes a bona fide dispute which relates to the conduct of the corporate business and is embraced within the stockholders' agreement to arbitrate. "While it is true that whether or not a bona fide dispute exists is for the court ( Matter of Wenger Co. v. Propper Silk Hosiery Mills, 239 N.Y. 199), it is equally true that in a proceeding to compel arbitration the question for the court to pass upon is whether the written contract provides for arbitration and, if so, whether there was a failure to proceed with the obligation to arbitrate ( Matter of Kahn [ Nat. City Bank], 284 N.Y. 515). The question of performance goes to the merits and is a matter for the arbitrators whenever it appears that the parties have so consented ( Matter of Lipman [ Haeuser Shellac Co.], 289 N.Y. 76 * * *)" ( Matter of Potoker [ Brooklyn Eagle], 2 N.Y.2d 553 -559). We are also of the opinion that petitioner's attorney, by reason of that relationship standing alone, is not disqualified from being designated to serve as petitioner's arbitrator ( Matter of Lipschutz [ Gutwirth], 304 N.Y. 58, 63-64). Nolan, P.J., Beldock, Ughetta, Christ and Brennan, JJ., concur. [ 27 Misc.2d 122.]