Originally from Dispute Resolution Journal

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MEDICAL PARTNERSHIP — INAPPLICABILITY OF FEDERAL ARBITRATION — ORDER STAYING PROCEEDINGS PENDING ARBITRATION — COURT'S AUTHORITY — CPLR 2201 — DETERMINATION OF ARBITRABLE ISSUES — CONSPIRACY AND SLANDER

The court, in applying New York law, found that the practice of medicine by a partnership of physicians licensed by New York State did not meet the necessary prerequisites for applying the Federal Arbitration Act, although diversity jurisdiction existed as a result of plaintiffs Pennsylvania citizenship. In granting defendants' application for an order staying court proceedings pending the arbitration of certain issues, court held that the general authority to issue a stay contained in CPLR 2201 covered the situation where defendants served a formal demand for arbitration and where, in addition, their application for a stay would be equivalent of such a demand. The court stated further that the determination whether a particular issue is within the arbitration agreement is made, not by the arbitrators, but by the court itself. Ruling on the four issues raised by the plaintiff in his causes of action, the court held that the claims alleging a conspiracy to defraud and slander by making false statements are not "concerned" with the partnership contract and, consequently, are not arbitrable under the agreement.

Bashoff v. Lipman et al., — F. Supp.— (S.D.N.Y., No. 69 Civ. 2949, 1969).