N.Y. Court Says 3rd-Party Contractor Bound To Arbitration

RIVERHEAD, N.Y. - A New York court refused Jan. 22 to stay an arbitration between a hotel owner and a subcontractor over alleged mold and construction damage. Island ADC Inc. v. Hauppauge Hotels LLC, et al., No. 28450/2003 (N.Y. Sup. Ct., Suffolk Cty.).

Suffolk County Supreme Court Justice Mary M. Werner said warranty and indemnification provisions in a contract between a contractor and the sub-contractor 'clearly anticipate' that the hotel owner would be a direct third-party beneficiary of the contract.

Hauppauge Hotels brought the direct claim against Island ADC Inc. in an arbitration proceeding arising from construction of a Holiday …