Grayson-Robinson Stores v. Iris Constr. Corp.

8 N.Y.2d 133, 202 N.Y.S.2d 303, 168 N.E.2d 377 (1960).

Dawson, p. 183

Facts: The defendant contracted with the plaintiff to build a store on some of the defendant’s property. The defendant became unable to get financing and asked the plaintiff for an increase in rent. The plaintiff refused and the case went to arbitration. The arbitrators ordered Iris to proceed. By statute, New York courts had the authority to enforce the decision of the arbitrators.

Issue: Should the courts enforce specific performance as ordered by the arbitrators?

Rule: A New York statute dictates that the courts will enforce arbitration agreements without considering their merits.

Analysis: Normally, taking on responsibility to enforce an order that is arguably impossible would be rejected by courts on pubic policy grounds. Here, the statute seems to trump the common law rule.

Conclusion: The Court of Appeals of New York affirmed a lower court’s order to the defendant to build the building.

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