Key Points

  • The Appellate Division, First Department, unanimously reversed, with costs, a Supreme Court order that had continued a May 16, 2026 temporary restraining order halting an arbitration, and dissolved the restraining order.
  • Peers Business Inc. could not invoke CPLR 7503(b) because it had participated in the arbitration by attending an AAA administrative conference, appointing its arbitrator and filing an answer.
  • Participating under protest did not help Peers, because under Matter of Commerce & Indus. Ins. Co. v Nester a party must seek a stay even if it expects summary denial.
  • A federal court told Peers in December 2025 that it had to move for a stay, but Peers did not do so until April 2026, and its objection to the removal did not prevent it from asking the federal court for a stay.
  • Because Peers and its predecessor signed the shareholder agreements containing the arbitration clauses, its reliance on Matter of IMG Publ. [Viesti] was misplaced; that 1991 decision also predates Commerce.

A New York appeals court on Thursday dissolved a restraining order in a dispute over an arbitration between Peers Business Inc. and Navios South American Logistics Inc. The court ruled that Peers lost the right to ask a judge to halt the arbitration once it had taken part in it.

A five-justice panel of the Appellate Division, First Department, unanimously reversed an order by Justice Nancy M. Bannon of State Supreme Court in New York County. Her order, entered on or about July 1, 2026, had continued a temporary restraining order dated May 16, 2026, "until further order of the court." The panel reversed "on the law," with costs. The decision is unsigned.

The ruling applies a rule from a 1997 Court of Appeals decision: a party that objects to arbitrating must go to court, even when it expects the court to turn it away.

The dispute turned on CPLR 7503(b). Peers, the petitioner, invoked that provision to stop an arbitration before the American Arbitration Association. The arbitration arises under clauses in shareholder agreements, according to the decision.

The panel held that Peers "cannot avail itself of CPLR 7503(b)" because it had already participated in three ways. It took part in an administrative conference with the American Arbitration Association, appointed its arbitrator and filed an answer, the court wrote. For that rule, the panel cited two of its own decisions: Matter of Flintlock Construction Services LLC v. Weiss, from 2014, and Matter of JJF Associates LLC v. Joyce, from 2009. The Court of Appeals later dismissed an appeal in Flintlock and denied leave to appeal in JJF.

The panel then addressed whether Peers could avoid that result because it had taken those steps under protest. It held that a protest made no difference. Even if Peers participated under protest, the court wrote, "it still could not avoid arbitration because a party must seek judicial relief" regardless.

That obligation applies, the panel wrote, quoting the Court of Appeals, "even if it believes that its request for such an interim stay will result in summary denial." The language comes from Matter of Commerce & Industry Insurance Co. v. Nester, the Court of Appeals' 1997 decision.

The decision's timeline also recounts Peers' dealings with a federal court. Peers wrote to a federal court in November 2025. In December 2025, according to the decision, the federal court advised Peers "that it was required to move to stay the arbitration."

Peers did not make that motion for months. "Yet, Peers Business did not do so until April 2026, by which time it had already participated in the arbitration proceedings," the panel wrote. The restraining order that the appeals court dissolved was dated the following month.

Peers had also maintained that Navios and the other respondents improperly removed the case to federal court, the decision notes. The panel held that this objection did not excuse the delay. Peers' belief about the removal "did not prevent it from asking that court to stay the arbitration in its November 2025 and April 2026 letters," the court wrote.

The panel rejected one more argument, in which Peers relied on Matter of IMG Publications (Viesti), a First Department decision from 1991. The panel wrote that Peers and its predecessor "were signatories to the shareholder agreements containing the arbitration clauses." For that reason, the court held, Peers' reliance on the 1991 ruling was "misplaced."

The panel gave a second reason for setting IMG Publications aside. That decision, it wrote, "predates the Court of Appeals' decision in Commerce," the 1997 ruling that requires a party to seek a stay even when it expects to lose.

Having resolved the appeal on those grounds, the panel said it "need not reach the parties' remaining arguments." The decision does not describe what those arguments were.

The panel consisted of Presiding Justice Renwick and Justices Kennedy, Friedman, González and Chan, as listed in the decision.

Lawyers for Navios and the other appellants included Jonathan D. Polkes of White & Case LLP. Peers Business was represented by Philip M. Smith of Guzov, LLC.

The decision reverses Justice Bannon's order outright and dissolves the restraining order; it does not send the stay question back to the trial court for further findings. The case is Matter of Peers Business Inc. v. Navios South American Logistics Inc., Appeal No. 7398, Case No. 2026-04166, arising from Supreme Court Index No. 652605/25. The slip opinion states that the decision is uncorrected and subject to revision before publication in the Official Reports.