The Commercial Division of the New York State Supreme Court has
issued Rule 9, which governs a new accelerated adjudication process
between parties who choose it in a contract. The Commercial
Division is available for disputes that are commercial in nature
and in which the amount disputed is greater than US$500,000.
Parties drafting contracts contemplating New York as the potential
forum for significant commercial disputes may consider accelerated
adjudication of disputes in the Commercial Division of New York
state trial courts.1
Rule 9 provides for all pre-trial proceedings (including
discovery, pre-trial motions and mandatory mediation) to be
completed, and the parties to be ready for trial, within nine
months from the date of filing of a Request for Judicial
Intervention (a document that may be filed early in a case to
request a preliminary conference with a judge). Rule 9 is intended
to streamline litigation and reduce costs by limiting discovery and
waiving certain substantive rights.
Under Rule 9, document production is limited to documents
relevant to a claim or defense and is restricted by time frame,
subject matter and person or entity to which the request pertains.
Electronic discovery is limited to only those custodians
"whose electronic documents may reasonably be expected to
contain evidence that is material to the dispute." Other
discovery is limited to a maximum of seven one-day depositions,
seven interrogatories, and five requests to admit per side. Rule 9
also allows for the potential of cost-shifting with respect to
The parties to an accelerated action pursuant to Rule 9 agree to
waive the following:
any objections based on lack of personal jurisdiction or forum
the right to a jury trial;
the right to recover punitive or exemplary damages; and
the right to interlocutory appeal (i.e., the appeal of
non-final orders, such as certain motions to dismiss and motions
for summary judgment).
Rule 9 suggests the following contract language for parties who
wish to take advantage of its process:
Subject to the requirements for a case to be heard in the
Commercial Division, the parties agree to submit to the exclusive
jurisdiction of the Commercial Division, New York State Supreme
Court, and to the application of the Court's accelerated
procedures, in connection with any dispute, claim or controversy
arising out of or relating to this agreement, or the breach,
termination, enforcement or validity thereof.
Rule 9 allows for alternative language as long as the provision
makes clear that the parties intend for disputes to be governed by
it. Further, parties to a dispute can agree to Rule 9 proceedings
even if the contract at issue does not contemplate its use.
1 Pursuant to New York General Obligations Law
§§ 5-1401-1 and 5-1401-2, parties may include a New York
choice of law provision in any contract arising out of a
transaction of at least US$250,000 in value, and may select New
York as the forum for disputes exceeding US$1,000,000, regardless
of whether the parties have any contacts with New York.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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