NY State Senate Bill 2025-S9788

Current Bill Status - In Senate Committee Judiciary Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Apr 06, 2026	referred to judiciary

2025-S9788 (ACTIVE) - Details

See Assembly Version of this Bill:: A3461
Current Committee:: Senate Judiciary
Law Section:: Civil Practice Law and Rules
Laws Affected:: Amd §7502, add §§7513-a, 7513-b & 7517, CPLR
Versions Introduced in 2023-2024 Legislative Session:: S8201, A6889

2025-S9788 (ACTIVE) - Summary

Amends provisions of law governing arbitration proceedings; specifies fees and expenses with regard to employment or consumer arbitration proceedings; directs certain sanctions on a party which breaches an arbitration agreement.

2025-S9788 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9788

SPONSOR: SEPULVEDA
 
TITLE OF BILL:

An act to amend the civil practice law and rules, in relation to arbi-
tration

 
SUMMARY OF PROVISIONS:

Section 1: amends CPLR 7502 to add subdivision 5 to read: (v) If there
are multiple parties seeking arbitration against the same party or
parties, the proceeding may be brought in any court and county where any
of the parties seeking arbitration resides or is doing business or where
the arbitration was held or is pending.

Section 2: The CPLR is amended by adding 3 new sections 7513a & 7513b
and 7517 to read:

7513-A. Fees and expenses of arbitration initiation (a)(1) In an employ-
ment or consumer arbitration that requires, either expressly or through
application of state or federal law or the rules of the arbitration
provider, the drafting party to pay certain fees and costs before the

arbitration can proceed, if the fees or costs to initiate an arbitration
proceeding are not paid within 30 days after the due date the drafting
party is in material breach of the arbitration agreement, is in default
of the arbitration, and waives its right to compel arbitration.

(2) After an employee or consumer meets the filing requirements neces-
sary to initiate an arbitration, the arbitration provider shall imme-
diately provide an invoice for any fees and costs required before the
arbitration can proceed to all of the parties to the arbitration. The
invoice shall be provided in its entirety, shall state the full amount
owed and the date that payment is due, and shall be sent to all parties
by the same means on the same day. To avoid delay, absent an express
provision, in the arbitration agreement stating the number of days in
which the parties to the arbitration must pay any required fees or
costs, the arbitration provider shall issue all invoices to the parties
as due upon receipt.

(b) If the drafting party materially breaches the arbitration agreement
and is in default under subdivision (a), the employee or consumer may do
either of the following:

(1) Withdraw the claim from arbitration and proceed in a court of appro-
priate jurisdiction.

(2) Compel arbitration in which the drafting party shall pay reasonable
attorney's fees and costs related to the arbitration.

(c) If the employee or consumer withdraws the claim from arbitration and
proceeds with an action in a court of appropriate jurisdiction under
paragraph (1) of subdivision (b), the statute of limitations with regard
to all claims brought or that relate back to any claim brought in arbi-
tration shall be tolled as of the date of the first filing of a claim in
a court, arbitration forum, or other dispute resolution forum.

(d) If the employee or consumer proceeds with an action in a court of
appropriate jurisdiction, the court shall impose sanctions on the draft-
ing party in accordance with Section TKTK. 7513-B. Fees and expenses of
arbitration continuance

(a) (1) In an employment or consumer arbitration that requires, either
expressly or through application of state or federal law or the rules of
the arbitration provider, that the drafting party pay certain fees and
costs during the pendency of an arbitration proceeding, if the fees or
costs required to continue the arbitration proceeding are not paid with-
in 30 days after the due date, the drafting party is in material breach
of the arbitration agreement, is in default of the arbitration, and
waives its right to compel the employee or consumer to proceed with that
arbitration as a result of the material breach.  This excludes arbi-
tration agreements included in the terms of a collective bargaining
agreement.

(2) The arbitration provider shall provide an invoice for any fees and
costs required for the arbitration proceeding to continue to all of the
parties to the arbitration. The invoice shall be provided in its entire-
ty, shall state the full amount owed and the date that payment is due,
and shall be sent to all parties by the same means on the same day. To
avoid delay, absent an express provision in the arbitration agreement
stating the number of days in which the parties to the arbitration must
pay any required fees or costs, the arbitration provider shall issue all
invoices to the parties as due upon receipt. Any extension of time for
the due date shall be agreed upon by all parties.

(b) If the drafting party materially breaches the arbitration agreement
and is in default under subdivision (a), the employee or consumer may
unilaterally elect to do any of the following:

(1) Withdraw the claim from arbitration and proceed in a court of appro-
priate jurisdiction. If the employee or consumer withdraws the claim
from arbitration and proceeds with an action in a court of appropriate
jurisdiction, the statute of limitations with regard to all claims
brought or that relate back to any claim brought in arbitration shall be
tolled as of the date of the first filing of a claim in any court, arbi-
tration forum, or other dispute resolution forum.

(2) Continue the arbitration proceeding, if the arbitration provider
agrees to continue administering the proceeding, notwithstanding the
drafting party's failure to pay fees or costs. The neutral arbitrator or
arbitration provider may institute a collection action at the conclusion
of the arbitration proceeding against the drafting party that is in
default of the arbitration for payment of all fees associated with the
employment or consumer arbitration proceeding, including the cost of
administering any proceedings after the default.

(3) Petition the court for an order compelling the drafting party to pay
all arbitration fees that the drafting party is obligated to pay under
the arbitration agreement or the rules of the arbitration provider.

(4) Pay the drafting party's fees and proceed with the arbitration
proceeding. As part of the award, the employee or consumer shall recover
all arbitration fees paid on behalf of the drafting party without regard
to any findings on the merits in the underlying arbitration.



(c) If the employee or consumer withdraws the claim. from arbitration
and proceeds in a court of appropriate jurisdiction pursuant to para-
graph (1) of subdivision (b), both of the following apply:

(1) The employee or consumer may bring a motion, or a separate action,
to recover all attorney's fees and all costs associated with the aban-
doned arbitration proceeding. The recovery of arbitration fees, inter-
est, and related attorney's fees shall be without regard to any findings
on the merits in the underlying action or arbitration.

(2) The court shall impose sanctions on the drafting party in accordance
with this chapter.

(d) If the employee or consumer continues in arbitration pursuant to
paragraphs (2) through (4) of subdivision (b), inclusive, the arbitrator
shall impose appropriate sanctions on the drafting party, including
monetary sanctions, issue sanctions, evidence sanctions, or terminating
sanctions. 7517. Breach of arbitration agreement

(a) The court shall impose a monetary sanction against a drafting party
that materially breaches an arbitration agreement, by ordering the
drafting party to pay the reasonable expenses, including attorney's fees
and costs, incurred by the employee or consumer as a result of the mate-
rial breach.

(b) In addition to the monetary sanction described in subdivision (a),
the court may order any of the following sanctions against a drafting
party that materially breaches an arbitration agreement, unless the
court finds that the one subject to the sanction acted with substantial
justification or that other circumstances make the imposition of the
sanction unjust.

(1) An evidence sanction by an order prohibiting the drafting party from
conducting discovery in the civil action.

(2) A terminating sanction by one of the following orders:

(A) An order striking out the pleadings or parts of the pleadings of the
drafting party.

(B) An order rendering a judgment by default against the drafting party.

(3) A contempt sanction by an order treating the drafting party as in
contempt of court.

Section 3 sets the act to take effect immediately.

 
JUSTIFICATION:

This bill would make it mandatory for companies to pay their fair share
of arbitration fees. Arbitration is stalled when companies with mandato-
ry arbitration clauses do not pay the fees necessary to move forward.
This bill will penalize companies who default on arbitration filing
fees. This bill is necessary to protect consumers.

 
LEGISLATIVE HISTORY:

S. 3879 of 2025 (Hoylman-Sigal): Passed Senate
S. 8201-A of 2024 (Hoylman-Sigal): Died in Rules

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2025-S9788 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9788
 
                             I N  S E N A T E
 
                               April 6, 2026
                                ___________
 
 Introduced by Sen. SEPULVEDA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
 AN  ACT  to amend the civil practice law and rules, in relation to arbi-
   tration
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  Subdivision (a) of section 7502 of the civil practice law
 and rules is amended by adding a new paragraph (v) to read as follows:
   (V) IF THERE ARE MULTIPLE PARTIES SEEKING ARBITRATION AGAINST THE SAME
 PARTY OR PARTIES, THE PROCEEDING MAY BE BROUGHT IN ANY COURT AND  COUNTY
 WHERE  ANY  OF THE PARTIES SEEKING ARBITRATION RESIDES OR IS DOING BUSI-
 NESS OR WHERE THE ARBITRATION WAS HELD OR IS PENDING.
   § 2. The civil practice law and rules is amended by adding  three  new
 sections 7513-a, 7513-b and 7517 to read as follows:
   §  7513-A.  FEES AND EXPENSES OF ARBITRATION INITIATION. (A) (I) IN AN
 EMPLOYMENT OR CONSUMER  ARBITRATION,  EXCEPT  AN  ARBITRATION  AGREEMENT
 INCLUDED  IN  THE  TERMS  OF  A  COLLECTIVE  BARGAINING  AGREEMENT, THAT
 REQUIRES, EITHER EXPRESSLY OR THROUGH APPLICATION OF  STATE  OR  FEDERAL
 LAW  OR  THE  RULES OF THE ARBITRATION PROVIDER, THAT THE DRAFTING PARTY
 SHALL PAY CERTAIN FEES AND COSTS BEFORE THE ARBITRATION CAN PROCEED,  IF
 THE  FEES  OR  COSTS  TO INITIATE AN ARBITRATION PROCEEDING ARE NOT PAID
 WITHIN THIRTY DAYS AFTER THE DUE DATE, THE DRAFTING PARTY IS IN MATERIAL
 BREACH OF THE ARBITRATION AGREEMENT, IS IN DEFAULT OF  THE  ARBITRATION,
 AND WAIVES ITS RIGHT TO COMPEL ARBITRATION.
   (II)  AFTER  AN  EMPLOYEE  OR  CONSUMER  MEETS THE FILING REQUIREMENTS
 NECESSARY TO INITIATE AN ARBITRATION,  THE  ARBITRATION  PROVIDER  SHALL
 IMMEDIATELY  PROVIDE  AN  INVOICE FOR ANY FEES AND COSTS REQUIRED BEFORE
 THE ARBITRATION CAN PROCEED TO ALL OF THE PARTIES  TO  THE  ARBITRATION.
 THE  INVOICE  SHALL  BE  PROVIDED  IN ITS ENTIRETY, SHALL STATE THE FULL
 AMOUNT OWED AND THE DATE THAT PAYMENT IS DUE, AND SHALL BE SENT  TO  ALL
 PARTIES  BY  THE  SAME  MEANS ON THE SAME DAY. TO AVOID DELAY, ABSENT AN
 EXPRESS PROVISION IN THE ARBITRATION AGREEMENT  STATING  THE  NUMBER  OF
 DAYS  IN WHICH THE PARTIES TO THE ARBITRATION MUST PAY ANY REQUIRED FEES
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05048-04-6

 S. 9788                             2

 OR COSTS, THE ARBITRATION PROVIDER  SHALL  ISSUE  ALL  INVOICES  TO  THE
 PARTIES AS DUE UPON RECEIPT.
   (B)  IF  THE DRAFTING PARTY MATERIALLY BREACHES THE ARBITRATION AGREE-
 MENT AND IS IN DEFAULT  UNDER  SUBDIVISION  (A)  OF  THIS  SECTION,  THE
 EMPLOYEE OR CONSUMER MAY DO EITHER OF THE FOLLOWING:
   (I)  WITHDRAW  THE  CLAIM  FROM  ARBITRATION AND PROCEED IN A COURT OF
 APPROPRIATE JURISDICTION; OR
   (II) COMPEL ARBITRATION IN WHICH THE DRAFTING PARTY SHALL PAY  REASON-
 ABLE ATTORNEYS' FEES AND COSTS RELATED TO THE ARBITRATION.
   (C)  IF  THE EMPLOYEE OR CONSUMER WITHDRAWS THE CLAIM FROM ARBITRATION
 AND PROCEEDS WITH AN ACTION IN A COURT OF COMPETENT  JURISDICTION  UNDER
 PARAGRAPH (I) OF SUBDIVISION (B) OF THIS SECTION, THE STATUTE OF LIMITA-
 TIONS WITH REGARD TO ALL CLAIMS BROUGHT OR THAT RELATE BACK TO ANY CLAIM
 BROUGHT  IN  ARBITRATION  SHALL  BE  TOLLED  AS OF THE DATE OF THE FIRST
 FILING OF A CLAIM IN A COURT, ARBITRATION FORUM, OR OTHER DISPUTE RESOL-
 UTION FORUM.
   (D) IF THE EMPLOYEE OR CONSUMER PROCEEDS WITH AN ACTION IN A COURT  OF
 COMPETENT JURISDICTION, THE COURT SHALL IMPOSE SANCTIONS ON THE DRAFTING
 PARTY IN ACCORDANCE WITH THIS CHAPTER.
   §  7513-B. FEES AND EXPENSES OF ARBITRATION CONTINUANCE. (A) (I) IN AN
 EMPLOYMENT OR CONSUMER  ARBITRATION,  EXCEPT  AN  ARBITRATION  AGREEMENT
 INCLUDED  IN  THE  TERMS  OF  A  COLLECTIVE  BARGAINING  AGREEMENT, THAT
 REQUIRES, EITHER EXPRESSLY OR THROUGH APPLICATION OF  STATE  OR  FEDERAL
 LAW  OR  THE  RULES OF THE ARBITRATION PROVIDER, THAT THE DRAFTING PARTY
 SHALL PAY CERTAIN FEES AND COSTS DURING THE PENDENCY OF  AN  ARBITRATION
 PROCEEDING,  IF  THE  FEES OR COSTS REQUIRED TO CONTINUE THE ARBITRATION
 PROCEEDING ARE NOT PAID WITHIN THIRTY  DAYS  AFTER  THE  DUE  DATE,  THE
 DRAFTING PARTY IS IN MATERIAL BREACH OF THE ARBITRATION AGREEMENT, IS IN
 DEFAULT  OF THE ARBITRATION, AND WAIVES ITS RIGHT TO COMPEL THE EMPLOYEE
 OR CONSUMER TO PROCEED WITH THAT ARBITRATION AS A RESULT OF THE MATERIAL
 BREACH.
   (II) THE ARBITRATION PROVIDER SHALL PROVIDE AN INVOICE  FOR  ANY  FEES
 AND  COSTS REQUIRED FOR THE ARBITRATION PROCEEDING TO CONTINUE TO ALL OF
 THE PARTIES TO THE ARBITRATION. THE INVOICE SHALL  BE  PROVIDED  IN  ITS
 ENTIRETY,  SHALL STATE THE FULL AMOUNT OWED AND THE DATE THAT PAYMENT IS
 DUE, AND SHALL BE SENT TO ALL PARTIES BY THE SAME MEANS ON THE SAME DAY.
 TO AVOID DELAY, ABSENT AN EXPRESS PROVISION IN THE ARBITRATION AGREEMENT
 STATING THE NUMBER OF DAYS IN WHICH THE PARTIES TO THE ARBITRATION  MUST
 PAY ANY REQUIRED FEES OR COSTS, THE ARBITRATION PROVIDER SHALL ISSUE ALL
 INVOICES  TO  THE PARTIES AS DUE UPON RECEIPT. ANY EXTENSION OF TIME FOR
 THE DUE DATE SHALL BE AGREED UPON BY ALL PARTIES.
   (B) IF THE DRAFTING PARTY MATERIALLY BREACHES THE  ARBITRATION  AGREE-
 MENT  AND  IS  IN  DEFAULT  UNDER  SUBDIVISION  (A) OF THIS SECTION, THE
 EMPLOYEE OR CONSUMER MAY UNILATERALLY ELECT TO DO ANY OF THE FOLLOWING:
   (I) WITHDRAW THE CLAIM FROM ARBITRATION AND  PROCEED  IN  A  COURT  OF
 APPROPRIATE  JURISDICTION.  IF  THE  EMPLOYEE  OR CONSUMER WITHDRAWS THE
 CLAIM FROM ARBITRATION AND PROCEEDS WITH AN ACTION IN A COURT OF  APPRO-
 PRIATE  JURISDICTION,  THE  STATUTE  OF  LIMITATIONS  WITH REGARD TO ALL
 CLAIMS BROUGHT OR THAT RELATE BACK TO ANY CLAIM BROUGHT  IN  ARBITRATION
 SHALL  BE  TOLLED  AS  OF THE DATE OF THE FIRST FILING OF A CLAIM IN ANY
 COURT, ARBITRATION FORUM, OR OTHER DISPUTE RESOLUTION FORUM;
   (II) CONTINUE THE ARBITRATION PROCEEDING, IF THE ARBITRATION  PROVIDER
 AGREES  TO  CONTINUE  ADMINISTERING  THE PROCEEDING, NOTWITHSTANDING THE
 DRAFTING PARTY'S FAILURE TO PAY FEES OR COSTS. THE NEUTRAL ARBITRATOR OR
 ARBITRATION PROVIDER MAY INSTITUTE A COLLECTION ACTION AT THE CONCLUSION
 OF THE ARBITRATION PROCEEDING AGAINST THE  DRAFTING  PARTY  THAT  IS  IN
 S. 9788                             3
 
 DEFAULT  OF  THE ARBITRATION FOR PAYMENT OF ALL FEES ASSOCIATED WITH THE
 EMPLOYMENT OR CONSUMER ARBITRATION PROCEEDING,  INCLUDING  THE  COST  OF
 ADMINISTERING ANY PROCEEDINGS AFTER THE DEFAULT;
   (III) PETITION THE COURT FOR AN ORDER COMPELLING THE DRAFTING PARTY TO
 PAY  ALL  ARBITRATION  FEES  THAT THE DRAFTING PARTY IS OBLIGATED TO PAY
 UNDER THE ARBITRATION AGREEMENT OR THE RULES OF THE ARBITRATION  PROVID-
 ER; OR
   (IV)  PAY  THE  DRAFTING PARTY'S FEES AND PROCEED WITH THE ARBITRATION
 PROCEEDING. AS PART OF THE AWARD, THE EMPLOYEE OR CONSUMER SHALL RECOVER
 ALL ARBITRATION FEES PAID ON BEHALF OF THE DRAFTING PARTY WITHOUT REGARD
 TO ANY FINDINGS ON THE MERITS IN THE UNDERLYING ARBITRATION.
   (C) IF THE EMPLOYEE OR CONSUMER WITHDRAWS THE CLAIM  FROM  ARBITRATION
 AND  PROCEEDS IN A COURT OF COMPETENT JURISDICTION PURSUANT TO PARAGRAPH
 (I) OF SUBDIVISION (B) OF THIS SECTION,  BOTH  OF  THE  FOLLOWING  SHALL
 APPLY:
   (I) THE EMPLOYEE OR CONSUMER MAY BRING A MOTION, OR A SEPARATE ACTION,
 TO  RECOVER  ALL ATTORNEYS' FEES AND ALL COSTS ASSOCIATED WITH THE ABAN-
 DONED ARBITRATION PROCEEDING. THE RECOVERY OF ARBITRATION  FEES,  INTER-
 EST, AND RELATED ATTORNEYS' FEES SHALL BE WITHOUT REGARD TO ANY FINDINGS
 ON THE MERITS IN THE UNDERLYING ACTION OR ARBITRATION; AND
   (II) THE COURT SHALL IMPOSE SANCTIONS ON THE DRAFTING PARTY IN ACCORD-
 ANCE WITH THIS CHAPTER.
   (D)  IF  THE EMPLOYEE OR CONSUMER CONTINUES IN ARBITRATION PURSUANT TO
 PARAGRAPH (II), (III) OR (IV) OF SUBDIVISION (B) OF  THIS  SECTION,  THE
 ARBITRATOR  SHALL  IMPOSE  APPROPRIATE  SANCTIONS ON THE DRAFTING PARTY,
 INCLUDING MONETARY SANCTIONS, ISSUE SANCTIONS,  EVIDENCE  SANCTIONS,  OR
 TERMINATING SANCTIONS.
   §  7517.  BREACH  OF  ARBITRATION  AGREEMENT; SANCTIONS. (A) THE COURT
 SHALL IMPOSE A MONETARY SANCTION AGAINST A  DRAFTING  PARTY  THAT  MATE-
 RIALLY  BREACHES  AN ARBITRATION AGREEMENT, EXCEPT AN ARBITRATION AGREE-
 MENT INCLUDED IN THE TERMS OF  A  COLLECTIVE  BARGAINING  AGREEMENT,  BY
 ORDERING  THE  DRAFTING  PARTY TO PAY THE REASONABLE EXPENSES, INCLUDING
 ATTORNEYS' FEES AND COSTS, INCURRED BY THE EMPLOYEE  OR  CONSUMER  AS  A
 RESULT OF THE MATERIAL BREACH.
   (B)  IN ADDITION TO THE MONETARY SANCTION DESCRIBED IN SUBDIVISION (A)
 OF THIS SECTION, THE COURT MAY ORDER  ANY  OF  THE  FOLLOWING  SANCTIONS
 AGAINST  A DRAFTING PARTY THAT MATERIALLY BREACHES AN ARBITRATION AGREE-
 MENT, UNLESS THE COURT FINDS THAT THE  PARTY  SUBJECT  TO  THE  SANCTION
 ACTED  WITH  SUBSTANTIAL  JUSTIFICATION OR THAT OTHER CIRCUMSTANCES MAKE
 THE IMPOSITION OF THE SANCTION UNJUST:
   (I) AN EVIDENCE SANCTION BY AN ORDER PROHIBITING  THE  DRAFTING  PARTY
 FROM CONDUCTING DISCOVERY IN THE CIVIL ACTION;
   (II) A TERMINATING SANCTION BY ONE OF THE FOLLOWING ORDERS:
   (1)  AN  ORDER STRIKING OUT THE PLEADINGS OR PARTS OF THE PLEADINGS OF
 THE DRAFTING PARTY; OR
   (2) AN ORDER RENDERING A JUDGMENT  BY  DEFAULT  AGAINST  THE  DRAFTING
 PARTY; OR
   (III)  A  CONTEMPT SANCTION BY AN ORDER TREATING THE DRAFTING PARTY AS
 IN CONTEMPT OF COURT.
   § 3. This act shall take effect immediately.

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Senate Bill S9788

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Current Bill Status - In Senate Committee Judiciary Committee

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2025-S9788 (ACTIVE) - Details

2025-S9788 (ACTIVE) - Summary

2025-S9788 (ACTIVE) - Sponsor Memo

2025-S9788 (ACTIVE) - Bill Text download pdf

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Sponsored By

Luis R. Sepúlveda

Current Bill Status - In Senate Committee Judiciary Committee

Actions

2025-S9788 (ACTIVE) - Details

2025-S9788 (ACTIVE) - Summary

2025-S9788 (ACTIVE) - Sponsor Memo

2025-S9788 (ACTIVE) - Bill Text download pdf

Comments