A recent New York Law Journal story, “Danish Company Fights Arbitration of Attorney Fees with Boies Schiller,” reports that a Danish beverage company says it's not bound to arbitration to resolve its attorney fee dispute with Boies, Schiller & Flexner, and has asked for a permanent stay of arbitration in court papers filed in New York.

However, Boies Schiller, which claims the company, Scanomat, owes it $427,481 in unpaid fees, said in a September letter to the company's lawyer that the company ignored service of an arbitration demand and thus, "at a minimum, waived any objection they may have to proceeding in arbitration."

Manhattan Supreme Court Justice Kathryn Freed who is presiding over the petition, granted Scanomat a temporary restraining order staying arbitration that runs until a full hearing is held on the company's petition for a permanent stay, Matalon said.  The hearing is set for Dec. 13.

In an order to show cause, Scanomat argues that its March engagement letter with Boies Schiller "specifically excludes fee disputes from mandatory JAMS arbitration."

Scanomat's attorney, Joseph Lee Matalon of Matalon Shweky Elman in Manhattan, emphasized in the petition the phrase "other than" while quoting the engagement letter as stating that "[i]n the unlikely event that a dispute arises between the parties relating to any matter other than our fees in connection with the engagement, the parties agree that such dispute shall be finally settled by ... arbitration."

Matalon further contended that Boies Schiller, which is based in Manhattan, made erroneous statements in its July arbitration demand.  And he argued that in September, after telling Boies Schiller partner Nicholas Gravante Jr. that Scanomat objected to the arbitration, that the law firm issued him a letter that "no longer argued that an arbitration agreement exists" but made an "incorrect assertion" that Scanomat had waived its objection to proceeding in arbitration.

But in a letter attached as an exhibit to the petition, Boies Schiller attorney Marilyn Kunstler wrote to Matalon that his client's "failure to object" to the demand before that point "constitutes consent to arbitrate."

She also wrote that she understood a letter sent in September by Matalon to Boies Schiller to "mean that your clients do not object to proceeding in state court, and therefore if we agree to forego arbitration, your clients will consent to jurisdiction" either in California or New York.

But Matalon said Scanomat does not consent to jurisdiction in either court.

"My client didn't agree to arbitrate," Matalon said in an interview. "If there is a neutral decision maker handling the dispute, we prefer to have a judge decide it, with the benefit of appellate review."