New York appellate court holds that prior arbitration award precluded claim by party’s affiliate under doctrine of res judicata:
Non-party to arbitration was precluded from bringing breach of contract claim when the same issue was or could have been adjudicated by a related party in a prior arbitration.
The doctrine of res judicata or claim preclusion prevents parties from relitigating claims that were or could have been raised in a prior action. U.S. courts have long applied this doctrine “with equal force” to claims brought in arbitration, thus barring parties from raising the same claim resolved in a prior arbitration in a subsequent court action. Gulf v. Eni S.p.A, is a reminder of two fundamental aspects of res judicata. First, non-parties in privity with the parties to a prior action may find themselves precluded from pursuing related claims that were or could have been litigated in the prior arbitration. Second, claim preclusion may bar not only claims that were previously decided in a prior action, including a prior arbitration, but also those that were litigated but not ultimately decided.
