Superseding Agreements and the Reach of a Later Arbitration Clause

By: Jeffrey M. Haber

Can an arbitration clause adopted today require arbitration of a dispute that arose before the clause existed? In Deshmukh v. Kasowitz Benson Torres LLP, 2026 N.Y. Slip Op. 06550 (1st Dept. Nov. 10, 2026), the Appellate Division, First Department confronted that question in an unusual circumstance involving a law firm partner who left the firm, later returned, and became subject to a new partnership agreement containing an arbitration provision. The dispute concerned compensation allegedly owed from the plaintiff’s earlier tenure at the firm, before his departure and eventual return as a partner. The plaintiff’s compensation claims thus arose under an earlier partnership agreement that contained no arbitration requirement. When he returned to the firm, however, he became a party to a new agreement that expressly superseded the parties’ prior agreements and broadly required arbitration of disputes between them. He later commenced the action seeking to recover that compensation, and the law firm moved to compel arbitration under the partnership agreement governing his return. The law firm argued that the later agreement required arbitration even of the plaintiff’s preexisting compensation claims. The Court agreed, relying on the breadth of the dispute resolution provision and, importantly, the agreement’s express language terminating and superseding the parties’ prior agreements.

Deshmukh v. Kasowitz Benson Torres LLP

Plaintiff was a partner at the defendant law firm during two separate periods.[1] He first joined the firm in September 2018 and remained there until December 2022, when he left to join another law firm. Plaintiff returned to defendant as a partner in July 2023 and remained with the firm until June 2024.

When plaintiff first joined defendant in 2018, he agreed to be bound by the firm’s then-existing partnership agreement, originally dated January 1, 1994, as amended. That agreement did not require mediation or arbitration. Partner compensation was based on a points system in which the firm’s net profits and losses, as well as periodic distributions, were allocated among partners according to their assigned points.

After his first tenure ended, plaintiff claimed that defendant had failed to pay him the distributions to which he was entitled under the original partnership agreement. Defendant disputed those allegations.

Plaintiff returned to defendant in July 2023. At that time, the original partnership agreement remained in effect. Several months later, in December 2023, the firm adopted an Amended and Restated Partnership Agreement (“APA”).

The APA made two changes that became central to the later dispute. First, Section 17.9 established mandatory dispute resolution procedures that had not appeared in the original partnership agreement. It required disputes between the parties arising out of or relating to the APA to proceed through mediation and, if mediation was unsuccessful, arbitration.

Second, Section 17.8 contained an integration and supersession provision. It stated that the APA “sets forth the entire agreement of the parties hereto with respect to the subject matter hereof” and provided that prior and contemporaneous agreements concerning that subject matter were superseded. Those provisions ultimately became central to the disagreement over whether the new arbitration requirement reached compensation claims arising from plaintiff’s earlier tenure.

Plaintiff remained a partner after the APA became effective. His second tenure ended in June 2024, when defendant terminated him for cause.

Following his termination, plaintiff commenced an action concerning claims associated with his second tenure at the defendant firm. After the firm invoked the APA’s alternative dispute resolution provisions, plaintiff discontinued that action without prejudice in favor of arbitration.

In August 2024, plaintiff commenced a separate action in Supreme Court, New York County, asserting breach of contract and New York Labor Law claims based on compensation allegedly owed from his first tenure at the firm. Defendant moved to compel arbitration under CPLR 7503(a), contending that the APA’s arbitration provision governed the dispute. In the alternative, the firm sought dismissal of the claims.

Plaintiff opposed arbitration. He maintained that the compensation claims arose entirely from his first tenure, were governed by the original partnership agreement, and had accrued before the December 2023 APA introduced arbitration into the parties’ contractual relationship. Defendant, by contrast, relied on the APA’s broad dispute resolution language and the supersession provision in Section 17.8, contending that the subsequently adopted APA governed the parties’ dispute.

The Supreme Court, New York County, Commercial Division, agreed with the firm and granted its motion to compel arbitration. The Supreme Court focused principally on Section 17.8, reasoning that the provision superseded the prior agreement and that plaintiff, by being a partner when the APA was adopted, had manifested his assent to the amended agreement and its mediation and arbitration procedures. As Supreme Court explained, failing to apply those provisions to the dispute would, in its view, fail to give effect to the APA’s supersession language.

Plaintiff appealed. The First Department unanimously affirmed.

The Court began with a settled principle of New York contract law. When parties clearly express their intention that a later agreement supersede an earlier one, the later agreement controls.[2] 

The Court then applied that principle to arbitration. It explained that when a later agreement supersedes an earlier agreement and contains an arbitration provision, that provision can apply to disputes predating the later agreement, even though those disputes previously were not subject to arbitration.[3] 

Applying those principles, the Court focused on the APA.

First, Section 17.9 required disputes arising out of or relating to the APA to proceed through mediation and, if mediation was unsuccessful, arbitration. That represented a significant change from the Original Partnership Agreement, or OPA, which contained no mandatory mediation or arbitration requirement.

Second, and central to the Court’s analysis, Section 17.8 stated that the APA “sets forth the entire agreement of the parties hereto with respect to the subject matter hereof” and that “[a]ll prior and contemporaneous agreements with respect to the subject matter of this Agreement are hereby terminated and superseded by this Agreement.”

The Court concluded that this language made the APA, including its dispute resolution provisions, controlling.[4] In its view, the supersession provision brought the parties’ prior contractual relationship within the later agreement, while Section 17.9 established how covered disputes were to be resolved.[5]

The Court also rejected plaintiff’s attempt to distinguish Hwang and Konstantynovska on the ground that those cases involved continuous employment relationships, whereas plaintiff worked at defendant during two separate periods.[6] The Court expressly found no “meaningful distinction” between the earlier cases and plaintiff’s departure from the firm followed by his subsequent return.[7]

As a result, plaintiff’s claims concerning compensation allegedly earned during his first tenure were required to proceed through arbitration even though the partnership agreement governing the parties during that earlier period contained no arbitration requirement.

Takeaway

New York law strongly favors arbitration and requires courts to enforce valid agreements to arbitrate. The Court of Appeals has described this as a “long and strong public policy favoring arbitration,” reflecting the principle that courts should “interfere as little as possible with the freedom of consenting parties to submit disputes to arbitration.”[8] CPLR 7503(a) reinforces that policy by directing that, where there is no substantial question whether a valid arbitration agreement was made or complied with, “the court shall direct the parties to arbitrate.”

But the policy favoring arbitration does not itself determine the scope of the parties’ agreement. The threshold issue remains a contractual one: what disputes did the parties agree to arbitrate, and what effect did they intend a later agreement containing an arbitration provision to have on disputes arising from their earlier contractual relationship?

Those questions are answered by the language and structure of the parties’ agreements. A later-adopted arbitration provision can reach disputes that arose before the provision existed when the language and structure of the later agreement demonstrate that the parties intended it to do so. The inquiry therefore turns not merely on when the underlying dispute arose, but on what the parties agreed to when they entered into the later agreement.

Deshmukh illustrates that principle. Timing alone may not determine the reach of a later arbitration clause. Where the parties subsequently enter into an agreement that supersedes their earlier contractual arrangement and contains a sufficiently broad dispute resolution provision, that provision may encompass claims arising from the parties’ earlier relationship.

The break in the parties’ relationship makes the decision particularly noteworthy. Plaintiff left defendant and later returned, meaning the compensation dispute arose from an earlier and completed phase of the parties’ relationship. The Court nevertheless concluded that the intervening break did not prevent the dispute resolution provisions of the later superseding agreement from reaching those earlier claims.

Deshmukh also demonstrates why an arbitration provision should not be read in isolation. It may be tempting to focus exclusively on whether the clause uses broad language such as “arising out of” or “in connection with.” But integration, supersession, effective date, transition, and survival provisions may be equally important in determining the temporal reach of the parties’ agreement to arbitrate.

Ultimately, Deshmukh shows that whether a later arbitration clause reaches an earlier dispute is a question of contractual intent, not chronology alone. Its reach may depend as much on what the parties say about the relationship between their old and new agreements as on the wording of the arbitration provision itself.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions or litigation releases and not on matters handled by the firm.

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[1] The background facts are based on the Court’s decision and the parties’ briefing on appeal.

[2] Slip Op. at *1, citing Options Group, Inc. v. Vyas, 91 A.D.3d 446, 447 (1st Dept. 2012).

[3] Id., citing Hyuncheol Hwang v. Mirae Asset Sec. (USA) Inc., 165 A.D.3d 413, 414 (1st Dept. 2018), lv. denied, 32 N.Y.3d 910 (2018); see also Konstantynovska v. Caring Professionals, Inc., 172 A.D.3d 486, 486-487 (1st Dept. 2019). In Hwang, the court found that a subsequent agreement which “encompasse[d] the same employment-related disputes as were addressed in the employment agreement […] effectively extinguished” the forum selection clause, requiring the dispute to be arbitrated pursuant to the later agreement. 165 A.D.3d at 414. In Konstantynovska, the court compelled arbitration despite the event at issue occurring prior to the agreement’s amendment, which, as in Deshmukh, added an arbitration provision, finding that the amended agreement’s dispute resolution obligations were binding. 172 A.D.3d at 486.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Stark v. Molod Spitz DeSantis & Stark, P.C., 9 N.Y.3d 59, 66 (2007) (quoting Matter of Smith Barney Shearson v. Sacharow, 91 N.Y.2d 39, 49 (1997)).