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ORGANIZING COMM. FOR THE 1998 GOODWILL GAMES

November 15, 1995

ORGANIZING COMMITTEE FOR THE 1998 GOODWILL GAMES, INC., Petitioner,
v.
GOODWILL GAMES, INC., Respondent.



The opinion of the court was delivered by: FRIEDMAN

 This contract dispute is before the Court on petitioner's petition to compel respondent to arbitrate several disagreements related to a contract between the parties and petitioner's motion for an injunction against respondent terminating the contract prior to the completion of the arbitration proceeding. A hearing was held on November 8, 1995.

 Having fully considered the terms of the contract, petitioner's memorandum, respondent's opposition, petitioner's reply and the affidavits and exhibits filed by the parties, and having provided counsel ample opportunity to argue their positions in open court, the Court grants the petition to compel arbitration and petitioner's motion for an injunction.

 Goodwill Games, Inc. ("GWG"), is the owner of the Goodwill Games, an amateur sports event involving world class athletes in Olympic style competition. In 1992 it chose the New York metropolitan area as the site for the 1998 Goodwill Games. It then entered into a fully integrated contract with the Organizing Committee for the 1998 Goodwill Games, Inc. ("OCGG"), the 1998 Goodwill Games Agreement, whereby OCGG would organize and plan the 1998 Games. See Pet.'s Ex. A and P 30. The term of the Agreement was to begin on the date of its execution and last until December 31, 1998, or beyond if necessary for completion of the parties' obligations. Pet.'s Ex. A at P 25.

 Paragraph 14 of the Agreement provides in part:

 
All claims, disputes and other matters in question between the parties arising out of, or relating to, this Agreement (all "disputes") shall be resolved by arbitration . . . .
 
* * * *
 
14.4 To assure that all disputes between the parties arising from this Agreement are resolved in a manner which is least disruptive to the conduct of the Games, the parties agree, to the extent possible, to continue performance of this Agreement during any arbitration proceedings, and to cooperate in expediting such proceedings.

 Pet.'s Ex. A at PP 14, 14.4.

 In the last several months, the working relationship between GWG and OCGG has deteriorated. On October 13, 1995, GWG notified OCGG of its intention to terminate the Agreement within 30 days of OCGG receiving the letter. GWG stated in the letter that OCGG was "in material breach under [the] Agreement . . ." and had 30 days under paragraph 15 of the Agreement to either cure the breach or provide reasonable assurances that it could perform its obligations. Pet.'s Ex. J.

 As authority for its right to terminate the Agreement, GWG cited paragraph 15 which provides:

 
In the event either party is adjudicated a bankrupt; becomes insolvent; makes an assignment for the benefit of creditors or has a trustee appointed to manage its affairs . . . is in material breach hereunder at any time, and such party fails to cure such breach within thirty days . . . following its receipt of written notice to cure from the other party, the other party may terminate this Agreement effective immediately. Such termination shall be in addition to all other rights and remedies that the non-breaching party may have had hereunder or at law or in equity, it being agreed that all rights and remedies whether expressed herein or arising hereunder are cumulative. . . .

 Pet.'s Ex. A at P 15. While invoking paragraph 15 and maintaining that there has been a material breach, in its papers and at oral argument GWG also cited paragraph 4.23 of the Agreement, which it argues permits it to unilaterally terminate the ...


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