The opinion of the court was delivered by: FREDERIC BLOCK, District Judge
Plaintiff Mecos, S.r.L. ("Mecos") brought a breach-of-contract
action against defendants Georal International, Ltd., Georal
International of New York, Inc. and Georal International of
California (collectively, "defendants"). Defendants move to
compel arbitration. For the following reasons, the Court grants
the motion. BACKGROUND
This dispute arose after the defendants failed to tender
payment to Mecos for forty specially-ordered security portals.
The following facts are not in dispute.
A. Distributorship Agreement
In December 1995, "Mecos S.p.A., of Bologna, Italy" and "Georal
International of Whitestone, New York, U.S.A." entered into a
Distributorship Agreement ("Agreement").*fn1 See Agreement
at 1, att'd as Ex. A to Defs.' Notice of Mot. to Compel
Arbitration ("Defs.' Notice").
Mecos argues that none of the defendants have standing to
enforce the Agreement because they were not signatories to the
The Agreement stated that it was "between Mecos S.p.A., of
Bologna, Italy (`Mecos') and Georal International of Whitestone,
New York, U.S.A. (`Georal')." See Agreement at 1. With two
exceptions, the Agreement, thereafter, referred to the parties as
"Mecos" and "Georal": (1) Article XII provided that "notices . . .
shall be sent . . . to: Mecos S.p.A. . . . [and] Georal
International"; and (2) the Agreement was executed by Piero
Zambuto ("Zambuto"), who was listed as the president of "Mecos
S.p.A." and Alan J. Risi ("Risi"), who was listed as the
president of "Georal International." See id. at 6-7.
2. Terms of the Agreement
The Agreement appointed Georal as a distributor of Mecos's
products in the United States and Canada and set forth the terms
of sales for those products. See id., arts. I, VIII. The
Agreement contained an arbitration provision, which provided:
Should any problems, disagreements or disputes arise
between Mecos and Georal in connection with this
Agreement, the parties shall attempt to resolve all
such matters on a friendly and business-like basis.
If they should be unsuccessful they will each appoint
a representative, familiar with their business to act
as arbitrators. The two representatives will review
the circumstances of the dispute and apply business
principles to arrive at a resolution. The decision of
the representatives will be binding.
Id., art. XIII.
The Agreement set an initial term of three years, which expired
well before the instant dispute occurred; however, it was
renewable for additional two-year terms "upon agreement on the
`sales goals' for the new term, and unless either party decides
not to renew, pursuant to the terms of ARTICLE IV[,]" which
The sole grounds for not renewing this Agreement
shall be the failure of performance of the other
part. The innocent party must give the non-performing
party 90-days written notice of its failure to
perform and a demand for proper performance. If the
failure is not cured within the 90-day period, the
innocent party may terminate the Agreement.
See id., arts. III, IV. Although the parties never engaged in
further negotiations of sales goals, see Aff. of Zambuto ¶ 9,
the Agreement was never formally terminated by sending written
notice of a party's non-performance. See Aff. of Pryor (Oct.
17, 2004) ¶ 16, att'd to Defs.' Notice.
Risi is the sole shareholder and president of each of the
defendants. See Aff. of Risi (Oct. 17, 2004) ¶ 1, attached to
Defs.' Notice. Georal International, Ltd. was formed on October
24, 1995 for the express purpose of doing business with Mecos and
engages in the sale of security portals. See Aff. of Pryor ¶
Georal International of New York, Inc. and Georal International
California were formed in November 1999 and September 1999
respectively, subsequent to the ...