An Israeli private equity fund has failed in its attempt to have a Manhattan court stay an arbitration with Gibson, Dunn & Crutcher over $1.3 million in unpaid legal fees. Markstone Capital Partners in January sought to block the arbitration on the grounds that two of its three partners had not signed Gibson’s engagement letters when it took on representation of the fund’s former chairman, Elliott Broidy, during an investigation by New York Attorney General Andrew Cuomo into a pay-to-play scandal at the New York State Retirement Fund.

But last week, Judicial Hearing Officer Ira Gammerman, who sits in Manhattan Supreme Court, denied Markstone’s request and compelled arbitration, calling “unpersuasive” the fund’s argument that Gibson Dunn represented its former chair for two years without any governing written terms.

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