Justice Shirley Werner Kornreich

Goldman Sachs moved to compel arbitration and dismiss a complaint arising from allegations by Basis Yield Alpha Fund of false and misleading statements made by Goldman. Basis Yield argued the statements led to the sale of a security based on collateralized debt obligations. It denied ever entering into Goldman’s general terms and conditions agreement, contending the applicable law did not mandate arbitration of the claims. The court noted the agreement was unsigned, ruling it was sent in a single email and the parties did not engage in negotiations over its terms. Thus, Goldman’s argument the parties “operated” under the agreement was unavailing as the conduct did not satisfy the requirements of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Hence, arbitration was denied. Also, the court found causation was established as, “but for Goldman’s representations,” Basis Yield alleged it would not have purchased the securities and suffered a loss related to Goldman’s representations. Accordingly, the court concluded Basis Yield’s claims for fraud, fraudulent inducement and fraudulent concealment survived Goldman’s motion to dismiss.