McDermott Will & Emery has gone to court to compel arbitration with its New York landlord over a real estate tax disagreement, saying the amount in dispute could be more than $16 million over the life of its lease.

According to the Thursday petition, landlord 340 Madison Fee LLC, has demanded $1.04 million in additional rent based on tax escalation adjustments and charges calculated and claimed by the landlord. The firm disputed the recalculation of the base tax amount and charges, and negotiations to resolve the dispute have failed. The firm said it paid more than $1 million in disputed funds as a sign of good faith, but the landlord has refused to arbitrate, "thus seeking a multi-million dollar windfall without any adjudication."

"This is a matter that should have gone straight to arbitration without the need for this petition," the firm said in a filing in Manhattan Supreme Court in Matter of McDermott Will & Emery v. 340 Madison Fee LLC.

The New York Law Journal reported in April 2005 that McDermott had just signed a 15-year lease for 160,000 square feet at 340 Madison Ave. The firm's New York office now has about 125 lawyers. Patterson Belknap Webb & Tyler partner Frederick Warder is representing McDermott. A McDermott spokesman declined to comment, stating the firm will let the filing "speak for itself."

Stephen Meister, a partner at Meister Seelig Fein who represents 340 Madison Fee LLC, said in a statement: "The parties' lease specifies that as a 'condition' of MWE's right to arbitrate, it had to pay the tax escalation payment calculated by landlord. MWE did not do that by the deadline, and so now landlord's tax escalation statement is conclusive and binding. There is nothing to arbitrate."