Tuesday, July 19, 2016

Case of the Day: Benihana, Inc. v. Benihana of Tokyo, LLC, 2016 U.S. Dist. LEXIS 92773 (S.D.N.Y. July 15, 2016)


The case was to confirm an arbitral award. Both plaintiff (BI) and defendant (BOT) are corporations operating Benihana restaurants. Although founded by the same person (Hiraoki "Rocky" Aoki,) the plaintiff company eventually came to be owned by outside investors while the defendant entity remained in the Aoki family. BOT granted BI the right to operate Benihana restaurants in the United States, the Caribbean and Latin America, except that BI was required to give license BOT to operate in Hawaii. The agreement had an arbitration clause.

The dispute arose when BOT began selling burgers in Hawaii, which is not one of the recognized menu items in the licensing agreement. BI obtained a preliminary injunction in aid of arbitration to stop BOT from selling burgers and other unauthorized menu items. The arbitral panel found breach of the licensing agreement, but did not allow BI to terminate the agreement. 


One of the best parts of running this blog is to learn the disputes involving popular brands. The courts also delight in this, putting in interesting trivia in their opinions. Judge Engelmeyer in this opinion slips in the fact that the very first Benihana opened at Manhattan's West 56th Street in 1964, and Benihana in Hawaii was constructed from a farmhouse transported from Japan.

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