Court Opinion

ID: 9760318
Source: CourtListenerOpinion
Date Created: 2023-08-29 00:48:01.952097+00
Date Added: 2024-06-11T07:29:10.855642
License: Public Domain

*200CLIFFORD, J.,
dissenting.
Presented with the opportunity to fuse the applicable law with the real world of long-standing, successful commercial practice, the Court has chosen instead to “throw a monkey wrench into the gears” of tripartite commercial arbitration. See Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 227 (1979) (Pashman, J., concurring). The majority’s panegyric on impartiality overrules our settled case law going back at least three score years and eight, reformulates our arbitration statute and judicial interpretation thereof, takes liberties with decisional authority from other jurisdictions, brushes aside the contract of the parties, invites pre-arbitration disputes and post-arbitral award challenges, and jeopardizes the efficiency that has hitherto characterized the private resolution of commercial disputes. In sum, the Court “not only departs radically from existing caselaw dealing with the nature of judicial review of arbitrators’ awards but more importantly, strips commercial arbitration of its basic value.” In re Arbitration Between Grover and Universal Underwriters Ins. Co., 80 N.J. 221, 233 (Pashman, J., dissenting). Because the record before us does not warrant intrusion into a practice that is getting along nicely without our judicial intervention, I am constrained to dissent.
I
Barcon’s contract with Tri-County anticipated the possibility of a disagreement under the contract. It addressed the issue of dispute resolution by providing for arbitration, with one arbitrator to be chosen by each party and those two to select the third. In the event of a party’s failure to appoint an arbitrator, the contract created the machinery for appointment of “an arbitrator to represent the party in default” (emphasis added). Although neither party had to resort to this appointment device in the case before us, the contract language of an arbitrator acting as a party’s “representative” was neither inadvertent nor without significance.
*201When the dispute in question went to arbitration, Tri-County selected as its arbitrator Gareld R. Gray, a civil engineer employed by S.J. Groves & Sons Co., general contractors, with whom Tri-County had done about $3,000,000 worth of business in the recent past. For its arbitrator Barcón chose Vincent A. Spatz, an independent general contractor who had done business with both parties. Gray and Spatz then agreed on the appointment of Allan Arnowitz, a consulting engineer, as the neutral arbitrator. Mr. Arnowitz, who had no relationship with either party, served as chairman of the panel. The business dealings between Barcón and its selected arbitrator, Spatz, provided the basis for the trial court’s vacating of the arbitration award in Tri-County’s favor. 160 N.J.Super. 559 (Law Div.1978). The Appellate Division affirmed. 172 N.J.Super. 186 (1980).
In approving this result the Court holds that a tri-partite commercial arbitration award may be vacated under N.J.S.A. 2A:24-8(b) for the “evident partiality” of a party-designated arbitrator who maintains “an undisclosed, substantial business relationship” with the party designating him. This result pertains even though no bias or partiality was actually manifested by the arbitrator. Rather, the majority decides that under N.J.S.A. 2A:24-8(b) the mere appearance of partisanship arising out of the business relationship between the arbitrator and the party selecting him is sufficient to vacate an otherwise untainted award.
II
Until today the law in New Jersey has been that an arbitral award will not be vacated for the “evident partiality” of a party-designated arbitrator unless there is a showing of actual bias or partiality in the course of the arbitrator’s conduct in the hearing, deliberation, decision or award. See Central Union Stock Yards Co. v. Uvalde Asphalt Paving Co., 82 N.J.Eq. 246, 260-61 (Ch.1913). The burden of proof has been on the party seeking to upset the award to demonstrate actual partiality in *202the course of the proceedings. Uvalde, supra, 82 N.J.Eq. at 258, 260-61; Int’l Bhd. of Teamsters v. Bergen-Hudson Roofing Supply Co., 159 N.J.Super. 313, 315 (Ch.Div.1978); Palizzoto v. Local 641, Int’l Bhd. of Teamsters, 67 N.J.Super. 145, 154 (Ch.Div.1961), aff’d o. b., 36 N.J. 294 (1962).
As stated by Judge Fuld for the New York Court of Appeals in Astoria Medical Group v. Health Ins. Plan, 11 N.Y.2d 128, 227 N.Y.S.2d 401, 182 N.E.2d 85 (Ct.App.1962), an attack on an arbitral award based on the “evident partiality” of a party-appointed arbitrator “must be based on something overt, some misconduct on the part of [the] arbitrator, and not simply on his interest in the subject matter of the controversy or his relationship to the party who selected him.” 11 N.Y.2d at 137, 227 N.Y.S.2d at 407, 182 N.E.2d at 89. The reasoning of Astoria is in conformity with a proper reading of the statutory expression “evident” partiality. It also accords with the generally recognized view that in order to justify the setting aside of a commercial arbitration award, the arbitrator’s bias or prejudice arising out of a special relationship with one of the parties “must be direct, definite and capable of demonstration, rather than remote, uncertain or speculative.” M. Domke, The Law and Practice of Commercial Arbitration § 21.02 (1968). Previous business relationships, friendship, or even the status of being a creditor of one of the parties should not justify the setting aside of an arbitral award, provided there is no showing of fraud, misconduct, or actual bias or partiality evidenced during the course of the proceedings. See C. Updegraff & W. McCoy, Arbitration of Labor Disputes 71 (2d ed. 1961).
. The Court relies on Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145, 89 S.Ct. 337, 21 L.Ed.2d 301 (1968), as support for the proposition that all arbitrators, whether neutral or party-designated, are required “to avoid not only actual partiality but also the appearance of partiality.” Ante at 189. That case, however, does not lend support to the majority’s equation of the “appearance” of partiality with “evident partiality” under the applicable provision of the arbitration *203statute; for as the Second Circuit recently held, in a case involving a neutral arbitrator, “the Supreme Court in Commonwealth Coatings did not expand the [statutory] standard of ‘evident partiality’ to include ‘appearance of bias.’ ” International Produce, Inc. v. A/S Rosshavet, 638 F.2d 548, 551 (2d Cir. 1981). In the instant case, as in Rosshavet, “we have an assertion of ‘appearance of bias’ which seems to us, at best to be speculation without substance.” Id. at 551. The majority acknowledges, as well it must, that there was not a showing nor even an allegation of actual partiality, unfairness, bias or fraud on the part of arbitrator Spatz at any time during the proceedings under review. “Thus, the record is completely bare of anything remotely resembling ‘evident partiality.’ ” Id. The majority’s complete reformulation of the arbitration statute and judicial interpretation thereof is particularly unwarranted in a case where, as here, no claim is made of misconduct indicating actual bias or partiality in any degree.
Ill
That which the Court finds most objectionable is arbitrator Spatz’s failure to disclose his substantial business relationship with Barcón at the outset of the arbitration proceedings. Accordingly, it imposes upon all arbitrators, whether neutral or party-appointed, the requirement of full disclosure of any business relationships with the parties that might “suggest to a reasonable person that the arbitrator is interested in the outcome of the arbitration or which might reasonably support an inference of partiality.” Ante at 192. Perhaps the weakness in the Court’s chain of analysis is most graphically illustrated by the fact that every authority the majority cites for the imposition of this disclosure requirement is concerned with business relationships involving arbitrators intended by the parties to be neutral. See Commonwealth Coatings, supra, 393 U.S. at 146, 89 S.Ct. at 338, 21 L.Ed.2d at 303 (“the third arbitrator, the supposedly neutral member of the panel”); Sanko S. S. Co., Ltd. v. Cook Industries, Inc., 495 F.2d 1260, 1261 (2d Cir. 1973) *204(neutral arbitrator); Johnston v. Security Ins. Co. of Hartford, 6 Cal.App3d 839, 843, 86 Cal.Rptr. 133, 136 (Ct.App.1970) (“the neutral umpire or arbitrator”); Northwest Mechanical, Inc. v. Public Utilities Comm’n, Minn., 283 N.W.2d 522, 524 (Minn.1979) (neutral arbitrator); J. P. Stevens & Co., Inc. v. Rytex Corp., 34 N.Y.2d 123, 126, 312 N.E.2d 466, 467, 356 N.Y.S.2d 278, 280 (Ct.App.1974) (AAA-appointed arbitrator intended to be neutral); Richco Structures v. Parkside Village, Inc., 82 Wis.2d 547, 550, 263 N.W.2d 204, 207 (Wis.1978) (neutral arbitrator). Moreover, in Richco Structures, supra, the majority’s paramount authority for imposing the full disclosure requirement upon party-designated arbitrators, the Supreme Court of Wisconsin expressly limited its analysis to the neutral arbitrator. Id., 263 N.W.2d at 210. It is abundantly clear that the majority’s opinion is mistakenly based on decisional law “concerning the alleged bias or partiality of neutral, not party-appointed arbitrators.” Tipton v. Systron Donner Corp., 99 Cal.App.3d 501, 506-07, 160 Cal.Rtpr. 303, 306 (Ct.App.1979) (citing Johnston v. Security Ins. Co., supra) (emphasis in original).
The disclosure requirement imposed by § 19 of the American Arbitration Association (AAA) Commercial Arbitration Rules (1980 ed.) is likewise inapposite. The agreement between the parties in the instant case does not provide that arbitration of contract disputes be conducted in accordance with the Commercial Arbitration Rules of the AAA. More importantly, even had the agreement contained such a provision, § 19 of the AAA rules would not have imposed upon arbitrator Spatz the duty to disclose his business relationships with Barcón. The requirements of § 19 are expressly limited to apply only to “person[s] appointed as neutral Arbitratorjs].” The AAA disclosure requirement of § 19 is therefore of no relevance to the situation at hand.
IV
Today’s decision results in an indiscriminate muddling of the heretofore dissimilar expectations of impartiality with respect to *205party-designated and neutral arbitrators. It thereby runs the risk of distorting the idiosyncratic nature of the tripartite commercial arbitration procedure for which the parties bargained. As indicated heretofore the arbitration clause in the parties’ sub-contract provided that in the event of any dispute arising thereunder, each party was to appoint one arbitrator of its choice, with the third to be chosen by the two thus selected. By agreeing upon this method of selection, both parties necessarily, and by design, accepted the fact that the two arbitrators initially selected represent the interest of the party that selected them. See Richco Structures, supra, 82 Wis.2d at 556, 268 N.W.2d at 210; Astoria, supra, 11 N.Y.2d at 134-35, 227 N.Y.S.2d at 404-05, 182 N.E.2d at 87-88; Karpinecz v. Marshall, 48 Misc.2d 8, 264 N.Y.S.2d 65, 68 (Sup.Ct.1965); M. Domke, supra, at § 20.04; Note, The Use of Tripartite Boards in Labor, Commercial and International Arbitration, 68 Harv.L.Rev. 293, 297 (1954). Party-designated arbitrators are not expected to approach the dispute with the impartiality of a neutral arbitrator. See Note, supra, 68 Harv.L.Rev. at 296-97. Indeed, the partisanship of the party-designated arbitrator is perceived as an advantage of the tripartite system, ensuring that each party’s position will be adequately presented and pressed before the panel. Id. at 297. A special relationship between the non-neutral arbitrator and the party that designated him is “implicit in the nature of the tripartite format here freely adopted by the parties” to the contract, and is an advantage of equal benefit to both parties. Tipton v. Systron Donner Corp., supra, 99 Cal. App.Sd at 506, 160 Cal.Rptr. at 305.
The Court’s error in this regard results both from a misguided sense of commercial morality and a mistaken notion of sound public policy. Its morality consists of the proposition that there is something inherently evil in allowing party-designated arbitrators to participate in the resolution of disputes when they may be partial to the party that selected them. The truth is that there is nothing wrong with it at all. The parties specifically intend and expect it and are sophisticated enough to know *206the consequences of their choice of a tripartite panel. The neutral arbitrator is abundantly aware of the nature and composition of such a panel and is not misled in the least. It would indeed be evil if the arbitrator expected by the parties to be neutral were actually partial, but that is not at all what this case is about. Justification for the majority’s position in respect of party-designated arbitrators would arise only if the appearances so grievously affected the public’s confidence — they certainly do not affect the expectations or confidence of the parties — in the system of arbitration as to warrant foregoing the designed advantage of this workable device. The general public, however, is not in the least bit concerned about tripartite commercial arbitration. Those who know anything at all about the practice understand the need and desire for party-designated arbitrators who are indeed partisan.
If some dilution of public confidence in the integrity of arbitration results from this practice, it is insignificant compared to the loss of value that would result if the practice were deprecated in New Jersey, where it is well-entrenched and totally accepted in the commercial world. Moreover, were the practice to be deprecated substantially, a much more significant dilution of public confidence in this Court would result from its misguided decision than the insignificant diminishment of public confidence in the commercial arbitration procedure. Finally, because the Court’s result condemns but does not effectively prohibit the very thing that is alleged to affect the public’s confidence, namely the appearance of partiality, no benefit is achieved in terms of maintaining the integrity of commercial arbitration proceedings.
Although the Court says it understands that the party-designated arbitrator is not expected to be entirely neutral, it proceeds nevertheless to draw a line between “acceptable general predisposition of attitude” on the one hand and “impermissible bias or partisanship (or the appearance thereof)” on the other. Ante at 191. Invoking the language of the trial court below, it suggests that this line is crossed when the arbitrator maintains *207undisclosed, substantial business relationships with the party that selected him. Id.
The drawing of any such “line” is an ill-advised and unnecessary labor. The arbitration statute does not forbid “the appearance of partisanship” as may be suggested by the mere status or relations of the arbitrators and parties. Rather, it forbids the arbitrator’s “evident partiality.” N.J.S.A. 2A:24-8(b). “Partisan [the party-appointed arbitrator] may be, but not dishonest.” Astoria, supra, 11 N.Y.2d at 137, 227 N.Y.S.2d at 407,182 N.E.2d at 89.
Even if it were necessary to draw such a line, which it is not, it should not be drawn in an artificial and meaningless way. The Court’s approach creates a presumption that all arbitrators with undisclosed, substantial and ongoing business relationships with a party are impermissibly biased or partial, regardless of the absence from the record of any indication that the proceedings were in fact tainted by actual or demonstrable partiality. This presumption is both irrational and unworkable. It disqualifies an arbitrator of totally impartial character and disposition on the speculative ground that his business relationships suggest a relatively high risk of bias and impartiality. The Second Circuit in Rosshavet, supra, has recognized that
[t]he most sought-after arbitrators are those who are prominent and experienced members of the specific business community in which the dispute to be arbitrated arose. Since they are chosen precisely because of their involvement in that community, some degree of overlapping representation and interest inevitably results. * * * To vacate an arbitration award where nothing more than an appearance of bias is alleged would be “automatically to disqualify the best informed and most capable potential arbitrators.” [638 F.2d at 552 (quoting Commonwealth Coatings, supra, 393 U.S. at 150, 89 S.Ct. at 340, 21 L.Ed.2d at 306 (White, J., concurring)).]
On the other hand, the majority’s approach would not reach the arbitrator who has no substantial, ongoing business relationship with the party that designated him, but who may in fact feel a greater degree of “impermissible bias or partisanship” toward a party than any arbitrator who maintains the suspect relationship. Those arbitrators having no active or significant *208business dealings may be infinitely more partial in favor of a party than those with such dealings. The social friend, the political ally, the long-term business associate, the expectant customer — all can be biased in favor of the party selecting them to a much greater degree than the expectant creditor of this case. It would be ironic, if it did not produce such a bad result, to note that the expectant creditor is the last person to be regarded as biased in favor of the party that selected him. All that a payment during the pendency of proceedings may do is neutralize the creditor’s hostility. All of these other relationships, mentioned above, create partiality not only in fact but in appearance.
There is no magical quality to ongoing business relationships that triggers the fact of bias. Presumably the majority, as well as the trial court below, would hold that arbitrator Spatz would have been qualified to sit on the panel even though his prior business dealings had rendered him totally dependent on the party selecting him, and his future business life similarly dependent, just so long as there were no present, ongoing business dealings between them. The position is most untenable.
Moreover, that the parties can waive objection to selection of the other’s designated arbitrator if his business relationships are fully disclosed bespeaks the artificiality of the disclosure requirement. If the existence of too substantial a business relationship between arbitrator and a party creates a presumption that the arbitrator cannot render an impartial decision and award, how is that bias or partiality transformed into impartiality by the other party’s failure to object after being told the score? According to the majority’s analysis, that which might cause an arbitrator to conduct himself with partiality is his having an interest in the proceedings because of a close relationship with the party that appointed him to the panel. If such an interest did in fact exist at the outset of the proceedings, it would not dissipate upon disclosure of the relationship.
*209This underlying inconsistency in the majority’s position stems from its refusal to recognize the most simple fact of this case. Once party-designated arbitrators are permitted, the cleansing of partisanship is impossible. One need not be a learned jurist to grasp the impossibility of the task. A party to a dispute is actually selecting the judge. No other practice could assure a stronger partisanship. Once the practice is permitted, judicial efforts to cleanse it of that fundamental partisanship will inevitably result in confusion of the worst kind.
In addition to this confusion born of trying to distinguish degrees of partiality and disqualify for one degree but not the other, the greater confusion results when a court condemning partiality in this connection proclaims the virtuous result that it has achieved. The majority’s whole game in this instance is directed at eliminating the appearance of bias; yet, when it comes to the end, it throws in the towel. The worst possible bias in fact is to be permitted, if waived, and the forbidden appearances are equally permitted. Hence one must wonder how the majority’s solution serves its declared purpose of maintaining “the integrity of arbitration and public faith in the process.” Ante at 189.
In seeking to. fulfill that purpose at the expense of the contractual considerations that should control the result in this case, the majority dismisses well-settled decisional law that the submission of a dispute to arbitration is essentially a matter of contract between the parties. See e. g., Kearny PBA, supra, 81 N.J. at 217; In re Arbitration Between Grover, supra, 80 N.J. at 230-31 (1979); Clifton Bd. of Educ. v. Clifton Teachers Ass’n, 154 N.J.Super. 500, 503 (App.Div.1977); Moreia Constr. Co., Inc. v. Wayne Tp., 98 N.J.Super. 570, 575-76 (App.Div.) certif. den., 51 N.J. 467 (1968); Wm. J. Burns, Inc. v. N.J. Guards Union, 64 N.J.Super. 301, 307 (App.Div.1960); Mitchell v. Alfred Hofmann, Inc., 48 N.J.Super. 396, 405-06 (App.Div.1958); Harsen v. Bd. of Educ. of West Milford Tp., 132 N.J.Super. 365, 370-71 (Law.Div. 1975). The commercial arbitration process is a private one agreed upon by the contracting parties for the vindication of *210their private contractual interests by application of arbitrators’ specialized knowledge and expertise in the area in controversy. See, e.g., Horne v. New England Patriots Football Club, Inc., 489 F.Supp. 465, 470 (D.Mass.1980); Kearny PBA, supra, 81 N.J. at 225 (Pashman, J., concurring). Through the medium of their agreement the parties have the right to decide what it is that will be arbitrated, who the arbitrators will be and how they will be selected, and how the arbitration will proceed. Id. at 225-27 (Pashman, J., concurring). The avowed goal of maintaining “public faith in the process” is at best secondary to the paramount public policy consideration of reviewing courts — the promotion and encouragement of voluntary arbitration as a means of resolving commercial disputes informally, expeditiously, relatively inexpensively, and in a manner that relieves our overburdened judicial resources. See Carpenter v. Bloomer, 54 N.J.Super. 157, 162 (App.Div.1959). See also N.J. Mfrs. Ins. Co. v. Haran, 128 N.J.Super. 265, 269 (App.Div.1974). The Court’s decision ignores this primary public policy of encouraging arbitration and the informal resolution of commercial disputes, without furthering in any significant way “public faith in the process.”
The only practical advantage in applying the disclosure requirement to party-designated arbitrators is that full disclosure of all business relationships between arbitrator and party would better enable the neutral arbitrator to evaluate the degree of bias or partisanship of the other two arbitrators in making his deliberations and decision. The avowed purpose of full disclosure is that it puts the neutral arbitrator on notice that the party-designated arbitrators might possibly be partisan. However, in tripartite commercial arbitration the neutral arbitrator is already aware at the outset of the proceedings that the party-designated arbitrators are designedly partisan. See Note, supra, 68 Harv.L.Rev. at 296. The neutral arbitrator automatically assumes that the party-designated arbitrators have been chosen to represent the respective sides by whom they were selected, and he knows that it is his responsibility to temper *211their partisanship with his neutrality and objectivity. It is an accepted part of the process for which the parties have bargained.
V
The Court’s approach not only affects the restatement of prior decisional law and the reformulation of the arbitration statute, but also rewrites the contract between the parties. “Arbitration is essentially a creature of contract, a contract in which the parties themselves charter a private tribunal for the resolution of their disputes. The law does no more than lend its sanction to the agreement of the parties, the court’s role being limited to the enforcement of the terms of the contract.” Astoria, supra, 11 N.Y.2d at 132-33, 227 N.Y.S.2d at 404, 182 N.E.2d at 87. If the parties to the instant ease wanted an all-neutral board of arbitrators, they would have so provided in their contract. But they did not. Their agreement expressly provides that each party shall designate a single arbitrator “to represent the party” and that the two party-designated arbitrators shall select the third or “neutral” arbitrator. They agreed to no words of limitation on the identity, status or relationships of the party-designated arbitrators, as they clearly could have if they so intended.
I would not deny the parties the right to have their dispute settled by the type of arbitration panel for which they have contracted. Nor would I require an affidavit from an arbitrator stating that despite his general predisposition of attitude, he went in to the arbitration objectively and free from actual partiality. To do so would be as unrealistic as the approach taken by the majority. The parties expect the designated arbitrators to continue their partisanship during the proceedings, and they expect them to present and advance the position of the party that selected them. Recognition of the inherent partisanship of party-designated arbitrators is the only intellectually honest approach to the situation. Their precise disposi*212tion at the time of the hearings, deliberation or decision cannot be the subject of judicial inquiry, for it would be an inquiry addressed to what should be an irrelevant issue. It would demonstrate only that the arbitrators were doing exactly what the parties intended, expected, and agreed that they should do, namely represent the interests of the party that designated them.
The method of selecting arbitrators established by the agreement of the parties must be complied with by the parties and followed by the courts. Astoria, supra, 11 N.Y.2d at 133, 227 N.Y.S.2d at 404, 182 N.E.2d at 404; M. Domke, supra at § 20.04. This Court may not rewrite their contract. See LaStella v. Garcia Estates, 66 N.J. 297, 304 (1975); Astoria, supra, 11 N.Y.2d at 136, 227 N.Y.S.2d at 406, 182 N.E.2d at 89. The Court should enforce, not rescind, Barcon’s unqualified contractual right to designate an arbitrator of its own choice, which right has been recognized as “the essence of tripartite arbitration.” Id. at 135, 227 N.Y.S.2d at 405, 182 N.E.2d at 88. See Note, supra, 68 Harv.L.Rev. at 297. Contrary to the observation of the Appellate Division below, the New York Court of Appeals’ decision in Astoria is not inconsistent with the subsequent decision of the same court in J. P. Stevens & Co., Inc. v. Rytex Corp., supra. The reason that J. P. Stevens was decided “without even mentioning” Astoria, see 172 N.J.Super. at 188, is because the two cases dealt with entirely different factual situations. The J. P. Stevens case concerned the alleged bias or partiality of a designedly neutral arbitrator. See 34 N.Y.2d at 129-30, 312 N.E.2d at 467, 356 NY.S.2d at 283. Astoria, which thoroughly discussed the applicable standards of impartiality of party-designated arbitrators, is still recognized as controlling law in New York. See, e.g., In re Local 964, United Bhd. of Carpenters, 73 A.D.2d 968, 424 N.Y.S.2d 253, 254 (App.Div.1980).
The court has rewritten the agreement between the parties in yet another fundamental respect. As a corollary of the arbitrator’s responsibility to make full disclosure of all prior business relationships with a party to the arbitration, the majority grants *213the other party the right to object to the designation of that arbitrator on the basis of the disclosed relationship. The fact of the matter is that in this species of tripartite commercial arbitration, where the agreement on the method of selection does not so provide, one party has no right to object to the other party’s designation of a partisan arbitrator. M. Domke, supra, at § 20.03. As concluded in the Astoria case,
since both parties, by agreeing upon tripartite arbitration, have necessarily accepted the idea of “partisan” appointees, neither may object to the other’s designation of someone associated with his interest or related to him. [11 N.Y.2d at 138, 227 N.Y.S.2d at 408, 182 N.E.2d at 90.]
The completed arbitral award in this case should not be vacated for failure of Barcon’s designated arbitrator to make full disclosure of his prior business relationships at the outset of the proceedings when the contract gave Tri-County no right to object to that selection in any event, even if full disclosure had been made.
VI
The majority’s pre-arbitration disclosure requirement now confers upon parties the pre-hearing right to object to the other party’s selection of a representative arbitrator. However, it “leave[s] to the parties themselves” decisions as to the permissible degree of association between arbitrators and the parties. Ante at 194. In other words, the parties themselves are to determine what relationships are “substantial” enough to warrant the disqualification of an arbitrator initially selected by a party. That this procedure will lead to greatly increased pre-arbitration dispute is obvious. The majority opinion provides little or no useful guidance as to how the parties, once all relevant business relationships are disclosed, are to draw the line between relationships that evince an “acceptable general predisposition of attitude” and those that manifest “impermissible bias or partisanship or the appearance thereof.” Ante at 191. Not only is it a distinction that cannot be drawn with any meaningful degree of certainty, but it is one that need not be discussed *214with respect to a party-designated arbitrator in tripartite commercial arbitration.
Notwithstanding its assurances to the contrary, the Court has also made available an entirely new avenue for post-arbitral award challenge. The majority’s decision will encourage parties dissatisfied with the award to delve deeply into each arbitrator’s history in search of substantial business relationships with his appointor that the arbitrator may have failed to disclose at the outset of the proceedings. This approach encourages post-award litigation and invites uncertainty in the finality of a completed award, thereby eviscerating the arbitration process.
Before the Court so drastically changes the interpretation of “evident partiality” under N.J.S.A. 2A:24-8(b) for the avowed purpose of “maintaining the integrity of arbitration,” there should be a showing that the present system of tripartite commercial arbitration is in need of such assistance from the judiciary — which is otherwise bound to allow the process to function unfettered by excessive intervention. It may be that judicial review is being exercised to police a situation in which the intended beneficiary of its intervention (tripartite commercial arbitration) is fairing quite well as is. The majority has added steps to the arbitration procedure that will adversely affect the expedience, economy and informality with which voluntary arbitration effects the private resolution of commercial disputes. See Carpenter v. Bloomer, supra, 54 N.J. at 162. A salutary device designed as “an end to litigation” now bids fair to become “the beginning of it,” In re Arbitration Between Grover, supra, 80 N.J. at 235 (Pashman, Jr., dissenting) — “a springboard to litigation rather than remaining the end to it.” Kearny PBA, supra, 81 N.J. at 227 (Pashman, J., concurring).
There is, of course, another possibility, and it is a real one— that the practical effect of today’s decision will be nil. Since the parties are not at all interested in raising claims of bias or partiality against party-designated arbitrators, and since the Court’s ruling allows them to waive such claims, in the future *215they will merely waive them in advance. They will do so simply by means of a provision in their arbitration agreement that waives the disclosure otherwise required by the majority’s approach. The majority is unwilling to proclaim disqualification as a matter of law, no matter what the degree of bias may be, preferring instead to allow waiver of same after disclosure. If the Court will allow the parties, with full knowledge of the consequences, to proceed with the arbitration process despite the most extreme manifestations of partiality, then logically it should allow them to do the same by waiving the disclosure requirement itself, with full knowledge of the fact that by so doing there may remain on the panel an arbitrator who is substantially biased in favor of the other party to the dispute.
Because the practice works, parties to tripartite commercial arbitration do not want or need a judicially-imposed requirement that the party-designated arbitrators disclose such prior dealings or relationships as would demonstrate the specific degree of their possible bias. The parties are not the least bit interested in that, for it is a given. The parties to the contract understand it, the party-designated arbitrators understand it, and the neutral arbitrator understands it. It is the unvarying expectation of everyone involved in the process.
Therefore, other than the unwarranted result in this particular case, the decision is likely to accomplish nothing. That is unfortunate in the sense that the Court identifies evil but does nothing to prohibit it. The only morally defensible conclusion to be derived from the premise that the appearance of partiality in party-designated arbitrators is evil is the prohibition of this form of tripartite commercial arbitration. There is no middle ground. I would disagree with such a result but would have to respect it. It would represent a balancing of the advantages of an efficient system of arbitration that is desired by the parties against the disadvantages of the appearance of partiality in any court-sanctioned resolution mechanism. Since I would disagree with a value judgment concluding that the possible disadvan*216tages of appearances outweigh the proven advantages of tripartite commercial arbitration, I would leave well enough alone.
Chief Justice WILENTZ and Justice SCHREIBER join in this opinion.
For aff/rmance-Justices SULLIVAN, PASHMAN, HANDLER and POLLOCK — 4.
For reversal — Chief Justice WILENTZ and Justices CLIFFORD and SCHREIBER — 3.