Court Opinion

ID: 5990758
Source: CourtListenerOpinion
Date Created: 2022-01-13 08:59:35.382109+00
Date Added: 2024-06-11T08:49:50.992585
License: Public Domain

Kupferman, J.,
dissents in a memorandum, as follows. I would reverse and confirm the arbitration award.
The parties had an agreement concerning the purchase and *182management of residential real estate. When a dispute arose between them they agreed to submit the matter to arbitration, pursuant to the provision in their agreement, which reads as follows: "The parties hereto agree that in the event of a dispute under this Agreement which they cannot resolve between themselves, same shall be submitted to the American arbitration association for resolution. The parties agree that they will abide by the decision of the American arbitration association as if it were a decree rendered by a court of competent jurisdiction, which decision shall be final and absolutely binding upon the parties hereto.”
It will be noted that there is no provision as to the number of arbitrators and that the matter is left in the hands of the American Arbitration Association.
After a number of hearings, one of the arbitrators recused himself due to an unrelated matter. The two remaining arbitrators determined to proceed. The respondents moved for a stay of the proceedings if an appointment of a third arbitrator was not made, which relief was denied by the court on the ground that the court’s power was limited to stay arbitrations before they had begun or to vacating the award after they had concluded.
The two remaining arbitrators found for the petitioners, who then moved to confirm the award while the respondents cross-moved to vacate, which cross-motion was granted by the IAS Court, which determined that proceeding in the absence of a third arbitrator constituted misconduct under CPLR 7511 (b) (1) (i).
In my opinion this was error. It is the Rules of the American Arbitration Association which control such a situation and there is no provision in the parties’ agreement to the contrary. Under the Rules, where, as here, a vacancy occurs in a panel of neutral arbitrators after the hearings have commenced, the remaining arbitrators may continue the hearing and determination of the controversy unless the parties agree otherwise, which is not the case here. Likewise, the Rules also provide that decisions must be by a majority of the arbitration panel. Here, the two remaining arbitrators agreed on the result. Accordingly, the Rules having been complied with, the arbitration award should be confirmed.