In re the Arbitration between Cross Properties, Inc. & Gimbel Bros.

15 A.D.2d 913, 225 N.Y.S.2d 1014, 1962 N.Y. App. Div. LEXIS 10785

Opinions

Per Curiam.

In this arbitration proceeding the appellant appeals from an order confirming an arbitrators’ award and denying appellant’s application to vacate the said award.

The vacatur was sought on four grounds. One of the grounds, charging that one of the arbitrators made independent visits to the building whose construction was the subject matter of the arbitration, is frivolous. The arbitrator explains those visits by saying that they were simply normal shopping visits made by him and his wife from their home in the neighboring vicinity. There is no reason to believe otherwise since prior to such shopping excursions there had already been several official visits by the arbitrators to the site.

A second objection is that two of the arbitrators entered into a business relationship during the proceeding. We see nothing wrong in that relationship insofar as this arbitration is concerned. Apparently neither did the appellant because it had full knowledge thereof and raised no objection until after an adverse award had been rendered. Having such knowledge and not having objected they waived the right to do so after the rendition of the award.

It is also urged that the method of selection of the arbitrators was unfair. This argument is without merit. The method of selection had been agreed upon between the parties and the arbitration tribunal. If in fact there were any deviations from the agreed-upon procedure they were insignificant, nonprejudicial and, in any event, justifiable under the circumstances.

The only ground advanced in support of vacatur that deserves more than a summary disposition is that concerning the relationship between the arbitrator, Spear, and the respondent. We agree that where there are undisclosed dealings between a party and an arbitrator which impart a lack of impartiality and fairness, the award made is subject to vacatur (Matter of Friedman, 215 App. Div. 130, 137; Matter of Milliken Woolens [Weber Knit Sportswear], 11 A D 2d 166, affd. 9 N Y 2d 878). However, this is not to say that any undisclosed relationship, no matter how peripheral, superficial or insignificant, compels the same result. “ Courts are loath to sustain belated claims of disqualification after an adverse award” (Matter of Atlantic Rayon Corp. [Goldsmith], 277 App. Div. 554, 556) and particularly should this be so where the arbitration proceeding is a lengthy and involved one extending over a period of several years as in this case. The type of relationship which would appear to disqualify is one from which it may not be unreasonable to infer an absence of impartiality, the presence of bias or the existence of some interest on the part of the arbitrator in the welfare of one of the parties.

While there was a “ relationship ” here between the respondent and the arbitrator, we find it not to be a disqualifying one. The transactions between them were isolated and involved nothing of such a nature as would cause Spear to act other than with the requisite impartiality. The nature and magnitude of the real estate company with which Spear was affiliated would make it most likely that at one time or another there would be some contact with one of the largest department stores in the City of New York. Whether or not Spear disclosed such relationship to the Tribunal Clerk is of no consequence. The rules of the arbitration association required a disclosure only if the circumstances were “ likely to create a presumption of bias ” or were such as would make the arbitrator believe “ might disqualify him as an impartial arbitrator.” In the light of the nature of the relationship a failure to disclose would not have been violative of the rules.

In view of the great reliance placed by appellant upon the ease of Matter of Milliken (supra) it should be noted that there the relationship between one of the arbitrators and the attorneys for one of the parties was such that there could be no question but that it could reasonably be inferred that there was present partiality or bias. In addition, there the arbitrator had not only failed to disclose the true relationship but had also made affirmative statements concerning the same which were less than the truth and—one must conclude — were designed to mislead. Hot so in this ease.

We can apply to this ease the language of this court in Matter of Meineg Co. (Katakura & Co.) (241 App. Div. 406, 407, affd. 266 N. Y. 418) where it was stated: “If we were to give heed to the contentions of every unsuccessful litigant, based upon the flimsy ground [s] assigned here, it would be well nigh impossible to carry out that part of the agreement pertaining to arbitration ”.

Accordingly, the order entered on June 28, 1961 granting respondent’s motion to confirm the arbitrators’ award and denying the appellant’s cross motion to vacate the said award should be affirmed, with costs.