Matter of Stewart Tabori & Chang, Inc.
| Decision Date | 24 April 2001 |
| Citation | 282 A.D.2d 385,723 N.Y.S.2d 492 |
| Parties | In the Matter of the Arbitration between STEWART TABORI & CHANG, INC., et al., Appellants-Respondents, and ANDREW STEWART, Respondent-Appellant, et al., Respondents. |
| Court | New York Supreme Court — Appellate Division |
The motion court correctly confirmed the arbitration award in this commercial dispute, except to the extent the award gave respondent Stewart, the prevailing party, attorney's fees and disbursements. The fact that the attorney who made the closing argument on behalf of Stewart was a director of the American Arbitration Association, under whose auspices the arbitration was conducted, even if known to the arbitrators, would not have created reasonable cause to doubt the arbitrators' impartiality, or otherwise have afforded grounds to vacate the award, since, inter alia, it is undisputed that the attorney had no prior connection to any of the arbitrators and had no involvement in determining whether the arbitrators would receive future assignments (see, 9 USC § 10 [a]; Morelite Constr. Corp. v New York City Dist. Council Carpenters Benefit Funds, 748 F2d 79, 84). Nor was the award of damages for lost profits made in "manifest disregard" of applicable law (see, Folkways Music Publs. v Weiss, 989 F2d 108, 111-112). The award of attorney's fees and disbursements, however, was not authorized by the parties' agreement (cf., Matter of RAS Sec. Corp. [Williams], 251 AD2d 98) or by any statute or court rule, contrary to New York law (see, Matter of A. G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5), which the parties had expressly chosen to govern their agreement. That aspect of the award was therefore correctly vacated as made by the arbitrators, all attorneys, in manifest disregard of well-defined, explicit and clearly applicable New York law (see, Asturiana de Zinc Mktg. v LaSalle Rolling Mills, 20 F Supp 2d 670, 674-675). We further note that petitioners, who, prior to the rendering of the award, withdrew any claim to recover their own attorney's fees and objected to the submission of Stewart's claim for such relief, did not acquiesce in the arbitrators' consideration of that claim.
Finally, the motion court had jurisdiction under CPLR former 7502 (a), prior to its recent amendment (L 2000, ch 226, § 1), to entertain Stewart's motion to confirm the award, without his commencing a new proceeding. At the time Stewart moved to confirm, no prior order or judgment had been entered...
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