Arbitration is a popular method for resolving disputes without going to court. It involves a neutral third party, called an arbitrator, who listens to both sides and makes a decision, known as an arbitration award. In New York, the rules for confirming or rejecting an arbitration award are outlined in CPLR Article 75. Understanding these rules can help you navigate the process effectively.
What is an Arbitration Award?
An arbitration award is the decision made by an arbitrator at the end of an arbitration proceeding. It is binding and enforceable, much like a court judgment. However, it does not carry the formal force of law until a court first recognizes and approves the award.
Arbitration is commonly used in commercial disputes, employment matters, and other areas where parties seek a quicker, less formal resolution than traditional litigation. Our law firm has experience both obtaining and enforcing arbitration awards in New York and elsewhere.
The Process of Confirming an Arbitration Award
To confirm an arbitration award, a party must file a petition with the court. Here’s how the process works:
Filing the Petition: The party seeking confirmation files a petition in the appropriate court. This must be done within one year after the award is delivered (CPLR 7510).
Supporting Documents: Along with the petition, the party must provide the arbitration agreement, the award, and any other relevant documents.
Court Hearing: The court will schedule a hearing to review the petition. If the other party does not object, or if the court finds no reason to reject the award, it will issue an order confirming the award.
Outcome: Once confirmed, the arbitration award becomes a judgment of the court, which can be enforced like any other court judgment.
The Process of Vacating (i.e., Rejecting) an Arbitration Award
In some cases, a party may seek to vacate or reject an arbitration award. Thompson & Skrabanek has experience vacating arbitration awards in New York. This process involves:
Filing the Petition: The party seeking to vacate the award must file a petition in court within 90 days after receiving the award (CPLR 7511(a)).
Grounds for Vacating: The petition must state the grounds for vacating the award, such as corruption, fraud, or arbitrator misconduct (CPLR 7511(b)).
Supporting Evidence: The party must provide evidence supporting their claims. This may include affidavits, documents, or other proof.
Court Hearing: The court will hold a hearing to consider the petition. Both parties will have the opportunity to present their arguments.
Outcome: If the court finds that the award should be vacated based on the provided grounds, it will issue an order vacating the award. Otherwise, the award will remain in effect.
Common Grounds for Vacating an Arbitration Award
The New York CPLR Article 75 specifies several grounds on which an arbitration award can be vacated:
Corruption, Fraud, or Misconduct: If the arbitrator or a party engaged in corruption, fraud, or misconduct, the award can be vacated (CPLR 7511(b)(1)(i)).
Arbitrator Partiality: If there was evident partiality or bias by the arbitrator, the award can be vacated (CPLR 7511(b)(1)(ii)).
Exceeding Powers: If the arbitrator exceeded their powers or made a decision outside the scope of the arbitration agreement, the award can be vacated (CPLR 7511(b)(1)(iii)).
Other Statutory Grounds: Any other grounds specified by statute may also be used to vacate an award (CPLR 7511(b)(1)).
Conclusion
Understanding the process of confirming or rejecting an arbitration award under New York CPLR Article 75 is crucial for anyone involved in arbitration. Whether you’re seeking to enforce an award in a New York court or challenge the award, understanding the legal requirements and procedures can help you achieve your desired outcome. Contact us today for additional guidance. We can help ensure that you navigate the process smoothly and effectively.