senate Bill S5798

2011-2012 Legislative Session

Provides for vacating of an arbitration award on the ground that the arbitrator was affiliated with a party, or has a financial interest in a party or the outcome

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to judiciary
Jun 16, 2011 referred to rules

S5798 - Bill Details

Current Committee:
Law Section:
Civil Practice Law and Rules
Laws Affected:
Amd ยง7511, CPLR

S5798 - Bill Texts

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Provides for the vacating of an arbitration award on the ground that the arbitrator was affiliated in any way with any party, or has a financial interest directly or indirectly in any party or in the outcome of the arbitration.

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BILL NUMBER:S5798

TITLE OF BILL:
An act
to amend the civil practice law and rules, in relation to grounds for
vacating an arbitration award on the basis of partiality of the
arbitrator

PURPOSE:
To clarify the intent and protect the purpose of the existing laws
regarding arbitration by creating a definition of the term arbitration.

SUMMARY OF PROVISIONS:
Amends Article 75 Civil Practice Law and Rules by adding a provision
to subdivision (b) (ii) of Section 7511 which adds the fact that an
arbitrator has been affiliated with any party or has a direct or
indirect financial interest in any party or in the outcome of the
arbitration, as grounds to vacate an arbitration award.

EXISTING LAW:
Requires an arbitrator to be neutral.

JUSTIFICATION:
The public policy in favor of arbitration which is codified in Section
7501 of the Civil Practice Law and Rules, is based upon the fact that
arbitration can be a more efficient and cost-effective method for
parties to resolve disputes. The presumption that an arbitration
clause is enforceable has, however, become a sword to wield against
parties of lesser means rather than a shield to protect against
unnecessary litigation.

Currently, a party must prove, either during the course of misconduct
by the arbitrator or after an award by an arbitrator is perceived to
be unfair, that the arbitrator was biased - even if the arbitrator
clearly has an economic
stake in the outcome of the dispute. This outcome is in direct
opposition to the reasons (efficiency and fairness) why arbitration
is favored. As arbitration is commonly thought to be a dispute
resolution procedure that occurs in front of a neutral third party,
codifying it as such will enforce the original intent of the law.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

LOCAL FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediate.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5798

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              June 16, 2011
                               ___________

Introduced by Sen. FUSCHILLO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the civil practice law and rules, in relation to grounds
  for  vacating  an  arbitration award on the basis of partiality of the
  arbitrator

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Subparagraph  (ii)  of  paragraph 1 of subdivision (b) of
section 7511 of the civil practice law and rules is amended to  read  as
follows:
  (ii)  partiality of an arbitrator appointed as a neutral, except where
the award was by confession; OR WHERE THE ARBITRATOR HAS BEEN AFFILIATED
IN ANY WAY WITH ANY PARTY TO THE ARBITRATION, OR ANY OF ITS SUBSIDIARIES
OR AFFILIATES; OR WHERE THE ARBITRATOR HAS A FINANCIAL INTEREST, DIRECT-
LY OR INDIRECTLY, IN ANY PARTY OR IN THE OUTCOME OF THE ARBITRATION; or
  S 2. This act shall take effect immediately.






 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09411-05-1

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