S T A T E O F N E W Y O R K
________________________________________________________________________
2742
2015-2016 Regular Sessions
I N A S S E M B L Y
January 20, 2015
___________
Introduced by M. of A. TITONE, COLTON, GOTTFRIED, BRONSON, LAVINE --
Multi-Sponsored by -- M. of A. ABINANTI, COOK, MONTESANO -- read once
and referred to the Committee on Judiciary
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. Article 75 of the civil practice law and rules is amended
by adding a new section 7500 to read as follows:
S 7500. DEFINITIONS. AS USED IN THIS ARTICLE:
(A) "ARBITRATION" MEANS A FORM OF DISPUTE RESOLUTION THAT IS AN ALTER-
NATIVE TO LITIGATION, IN WHICH THE PARTIES AGREE TO BE BOUND BY THE
DETERMINATION OF A NEUTRAL THIRD PARTY ARBITRATOR.
(B) "NEUTRAL THIRD PARTY ARBITRATOR" MEANS AN ARBITRATOR OR PANEL OF
ARBITRATORS EACH OF WHOM DOES NOT HAVE AN UNDISCLOSED KNOWN, DIRECT, AND
MATERIAL INTEREST IN THE OUTCOME OF THE ARBITRATION PROCEEDING OR A
KNOWN, EXISTING, AND SUBSTANTIAL RELATIONSHIP WITH A PARTY, COUNSEL, OR
REPRESENTATIVE OF A PARTY.
S 2. Section 7501 of the civil practice law and rules, as amended by
chapter 532 of the laws of 1963, is amended to read as follows:
S 7501. Effect of arbitration agreement. A written agreement to
submit any controversy thereafter arising or any existing controversy to
arbitration is enforceable without regard to the justiciable character
of the controversy and confers jurisdiction on the courts of the state
to enforce it and to enter judgment on an award; PROVIDED, HOWEVER, THAT
ANY LANGUAGE REQUIRING THE CONTROVERSY BE SUBMITTED TO AN ARBITRATOR OR
ARBITRATION ORGANIZATION THAT IS NOT A NEUTRAL THIRD PARTY ARBITRATOR,
AS THAT TERM IS DEFINED IN SUBDIVISION (B) OF SECTION SEVENTY-FIVE
HUNDRED OF THIS ARTICLE, SHALL BE DEEMED VOID; PROVIDED THAT IT SHALL BE
VALID WITH RESPECT TO THE REQUIREMENT THAT THE CONTROVERSY BE ARBI-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03699-01-5
A. 2742 2
TRATED. THE REQUIREMENT THAT THE CONTROVERSY BE HEARD BY A NEUTRAL THIRD
PARTY ARBITRATOR MAY NOT BE WAIVED BY PARTY PRIOR TO THE SERVICE ON SUCH
PARTY OF A DEMAND FOR ARBITRATION. UPON DISCLOSURE PURSUANT TO SECTION
SEVENTY-FIVE HUNDRED FIVE-A OF THIS ARTICLE OF A KNOWN, DIRECT, AND
MATERIAL INTEREST IN THE OUTCOME OF THE ARBITRATION PROCEEDING OR A
KNOWN EXISTING AND SUBSTANTIAL RELATIONSHIP WITH A PARTY, COUNSEL, OR
REPRESENTATIVE OF A PARTY, A PARTY SHALL BE DEEMED TO HAVE WAIVED ANY
OBJECTION TO THE ARBITRATOR OR COMPOSITION OF ANY ARBITRATION PANEL, BY
FAILING TO RAISE SAME PRIOR TO THE COMMENCEMENT OF THE ARBITRATION HEAR-
ING. In determining any matter arising under this article, the court
shall not consider whether the claim with respect to which arbitration
is sought is tenable, or otherwise pass upon the merits of the dispute.
S 3. The civil practice law and rules is amended by adding a new
section 7505-a to read as follows:
S 7505-A. DISCLOSURE BY ARBITRATOR. (A) BEFORE ACCEPTING APPOINTMENT,
AN INDIVIDUAL WHO IS REQUESTED TO SERVE AS AN ARBITRATOR, AFTER MAKING A
REASONABLE INQUIRY, SHALL DISCLOSE TO ALL PARTIES TO THE AGREEMENT TO
ARBITRATE AND THE ARBITRATION PROCEEDING AND TO ANY OTHER ARBITRATORS
ANY KNOWN FACTS THAT A REASONABLE PERSON WOULD CONSIDER LIKELY TO AFFECT
THE IMPARTIALITY OF THE ARBITRATOR IN THE ARBITRATION PROCEEDING,
INCLUDING:
(1) A FINANCIAL OR PERSONAL INTEREST IN THE OUTCOME OF THE ARBITRATION
PROCEEDING; AND
(2) AN EXISTING OR PAST RELATIONSHIP WITH ANY OF THE PARTIES TO THE
AGREEMENT TO ARBITRATE OR THE ARBITRATION PROCEEDING, THEIR COUNSEL OR
REPRESENTATIVES, A WITNESS, OR ANOTHER ARBITRATOR.
(B) AN ARBITRATOR HAS A CONTINUING OBLIGATION TO DISCLOSE TO ALL
PARTIES TO THE AGREEMENT TO ARBITRATE AND THE ARBITRATION PROCEEDING AND
TO ANY OTHER ARBITRATORS ANY FACTS THAT THE ARBITRATOR LEARNS AFTER
ACCEPTING APPOINTMENT WHICH A REASONABLE PERSON WOULD CONSIDER LIKELY TO
AFFECT THE IMPARTIALITY OF THE ARBITRATOR.
(C) IF AN ARBITRATOR DISCLOSES A FACT REQUIRED BY SUBDIVISION (A) OR
(B) OF THIS SECTION TO BE DISCLOSED AND A PARTY TIMELY OBJECTS TO THE
APPOINTMENT OR CONTINUED SERVICE OF THE ARBITRATOR BASED UPON THE FACT
DISCLOSED, THE OBJECTION MAY BE A GROUND FOR VACATING AN AWARD MADE BY
THE ARBITRATOR.
(D) IF THE ARBITRATOR DID NOT DISCLOSE A FACT AS REQUIRED BY SUBDIVI-
SION (A) OR (B) OF THIS SECTION, UPON TIMELY OBJECTION BY A PARTY, THE
COURT MAY VACATE AN AWARD.
(E) AN ARBITRATOR APPOINTED AS A NEUTRAL ARBITRATOR WHO DOES NOT
DISCLOSE A KNOWN, DIRECT, AND MATERIAL INTEREST IN THE OUTCOME OF THE
ARBITRATION PROCEEDING OR A KNOWN, EXISTING, AND SUBSTANTIAL RELATION-
SHIP WITH A PARTY IS PRESUMED TO ACT WITH EVIDENT PARTIALITY.
S 4. This act shall take effect immediately.