Atlantic Purchasing, Inc. v. Airport Properties II, LLC

Summary

The New York Appellate Division, Second Department, affirmed an order denying Airport Properties II, LLC’s motion to vacate an arbitration award and granting Atlantic Purchasing, Inc.’s petition to confirm it. The court held that Airport waived its claim of arbitrator partiality by failing to object after learning of the arbitrator’s prior relationship with Airport’s counsel and continuing to participate in the arbitration. The court also found no evidence that the prior arbitration affected the arbitrator’s neutrality and remitted the matter for entry of an appropriate judgment.

Holdings

1. A party waives a claim that an arbitrator is not impartial when, after becoming aware of the basis for the alleged bias or partiality, it fails to object and continues participating in the arbitration.
2. The award was not subject to vacatur under CPLR 7511(b)(1)(ii) because there was no evidence that the prior arbitration affected the arbitrator's ability to remain neutral.

Questions Presented

1. Whether Airport waived its claim that the arbitrator was partial or lacked impartiality by failing to object after learning of the arbitrator's prior relationship and continuing to participate in the arbitration.
2. Whether the arbitrator's nondisclosure and alleged prior relationship provided a basis to vacate the award under CPLR 7511(b)(1)(ii).

Disposition

affirmed