New York State Assembly

 
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A05610 Summary:

A05610 Actions:

A05610 Committee Votes:

Committee:JUDICIARY   Chair:Dinowitz      
DATE:02/27/2019AYE/NAY:21/0  Action: Favorable         
Dinowitz
Aye
Palumbo
Aye
Titus
Aye
Montesano
Aye
Lavine
Aye
Goodell
Aye
Zebrowski
Aye
Norris
Aye
Weprin
Aye
Walsh
Aye
Braunstein
Aye
Byrnes
Aye
Simotas
Aye
Quart
Aye
Buchwald
Aye
Steck
Aye
Seawright
Aye
Joyner
Aye
Abinanti
Aye
Wright
Aye
Wallace
Aye

A05610 Floor Votes:

A05610 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A5610
 
SPONSOR: Weinstein (MS)

 
TITLE OF BILL:  An act to amend the civil practice law and rules, in
relation to vacating arbitration awards on the basis of arbitrator
disregard of the law
 
 
PURPOSE OF BILL:
 
To permit an arbitration award to be vacated as a result of an
arbitrator's manifest disregard of the law.
 
 
SUMMARY OF PROVISIONS OF BILL:
 
This bill would add a new subdivision to CPLR 7511, which would permit
an arbitration award to be vacated due to arbitral manifest disregard of
law.
 
 
EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
 
This bill would provide needed clarification to CPLR 7511 and the limit-
ed circumstances under which an arbitration award may be vacated.
 
 
JUSTIFICATION:
 
Under existing law, an arbitration award can be vacated if "completely
irrational", a high standard for the losing arbitral litigant to over-
come. As noted by Professor Siegel, even an arbitrator's "manifest
disregard of the law" is not a basis for vacating an award in New York
State. New York Practice, Firth Edition, Sec. 602. While arbitration can
be a useful tool for persons to settle disputes in a more timely and
cost-effective way, such resolutions should not be totally divorced from
applicable standards of law.
 
Thus, a measured and prudent way in which arbitrators should be required
to reasonably follow applicable legal standards in resolving disputes
would be permit awards to be vacated if arbitrators evidence a "manifest
disregard of the law".
 
This standard has been used in federal practice for many years as a
basis to vacate arbitration awards. In fact, the Circuit Court of
Appeals, Second Circuit has well-honed this standard as follows:
"...first, whether the governing law alleged to have been ignored by the
arbitrators was well defined, explicit, and clearly applicable, and,
second, whether the arbitrator knew about the existence of a clearly
governing legal principle but decided to ignore it or pay no attention
to it".  
internal citations omitted Schwartz v. Merrill Lynch & Co.,
Inc., 665 F. 3d 444 (2011).
 
In setting such a clear standard of law for the vacating of arbitration
awards, this bill would provide greater clarity to the Courts in deter-
mining whether an award would be subject to vacatur due to failure to
follow applicable law. Such a standard would also compel arbitrators to
make a good faith and reasonable attempt to follow provisions of
substantive law, which they presently are not required to do.
 
 
LEGISLATIVE HISTORY:
 
2017-18: A.1370/S.6050 - PA/S.Codes
2016: A.9993 - PA
 
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
 
None.
 
 
EFFECTIVE DATE:
This bill shall take effect on the one hundred eightieth day after it
shall become law.

A05610 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5610
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 14, 2019
                                       ___________
 
        Introduced by M. of A. WEINSTEIN, DINOWITZ, SEAWRIGHT, COLTON, ABINANTI,
          WEPRIN,  STECK,  M. G. MILLER, ENGLEBRIGHT, GOTTFRIED, D'URSO, JAFFEE,
          ZEBROWSKI, TAYLOR -- Multi-Sponsored by -- M. of A. CAHILL,  SIMON  --
          read once and referred to the Committee on Judiciary
 
        AN  ACT to amend the civil practice law and rules, in relation to vacat-
          ing arbitration awards on the basis of arbitrator disregard of the law
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Subparagraph  (iv)  of  paragraph 1 of subdivision (b) of
     2  section 7511 of the civil practice law and rules is amended  and  a  new
     3  subparagraph (v) is added to read as follows:
     4    (iv) failure to follow the procedure of this article, unless the party
     5  applying  to vacate the award continued with the arbitration with notice
     6  of the defect and without objection[.]; or
     7    (v) the arbitrator evidenced  a  manifest  disregard  of  the  law  in
     8  rendering the award.
     9    § 2. This act shall take effect on the one hundred eightieth day after
    10  it shall have become a law.
 
 
 
 

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00874-01-9

A05610 LFIN:

 
NO LFIN

A05610 Chamber Video/Transcript: