I’ve previously blogged about issues surrounding the Agreement to Arbitrate and how that may be set aside in certain circumstances. But what about a case where the Agreement to Arbitrate is legally sufficient, but the arbitration itself was problematic?
In that case, the party taking issue with the arbitration would ask the court to “vacate” or toss out the decision stemming from the problematic arbitration. However, there are limited grounds for that type of relief.
There are certain statutory ground in New Jersey where vacating an arbitration decision may be appropriate:
(1)the award was procured by corruption, fraud, or other undue means
(2)the court finds evident partiality by an arbitrator; corruption by an arbitrator; or misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding
(3)an arbitrator refused to postpone the hearing upon showing of sufficient cause for postponement, refused to consider evidence material to the controversy, or otherwise conducted the hearing contrary to the statute, so as to substantially prejudice the rights of a party to the arbitration proceeding
(4) an arbitrator exceeded the arbitrator’s powers
New Jersey case law interpreted these conditions to mean that “…arbitration awards may be vacated only for fraud, corruption, or similar wrongdoing on the part of the arbitrators.” Tretina Printing, Inc. v. Fitzpatrick & Associates, Inc.
The idea of biased or partisan arbitration is conceptually inadmissible, and the law simply cannot allow any judicially enforceable arbitration proceeding to be anything other than an impartial proceeding which has appropriate appearances of impartiality.
Here are some examples of conduct to look out for that may sustain a claim to vacate an arbitration proceeding:
- An arbitrator fails to disclose a material interest in the outcome of the matter, or a relationship with a party or their lawyer
- An arbitrator expert, witness, or lawyer is subject to influence of one of the parties through nefarious means
- An arbitrator acts in a partisan or biased manner throughout the proceedings
- A party is not given notice or opportunity to be heard in Bais Din on a certain issue
- Decisions are based upon one-sided information provided by one of the parties, as opposed to taking both sides into consideration and fairly weighting the evidence
- An arbitrator may refuse to provide a party the opportunity to appear, or to oppose an application made
- A psak may be entered based on information an arbitrator learned from community members or other sources, without either party having brought the issue to the Bais Din for resolution
- Someone may be threatened with the loss of custody or financial relief to induce them not to challenge a psak or go to court
- Direct communication with a party, expert, or other witness without notice to both parties and opportunities to allow them to participate
The above are only some examples of potential misconduct, corruption, and abuse. Of course, every situation is different, and if you have a question as to whether a decision should be challenged, please speak to an attorney as soon as possible. In my next blog, I’ll discuss situations specific to custody proceedings that may warrant vacating an arbitration decision.
Eliana T. Baer is a contributor to the New Jersey Family Legal Blog and a partner in the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or email@example.com.