49 N.Y.2d 842 (1980)

To vacate an arbitration award based on bias, there must be proof of either actual bias or an appearance of bias directly related to the arbitration proceedings; a later, unrelated appointment of the arbitrator by one of the parties is insufficient.

Summary

Harvey Kornit sought to vacate an arbitration award in favor of the Plainview-Old Bethpage Central School District, alleging bias on the part of the arbitrator. Kornit argued that the arbitrator’s subsequent appointment as a hearing officer for the school district created an appearance of impropriety. The New York Court of Appeals affirmed the lower court’s decision, holding that Kornit failed to provide sufficient evidence linking the arbitrator’s appointment to the prior arbitration proceedings in a manner that demonstrated bias or a conflict of interest. The Court emphasized that vacating an arbitration award requires proof of either actual bias or an appearance of bias directly related to the case.

Facts

Harvey Kornit was involved in an arbitration proceeding with the Plainview-Old Bethpage Central School District. The arbitration award was issued on January 31, 1978. Kornit’s request for reconsideration of the award was denied by the arbitrator on March 6, 1978. On March 20, 1978, the arbitrator was appointed as a hearing officer for the school district in matters unrelated to Kornit’s arbitration. Kornit then sought to vacate the arbitration award, claiming the arbitrator’s later appointment created an appearance of bias.

Procedural History

After the initial arbitration award and the arbitrator’s subsequent appointment as a hearing officer for the school district, Kornit applied to vacate the arbitration award. The lower court denied Kornit’s application. Kornit appealed to the Appellate Division, which affirmed the lower court’s decision. Kornit then appealed to the New York Court of Appeals.

Issue(s)

Whether the arbitrator’s subsequent appointment as a hearing officer for the school district, after issuing an arbitration award in favor of the district, constitutes sufficient evidence of bias or appearance of bias to warrant vacating the arbitration award.

Holding

No, because there was no evidence to relate the appointment back to the arbitration proceedings in such a manner as to permit an inference of conflict of interest or bias in favor of the school district; nor was there any claim that the award itself was the result of actual bias.

Court’s Reasoning

The Court of Appeals affirmed the Appellate Division’s decision, emphasizing the lack of evidentiary proof connecting the arbitrator’s later appointment to the arbitration proceedings. The Court stated, “Even if there were no fatal procedural deficiencies in appellant’s application to vacate the award in arbitration, we agree with the Appellate Division that there is no evidentiary proof in this record of any ‘appearance of bias’ on the part of the arbitrator, to say nothing of proof of actual bias which would be required to warrant a vacatur of the award.” The Court highlighted that the appointment occurred after the arbitration award was made and the request for reconsideration was denied. The key point was the absence of any evidence linking the appointment to the arbitration proceedings in a way that would suggest a conflict of interest or bias. The court requires more than a temporal connection; there must be a substantive link suggesting the arbitrator’s impartiality was compromised during the arbitration itself. The decision underscores the importance of demonstrating a direct connection between the alleged bias and the arbitration process to justify vacating an award, emphasizing the policy of upholding arbitration decisions unless clear impropriety is shown.