Review of Court Decisions - Dispute Resolution Journal - Vol. 22, No. 1
Originally from Dispute Resolution Journal
THIS review covers decisions in commercial, labor-management and accident claims cases, arranged under four headings: I. The Arbitration Clause and the Arbitrable Issue; II. The Enforcement of Arbitration Agreements; III. The Arbitrator and the Proceedings; and IV. The Award.
I. THE ARBITRATION CLAUSE AND THE ARBITRABLE ISSUE BROAD ARBITRATION CLAUSE — APPRAISAL CLAUSE IN SAME CONTRACT — NEW YORK
Where basic agreement between two groups of real estate investors providing for voluntary division of jointly owned property contained an unqualified broad arbitration clause, and supplementary agreement provided for appraisal by persons other than the arbitrators and gave one side power to reject appraisal, a dispute over the effect to be given the appraisal belonged to arbitrators and not to court. The agreement provided that in dividing the property, one group would set the values for a group of two properties, and the other group would make its selection. The difference in value would be contributed by the group taking the higher priced property. As the group setting the values owned a 55% interest in the properties, the payment to offset the difference in property value would also reflect that 10% difference in ownership. The supplementary provision by which the properties were to be appraised by independent evaluators also permitted the group setting the values to "adopt or reject" the values so reported. The court determined that the question as to whether the appraisal values could be rejected for all purposes or were binding for the purpose of determining the extent of financial adjustment occasioned by the 10% disparity in ownership was arbitrable under an unqualified broad clause. In dissent. Justice Steuer argued that a proper reading of the agreement compelled the conclusion that the parties intended the appraisal value to be final and binding for determining the adjustment due to the unequal ownership. Since this is what the contract meant, the valuations of the appraisers are as unarbitrable as if the contract had said so in just those words. Dimson v. Elghanayan, 275 N.Y.S.2d 178 (App. Div. 1st Dept. 1966).