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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: July 11, 2020

Court Analyzes Rules Relating to Timely Moving to Confirm an Arbitral Award

On July 1, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Stairway Legacy Assets, L.P. v. McKenna Long & Aldridge, LLP, 2020 NY Slip Op. 32150(U), analyzing the timliness of a motion to confirm an arbitral award:

CPLR § 7510 states that, the court shall confirm an award upon application of a party made within one year after its delivery to him, unless the award is vacated or modified upon a ground specified in section 7511. In opposing the Petition, the Respondents argue that it is untimely because it was filed more than one year after the delivery of (i) the First Award in the Initial Arbitration or, in the alternative, of (ii) the Final Award on Remand. The arguments fail.

With respect to the former, the Respondents argue that the Petition is untimely because it was filed almost three years after the First Award in the Initial Arbitration was delivered. This argument is unavailing because the court expressly remanded the First Award back to the Panel for further proceedings to fix the precise amount of attorneys’ fees and the First Department affirmed the Supreme Court’s decision. Inasmuch as the court did not order the remand on fees until after the First Award was confirmed, the court’s order was nonetheless expressly addressed in the First Department’s affirmance, to wit:

Appeals from orders, same court and Justice, entered May 24, 2018, August 2, 2018, August 27, 2018 [i.e., the Attorney’s Fees Remand Order], and August 24, 2018, to the extent not abandoned, unanimously dismissed, without costs, as subsumed in the appeals from the aforesaid judgments.

Accordingly, this court will not reexamine the appropriateness of the remand.

The Respondents also argue that Stairway’s Petition is untimely because it was filed more than one year after the Panel delivered its award on remand. This argument is also unavailing. Although the Respondents seek to render this Petition untimely because it was filed on January 17, 2020 and the Second Order fixing the fees was issued on January 10, 2019, the award in the Remand Arbitration did not become final for purposes of CPLR § 7510 until the Final Award on Remand was issued in February of 2019.

Matter of Belli (Bender & Co.) is instructive here. Matter of Belli concerned a motion to confirm an arbitration award, and the respondents’ sole basis for opposing confirmation was that the application was untimely under CPLR § 7510. The initial award in that case was issued on October 29, 1963 but the award did not become final until December 10, 1963, when the arbitrators denied an application for modification. The application to confirm was made on November 25, 1964 – i.e., more than a year later than the date of the original award but less than a year after the arbitrators refused to modify the original award. The First Department upheld the award, explaining that, we believe that for the purposed of the limitation of one year the award should date from the final determination of the arbitrators. Here, although neither party appears to have sought any modification of the award after the Second Order was issued, the Panel’s Final Award on Remand was indisputably issued in February of 2019 and, therefore, this Petition was timely commenced on January 17, 2020.

Inasmuch as the Respondents rely on Wendt v BondFactor Co., LLC, in which the Appellate Division, Second Department, dismissed a petition to confirm an award as untimely, their reliance is misplaced. In Wendt, a former employee, together with another former employee, filed claims in arbitration against a former employer following termination. An arbitration hearing was held in November 2014 and on February 10, 2015, the arbitrator issued a partial final arbitration award which among other things, dismissed all of the petitioner’s claims. Although the other employee’s claim for attorneys’ fees and costs remained pending before the arbitrator, the award stated that it was final with respect to the matters addressed therein. On May 13, 2015, the arbitrator issued his final award, which dealt solely with the issue of the other employee’s attorneys’ fees and costs. The petitioner moved to vacate the award on August 7, 2015 pursuant to CPLR § 7511 and the respondents moved to dismiss the petition as untimely pursuant to CPLR § 751 l(a), which requires that an application to vacate or modify an arbitration award be made within ninety days after its delivery. The trial court denied the motion to dismiss the petition, and the Second Department reversed, explaining that the award was final with respect to the petitioner’s claims in February of 2015 since it dismissed all of his claims and indicated that it was final with respect to the matters addressed therein.

Putting aside the fact that Wendt addressed the applicable limitations period to modify or vacate awards under CPLR § 7511 and this is a proceeding to confirm and award under CPLR § 7510, the award in Wendt was unequivocally final with respect to the petitioner’s claims when it was issued in February of 2015, i.e., well before the final award was issued with respect to the other remaining claims in the arbitration. Here, by contrast, the Final Award on Remand was not issued until February 2019 and regardless of whether it expressly incorporated the findings made in the Second Order, the time period to confirm the Final Award on Remand did not run until February of 2020. In other words, the Petition, which was filed on January 17, 2020, is timely.

(Internal quotations and citations omitted).

Commercial litigation involves more than courts. Disputes often are–by agreement–decided by private arbitrators. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have a question regarding a dispute that is subject to an arbitration agreement.

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