What's happening
This bill amends arbitration law to require disclosure of arbitrator conflicts and ensures only neutral third party arbitrators can decide disputes.
Why it matters
Strengthens transparency and fairness in arbitration. by requiring arbitrators to disclose any financial or personal interests, or substantial relationships, that could affect their impartiality—helping parties make informed decisions about who judges their dispute.
Limits the use of biased arbitrators by voiding contract clauses. that would force parties to accept non-neutral arbitrators, ensuring that only neutral third parties can serve unless all parties agree after a dispute arises.
Creates clear grounds for challenging arbitration awards. If an arbitrator fails to disclose conflicts or a party objects in a timely manner to a disclosed conflict, courts may vacate the arbitration award, giving parties legal recourse if the process is compromised.
Prevents parties from waiving the right to a neutral arbitrator. before a dispute arises, closing loopholes that companies or stronger parties might use in contracts to predetermine a favorable (and potentially biased) arbitrator.
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Who cares
Arbitrators
They would have to investigate and disclose potential conflicts before accepting appointments and continue disclosing relevant facts throughout proceedings.
- Likely concerns
Parties to arbitration agreements
They could challenge awards over arbitrator conflicts or nondisclosure, but would risk waiving objections to disclosed conflicts if they do not object before the hearing begins.
Arbitration organizations
Contract language requiring their use would be void if they do not meet the bill’s neutrality standard, while the underlying requirement to arbitrate would remain valid.
New York courts
They could vacate awards over failures to disclose required facts and would apply a presumption of evident partiality to certain undisclosed interests or relationships.
Headline styles
Ban Biased Arbitrators
Plain English, a few words. Used as the page title.
Sponsors
History
- Ordered to third reading cal.137
- Advanced to third reading cal.76
- Reported
- Referred to judiciary
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Ban Biased Arbitrators
In Senate Committee · Judiciary · Sponsor Luis R. Sepúlveda
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3337
2019-2020 Regular Sessions
IN ASSEMBLY
January 29, 2019
Introduced by M. of A. DINOWITZ, GOTTFRIED, SEAWRIGHT, STIRPE -- read once and referred to the Committee on Judiciary
AN ACT to amend the civil practice law and rules, in relation to grounds for vacating an arbitration award on the basis of partiality of the arbitrator
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Article 75 of the civil practice law and rules is amended by adding a new section 7500 to read as follows:
§ 7500. Definitions. As used in this article:
(a) "Arbitration" means a form of dispute resolution that is an alternative to litigation, in which the parties agree to be bound by the determination of a neutral third party arbitrator.
(b) "Neutral third party arbitrator" means an arbitrator or panel of arbitrators each of whom does not have an undisclosed known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party, counsel, or representative of a party.
§ 2. Section 7501 of the civil practice law and rules, as amended by chapter 532 of the laws of 1963, is amended to read as follows:
§ 7501. Effect of arbitration agreement. A written agreement to submit any controversy thereafter arising or any existing controversy to arbitration is enforceable without regard to the justiciable character of the controversy and confers jurisdiction on the courts of the state to enforce it and to enter judgment on an award; provided, however, that any language requiring the controversy be submitted to an arbitrator or arbitration organization that is not a neutral third party arbitrator, as that term is defined in subdivision (b) of section seventy-five hundred of this article, shall be deemed void; provided that it shall be valid with respect to the requirement that the controversy be arbitrated. The requirement that the controversy be heard by a neutral third
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07683-01-9
A. 3337 2
party arbitrator may not be waived by party prior to the service on such party of a demand for arbitration. Upon disclosure pursuant to section seventy-five hundred five-a of this article of a known, direct, and material interest in the outcome of the arbitration proceeding or a known existing and substantial relationship with a party, counsel, or representative of a party, a party shall be deemed to have waived any objection to the arbitrator or composition of any arbitration panel, by failing to raise same prior to the commencement of the arbitration hearing. In determining any matter arising under this article, the court shall not consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits of the dispute.
§ 3. The civil practice law and rules is amended by adding a new section 7505-a to read as follows:
§ 7505-a. Disclosure by arbitrator. (a) Before accepting appointment, an individual who is requested to serve as an arbitrator, after making a reasonable inquiry, shall disclose to all parties to the agreement to arbitrate and the arbitration proceeding and to any other arbitrators any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding, including:
(1) a financial or personal interest in the outcome of the arbitration proceeding; and
(2) an existing or past relationship with any of the parties to the agreement to arbitrate or the arbitration proceeding, their counsel or representatives, a witness, or another arbitrator.
(b) An arbitrator has a continuing obligation to disclose to all parties to the agreement to arbitrate and the arbitration proceeding and to any other arbitrators any facts that the arbitrator learns after accepting appointment which a reasonable person would consider likely to affect the impartiality of the arbitrator.
(c) If an arbitrator discloses a fact required by subdivision (a) or (b) of this section to be disclosed and a party timely objects to the appointment or continued service of the arbitrator based upon the fact disclosed, the objection may be a ground for vacating an award made by the arbitrator.
(d) If the arbitrator did not disclose a fact as required by subdivision (a) or (b) of this section, upon timely objection by a party, the court may vacate an award.
(e) An arbitrator appointed as a neutral arbitrator who does not disclose a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party is presumed to act with evident partiality.
§ 4. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.