Schroder & Co. v. Block

Orders, Supreme Court, New York County (Diane A. Lebedeff, J.), entered on or about April 5, 2004, which, in a dispute between investors (appellants) and persons and firms in the securities industry (respondents), granted respondents’ application to confirm an arbitration award of the New York Stock Exchange, and denied appellants’ application to vacate the award, unanimously affirmed, with costs. After the fifth day of the hearing, appellants challenged the three-person panel because of the failure of the securities industry panelist to disclose that he was a part-time of counsel attorney to a law firm that listed among its clients several companies having the same parent as one of the respondents. Thereupon, the securities industry panelist withdrew and did not participate in the selection of his replacement (compare Matter of Morgan Guar. Trust Co. of N.Y. v Solow Bldg. Co., 279 AD2d 431 [2001], lv denied 96 NY2d 711 [2001]) or the determination of the award, and five more hearing days were conducted. We reject appellants’ argument that the entire panel should have been disqualified. On this record, which does not include the transcript of the 10-day hearing, appellants fail to show that any taint of partiality that may have been created by the participation of the original securities industry panelist (cf. Schmitz v Zilveti, 20 F3d 1043 [9th Cir 1994]; but cf. Hunt v Mobil Oil Corp., 654 F Supp 1487 [SD NY 1987]) was not dispelled by his withdrawal. We have considered appellants’ remaining contentions and find them to be without merit. Concur—Tom, J.P., Saxe, Nardelli, Catterson and Malone, JJ.