Court Confirms Arbitral Award After the Party that Initially Compelled the Arbitration Lost and was Forced to Pay Costs and Fees

On January 14, 2024, Justice Margaret A. Chan denied a motion to vacate an arbitral award brought by a party that had previously moved to compel arbitration in the first place. The decision in Skyline Steel, LLC v. PilePro LLC, et al., Index No. 650531/2015, noted that petitioner Skyline Steel had first initiated the matter by moving to stay arbitration. Respondent PilePro opposed that motion and successfully cross-moved to compel arbitration. The parties then proceeded to arbitration under JAMS Expedited Procedures. However, after PilePro lost in arbitration and was forced to pay costs and fees, it returned to court with a motion under CPLR 7511 to vacate the arbitral awards, arguing among other things that the arbitration panel exceeded its authority. The Court rejected that motion, finding that the arbitration panel had carefully considered the evidence, made logical rulings, and acted within its authority when it awarded Skyline more than $200,000 in fees and costs.

The Court explained, in part:

There must be an ‘unmistakably clear’ expression of a party’s intention to waive the rule that parties are responsible for their own attorneys’ fees. . . . Here, although the Panel was not required to announce a prevailing party, there is no provision that prohibits the Panel from announcing a prevailing party. . . . [A]nd the parties agreed that, ‘[t]he costs and expenses of arbitration shall be born by the non-prevailing Party.’ . . . The Panel awarded Syline its litigation fees and expenses based on the parties’ clear intentions that the non-prevailing party would incur the costs of the arbitration as expressly agreed in the [agreement].

The attorneys at Schlam Stone & Dolan frequently litigate cases involving confirming and vacating arbitral awards. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.