Arbitration Award Confirmed Notwithstanding Assertion Of Unresolved Counterclaim By Respondent’s Affiliate

In an order dated June 11, 2024, Justice Joel M. Cohen confirmed an arbitration award under CPLR 7510, rejecting respondent’s argument that the award was deficient for failing to resolve a counterclaim by an affiliate with common management. The case is Royalty Coffee Beans LLC v. H&H Coffee Group Export Corp., Index No. 655425/2023.

The Court began by observing that “‘An award is deficient [for purposes of CPLR 751l(b)(l)(iii)] and subject to vacatur only if it leaves the parties unable to determine their rights and obligations, if it does not resolve the controversy submitted or if it creates a new controversy’ (Matter of Meisels v Uhr, 79 NY2d 526, 536 [1992]).” Slip op., pp. 2-3.

Respondent H&H Coffee Group Export Corp. opposed confirmation on the ground that the panel had failed to resolve a counterclaim that was based on petitioner RoyalCoffee Bean’s assertedly wrongful failure to order more coffee from H&H or its assignee, Grand Master Brands, LLC (“Grand Master”), with which H&H shared common ownership.

The award had been affirmed, upon H&H’s appeal, by a panel of five arbitrators from the Green Coffee Association, and H&H’s argument regarding RoyalCoffee Bean’s failure to order more coffee had been raised and rejected on that l appeal. Id., p. 3. Moreover, “although H&H made a request either to substitute as a co-Respondent . . . there is no evidence that that the Arbitrators granted that request . . . [and] Grand Master has not sought to intervene here, and is not a party to this special proceeding.” Id. In any event, “[t] he ‘controversy submitted’ to the Arbitrators by the two parties to the Arbitration - i.e., whether Royalty Coffee's election not to order more coffee from H&H or from its assignee, Grand Master -- was unambiguously resolved in Royalty Coffee's favor. The fact that the Final Award did not detail the rationale for the Arbitrators' unanimous decision does not provide a ground for vacating the award. (Bay Ridge Med. Group v Health Ins. Plan of Greater New York, 22 AD2d 807, 808 [2d Dept 1964]).” Id., pp. 3-4.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning arbitration or the confirmation of arbitration awards.