federal courts in making evidentiary rulings, but need only
grant the parties a fundamentally fair hearing. Id. at 923.
Since the arbitration hearing here met that standard,
petitioners' claim must be rejected.
Petitioners argue that they were not given the opportunity to
obtain documents or records as provided by the New York Stock
Exchange Rules. Specifically, petitioners argue that because
the arbitrators failed to order Bear Stearns to search for and
produce the original documentation for the letter of
authorization relating to the $675,000 transaction, or the
October 23, 1986 letter relating to the change of address, the
arbitrators failed to consider pertinent and material evidence.
However, the arbitrators did in fact take into account Bear
Stearns' concession that it could not locate those original
documents in deciding the issue of whether Bear Stearns had in
fact received those documents. See Tr. at 186-87.
Petitioners also complain that Bear Stearns was not required
to produce "journal entries" relating to the transfer of
funds,*fn7 and that it failed to comply with the Panel's order
to produce pages from its internal procedures manuals relating
to change of address and letters of authorization. However,
since the petitioners had already presented other evidence
regarding Bear Stearns' practices and procedures relating to
transferring funds, see Tr. 324-44, the "journal entries" for
this transfer at best would have been cumulative to evidence
already in the record. See Tr. at 302-303. Moreover, the record
indicates that Bear Stearns represented to the Panel that it
had produced all pages from their manuals responsive to the
Panel's order, see Tr. at 197, 265, 370, and petitioners'
counsel stated at the arbitration that he was satisfied with
that representation. See id. at 370.
In sum, petitioners' claim that the hearing was unfair
amounts to no more than a disagreement with the arbitrators
rulings on the weight and relevancy of evidence. However, it is
well-settled that "the arbitrator is the judge of the
admissibility and relevancy of evidence submitted in an
arbitration proceeding." Hoteles Condado Beach, La Concha and
Convention Center v. Union De Tronquistas Local 901,
763 F.2d 34, 39 (1st Cir. 1985). For the reasons set forth above, the
Court finds no abuse of discretion in the rulings made, and
thus no basis for the claim that the hearing was unfair.
Moreover, even if the Panel erroneously excluded evidence,
this would not in itself provide a basis for vacating the award
absent substantial harm. Hunt v. Mobil Oil Corp., 654 F. Supp. 1487,
1512 (S.D.N.Y. 1987) (quoting Newark Stereotypers' Union
No. 18 v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d
Cir.), cert. denied, 393 U.S. 954, 89 S.Ct. 378, 21 L.Ed.2d 365
(1968)). No such harm occurred here. The Court has reviewed the
entire record, and concludes that the arbitrators' decision is
well supported and well within the properly exercised broad
discretion conferred upon the arbitrators.*fn8
Bear Stearns' cross-motion for sanctions pursuant to
Fed.R.Civ.P. 11 is denied. Petitioner's claims, although
ultimately unsuccessful, are nevertheless colorable. Moreover,
petitioner has submitted an affidavit which demonstrates an
adequate investigation into the factual and legal basis of the
claims. See Affidavit of David J. Armstrong, Esq. (April 12,
For the reasons set forth above, the petitioners' motion to
vacate is denied and the respondent's cross-motion seeking
confirmation of the award is granted. The cross-motion for
sanctions is denied. The arbitration award is confirmed. The
Clerk of the Court shall enter judgment accordingly and close
the above-captioned action.
IT IS SO ORDERED.