F. Supp. at 82 (citations omitted). In light of the considerable
deference given to an arbitrator's decisions, together with the
facts presented herein, it is clear that a reasonable basis
existed for the arbitrator's decision to deny the request for
Defendants' reliance on Tube & Steel Corp. of Am. v. Chicago
Carbon Steel Prods., 319 F. Supp. 1302 (S.D.N.Y. 1970), in which
the court vacated an arbitration award on the basis of an
arbitrator's refusal to grant an adjournment, is misplaced.
Among the key differences between that case and the action at
bar are: (1) the arbitrators in Tube & Steel unilaterally moved
the agreed upon date to a time at which they knew respondents
were unavailable; (2) petitioner agreed to the adjournment; and
(3) the arbitrators conducted the hearing in the absence of
respondents. Id. at 1303. In marked distinction to those
circumstances, defendants herein had twice been granted
adjournments, and the third date set for the arbitration was
suggested by defendants. Simply stated, defendants fail to come
close to demonstrating the degree of impropriety noted by the
district court in Tube & Steel. See id.
Although defendants argue that a change in counsel
immediately prior to the hearing mandated an adjournment, it is
difficult to ascertain how, in light of the time and expense
incurred in preparation for the hearing, a change in counsel
adversely affected the final resolution. Moreover, the fact
that defendants were given a third day of hearings, more than
two weeks after the initial dates, which allowed for the
collection of further testimony in support of their position,
weighs very strongly against any finding of misconduct by the
In light of the facts presented, this Court finds that there
is more than sufficient evidence to support the arbitrator's
decision to refuse defendants' request for a further
adjournment. See e.g., Storey, 685 F. Supp. at 82; Fairchild,
516 F. Supp. at 1313; Dan River, Inc. v. Cal-Togs, Inc.,
451 F. Supp. 497, 503-4 (S.D.N.Y. 1978). Accordingly, defendants
have failed to demonstrate that the arbitrator's denial of
their request constituted misconduct. See 9 U.S.C. § 10(a)(3).
Where the issue is whether the arbitrator properly exercised
authority actually delegated to him, the Second Circuit has
held that "if an arbitrator offers even a barely colorable
justification for [the] decision, we will not vacate it on the
basis of a claim [that] he exceeded his authority by
misinterpreting the parties' contract." U.S. Steel, 753 F.2d at
253 (citing Advance Publications, Inc. v. Newspaper Guild,
616 F.2d 614, 617 (2d Cir. 1980)). Such a holding reflects the rule
that "arbitrators must have broad authority to interpret the
contracts they apply." Id. Defendants contend that the
arbitrator exceeded the scope of his authority by awarding
plaintiffs a sum which was based in part on what defendants'
allege to be capital contributions, which, it is argued, was
inconsistent with the arbitration provision contained in the
parties' 1990 agreement. More particularly, defendants argue
that the award was actually based upon a provision contained in
the parties' 1986 agreement, which was not permitted by the
arbitration clause contained in the 1990 agreement. Thus,
defendants maintain that "[i]t is a reasonable inference" that
$200,000 of the $620,000 award was assessed as a result of
"disparate capital contributions." See Defendants' Memo. at 15.
The Court first notes that nothing in the award itself
indicates that the amount was based on the 1986 Shareholder
Agreement. It is solely defendants' "inference" which is
advanced as a basis for this argument. Moreover, defendants
argued that same point at the arbitration, see Donley Aff. at
exhibit H, and thus it is clear that the arbitrator was fully
aware of defendants' position at the time of his award. To the
extent that defendants challenge the arbitrator's
interpretation of the agreements between the parties, this
Court is without authority to vacate on that basis, absent a
shred of evidence to support a finding of one of the grounds
listed in 9 U.S.C. § 10. See United Steelworkers of Am. v.
Wheel & Car Corp., 363 U.S. 593, 599, 80 S.Ct. 1358, 1362, 4
L.Ed.2d 1424 (1960) (holding, in the context of a labor
dispute, that "so far as the arbitrator's decision concerns
construction of the contract, the courts have no business
overruling him because their interpretation of the contract is
different from his"); see also Advance Publications v.
Newspaper Guild, 616 F.2d 614, 618 (2d Cir. 1980) (citation
In addition, even if this Court were interpreting the
parties' agreements de novo, plaintiffs' argument that the
arbitration clause in the 1986 agreement was not superseded by
the 1990 agreement is persuasive. See Plaintiffs' Reply Memo.
at 8. Accordingly, defendants' argument that the arbitrator
exceeded his authority is without merit.
Arbitrator's Award of a Penalty
Defendants further allege that $210,000 of the $620,000 award
was assessed as a penalty against defendants, and that such an
assessment is contrary both to the terms of their contract and
the laws of New York. The Court first notes that the 1990
Agreement between the parties provided for the imposition of
liquidated damages in the event of overcharges by defendants.
In addition, as was the case with defendants' other argument,
the allegation that the arbitration award includes a penalty is
based solely on defendants' speculation.
In any event, it is clear that the arbitrator was under no
duty to "disclose the rationale for [his] award."
Fahnestock & Co., Inc. v. Waltman, 935 F.2d 512, 516 (2d Cir.
1991) (citations omitted). That said, defendants' assertions
that punitive damages were included in the award, based on
speculation, is insufficient. Moreover, the Second Circuit has
recently indicated that where the parties agree to permit such
an award, there would not be misconduct by the arbitrator for
doing so. See id. (noting that "`parties are generally free to
structure their arbitration agreements as they see fit'")
(citations omitted). As noted above, the parties specifically
provided for liquidated damages in their 1990 Agreement. See
Donley Aff. at exhibit C. Accordingly, defendants' argument
that the arbitrator committed misconduct by the potential
inclusion of punitive damages in the award is without merit.
Finally, plaintiffs seek to recover the costs of personally
serving defendants, based on defendants' refusal to acknowledge
the original service by mail. See Fed.R.Civ.P. 4(c)(2)(D).
Defendants do not substantively oppose this application, and
inasmuch as costs are provided for by Rule 4, see id.; Perkin
Elmer v. Trans Med. Airways, S.A.L., 107 F.R.D. 55, 60
(E.D.N.Y. 1985), plaintiffs' motion is granted.
For the reasons stated above, plaintiffs' motion for summary
judgment, pursuant to Rule 56 of the Federal Rules of Civil
Procedure, to enter judgment upon the arbitration award,
see 9 U.S.C. § 9, is granted. For the same reasons, defendants'
motion to vacate the arbitration award is denied. Finally,
plaintiffs' motion for the costs of personal service is
granted. See Fed.R.Civ.P. 4(c)(2)(D). Plaintiffs are directed
to submit a judgment consistent with this decision within two
weeks of the date of this Order.