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CSP Technologies, Inc. v. Hekal

NEW YORK SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT


December 18, 2008

CSP TECHNOLOGIES, INC., ET AL., PETITIONERS-APPELLANTS,
v.
IHAB M. HEKAL, RESPONDENT-RESPONDENT.

Order, Supreme Court, New York County (Sheila Abdus-Salaam, J.), entered January 11, 2008, which granted the petition to vacate a prior order of the arbitrators directing exchange of information, only to the extent of granting respondent's cross motion for discovery to be conducted under the supervision of the arbitrators, unanimously reversed, on the law, with costs, the petition and the cross motion denied, and this proceeding dismissed.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Mazzarelli, J.P., Gonzalez, Catterson, McGuire, Acosta, JJ.

117053/06

The court lacked authority to entertain the petition to review an intermediary ruling of the arbitrators on a procedural matter (see Mobil Oil Indonesia v Asamera Oil [Indonesia], 43 NY2d 276 [1977]; Avon Prods. v Solow, 150 AD2d 236, 239-240 [1989]). Such intervention is not authorized by the CPLR, and is proscribed as a matter of policy. The relief "would disjoint and unduly delay the proceedings, thereby thwarting the very purpose of" arbitration (Mobil Oil Indonesia, 43 NY2d at 282).

With respect to the cross motion, the court erroneously determined that the arbitrators lacked authority to direct the parties to produce documents. Although the CPLR does not itself authorize arbitrators "to direct the parties to engage in disclosure proceedings" (De Sapio v Kohlmeyer, 35 NY2d 402, 406 [1974]), no statute or policy prevents parties from charting their own procedural course in arbitration by voluntarily agreeing to abide by the rules of the arbitral forum, including, as in this case, rules permitting the arbitrators to direct the exchange of information (see Commercial Arbitration Rule R-21(a)(I) of the American Arbitration Association). The strong policy of this State requires the courts to enforce arbitration agreements as written, and to leave to the arbitrators the interpretation and application of the procedural rules of the arbitral forum (Matter of Sobel [Charles Schwab & Co., Inc.], 37 AD3d 877, 878 [2007]; Matter of Faberge, Inc. [Felsway Corp.], 149 AD2d 369, 370 [1989], lv denied 74 NY2d 610 [1989]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

20081218

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