NY Court Upholds Bifurcated Arbitration Procedure By Rabbinical Tribunal

In Shimon v. Silberman, (NY Sup. Ct., Dec. 21, 2009), a New York trial court, in a decision it described as involving an issue of first impression, confirmed an award made in a bifurcated arbitration proceeding conducted by the Shevet Halevi Rabbinical Court. The award involved a $465,000 unpaid balance on a promissory note from a loan used by the Sanz-Klausenber Chassidic Community to complete construction of the new building for the Sanz girls school. In an initial ruling, the Rabbinical Court found liability, but postponed determining the amount until an additional hearing was held. At that point respondents informed the Rabbinical Court that they would not attend any future hearing. A subsequent decision established the amount of liability and ordered it paid within a month. The state trial court rejected respondents' arguments that the bifurcated process amounted to a change in an initial arbitration award without following the statutory procedures for modification. Respondents also argued that the award was not served on them as required by statute. However the court held that no prejudice had been shown by respondents that would justify the award being vacated.