## Facts

- Edward Sims and Sam Krischer were members of the Diamond Dealers Club (DDC) and were subject to DDC rules requiring arbitration as the exclusive forum for disputes between members.
- Sims’s son formed Diamond Way Corp. and bought diamonds from Krischer on credit, allegedly representing continued association with Sims’s business.
- Diamond Way’s inventory was reportedly stolen; the company went bankrupt, leaving Krischer unpaid.
- A DDC arbitration panel held Sims personally liable for his son’s debt, relying on evidence of a continuing relationship and a guaranty Sims had executed concerning his son’s DDC-related obligations.
- Sims participated in the arbitration after receiving notice, then petitioned under CPLR Article 75 to vacate the award, arguing lack of an obligation to arbitrate, expiration of the guaranty, lack of a business connection, and arbitral misconduct/partiality.
- The trial court vacated the award against Sims; the DDC appealed.

## Issues

1. Whether the award imposing personal liability on Sims was totally irrational or exceeded the arbitrators’ powers so as to permit vacatur under CPLR 7511.
2. Whether Sims, as a DDC member who participated in the arbitration without timely objection, was bound to arbitrate and waived challenges to arbitrability or jurisdiction.
3. Whether allegations of arbitrator misconduct or partiality justified vacatur.

## Decision

- The Appellate Division, First Department reversed the trial court and confirmed the arbitration award.
- The court held the award had a rational basis and was within the arbitrators’ authority.
- Sims’s participation without timely jurisdictional objection precluded later challenges to arbitrability or arbitral authority.
- Claims of misconduct and partiality were rejected as unsupported.
- The court permitted enforcement of a 15% surcharge included in the arbitration award.

## Legal Principles

- Judicial review of arbitration awards is narrowly limited; courts may not revisit the merits or reweigh evidence.
- An award will be upheld if it does not violate strong public policy, is not totally irrational, and does not exceed a specifically enumerated limitation on arbitral power.
- Arbitrators receive substantial deference in interpreting contracts, including guaranties; a plausible interpretation supported by the record will not be displaced by a court’s contrary view.
- A party who appears and participates in arbitration without timely objecting to arbitrability or jurisdiction generally waives those objections.
- Unsupported allegations of arbitral bias or misconduct do not justify vacatur.

## Conclusion

The court confirmed the DDC arbitration award against Sims, holding that the panel’s liability and guaranty determinations were rational and within its authority, that Sims waived arbitrability objections by participating without timely protest, and that unsubstantiated claims of bias or misconduct could not support vacatur.


Matter of Sims v. Siegelson, 246 A.D.2d 374, 668 N.Y.S.2d 20 (N.Y. App. Div. 1st Dep’t 1998)