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THE FACT THAT THE ARBITRATOR MADE ERRORS OF LAW DID NOT AFFECT THE VALIDITY OF THE AWARD BECAUSE THERE WAS A RATIONAL BASIS FOR THE RULING; ARBITRATION AWARDS ARE LARGELY UNREVIEWABLE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the fact that the arbitrator in this no-fault insurance dispute made errors of law does not negate the validity of the arbitrator’s ruling. As long as the arbitrator’s award has a rational basis it is largely unreviewable:

“[A]n arbitrator’s rulings, unlike a trial court’s, are largely unreviewable” … . “A court reviewing the award [*2]of a master arbitrator is limited to the grounds set forth in CPLR article 75” … . Significantly, a master arbitrator’s determination is not subject to vacatur by the courts on the basis of an error of law, including, “‘the incorrect application of a rule of substantive law,'” unless the master arbitrator’s determination is irrational … .

Here, regardless of any errors of law the arbitrator and master arbitrator made regarding burdens of proof, the master arbitrator’s determination to affirm the … award to the provider was rationally based on the conclusion that [the] minor delay in providing the insurer with notice of the accident was reasonably justified because [the injured party] was a passenger in the vehicle involved in the accident and, thus, was not making a claim to her own insurance company (see 11 NYCRR 65-3.5[l]). Because the master arbitrator’s affirmance of the … award had a rational basis, and “‘[i]t is not for the court to decide whether the master arbitrator erred in applying the applicable law,'” the petition to vacate the master arbitrator’s award should have been denied and the master arbitrator’s award confirmed … . Matter of American Tr. Ins. Co. v Atlantic Med. Care, P.C., 2025 NY Slip Op 07297, Second Dept 12-24-25

Practice Point: Arbitration awards are largely unreviewable by the courts. Errors of law are ignored if there is a rational basis for the ruling.

 

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