WAS THIS ARBITRATION TOO MULTI-FACETED?

In Elul Diamonds Co. Ltd. v. Z Kor Diamonds, Inc., Z Kor Diamonds asked a court to confirm an $185,226 arbitration award which had been issued in its favor.

Arbitration awards are usually upheld as long as the arbitrator can offer a "barely colorable justification" for the outcome. Here, Elul Diamonds contested the arbitrator's "jurisdiction" -- or authority -- to entertain the dispute.

Both the New York County Supreme Court and Appellate Division, First Department, found the arbitrator's conclusion the dispute arose from a New York consignment transaction -- and was thus empowered to hear the case -- reasonable.

In any event, Elul lost the ability to object to the arbitrators' authority since it appeared in the case, "advanced substantive legal arguments," and interposed non-jurisdictional claims.

Was Elul stoned?

For a copy of the Appellate Division's decision, please use this link: Elul Diamonds Co. Ltd. v. Z Kor Diamonds, Inc.