In Minkowitz v. Israeli, the Appellate Division set aside an arbitration award entered by an arbitrator who had also mediated the arbitrated issues for the parties in a family law matter. The court found the arbitrator exceeded his powers, thus justifying a vacation of the award under N.J.S.A. 2A:23B-23a(4).
The court did acknowledge that R. 1:40-2d(1) recognizes a “mediation-arbitration” process in which “after an initial mediation, unresolved issues are then arbitrated,” but held that such proceedings must be conducted by different neutrals. In the 10 pages devoted to a discussion of this issue, there is one saving phrase. The court stated, “based on our determination, absent the parties’ contract to the contrary, once a neutral assumes the role of mediator, he or she may not assume the role of arbitrator.” In the Minkowitz case, there had been a timely objection to the arbitrator’s continuing after a hiatus in the arbitration during which the arbitrator attempted to facilitate a settlement and then resumed his role as the arbitrator, and there was no agreement that he could continue in his arbitrator role. The facts of the case reveal, however, that there were few if any confidential materials supplied to the arbitrator, but rather, only an in-depth review of financial documents that was discussed with the parties. Some matters were settled, and some continued for eventual evaluation by the arbitrator.
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