WESTINGHOUSE ELECTRIC CORPORATION, PLAINTIFF, v. NEW YORK CITY TRANSIT
AUTHORITY, METROPOLITAN TRANSPORTATION AUTHORITY, DEFENDANT.
82 N.Y.2d 47, 623 N.E.2d 531, 603 N.Y.S.2d 404 (1993).
October 19, 1993
USCOA,2 No. 165 (1993 NY Int. 199)
Decided October 19, 1993
_________________________________________________________________
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Peter M. D'Ambrosio, for Plaintiff.
Ira J. Lipton, for Defendant.
The General Contractors Association of New York, Inc.; New York
Electrical Contractors Association, Inc.; General Building Contractors
of New York; and Port Authority of New York & New Jersey, amici
curiae.
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BELLACOSA, J.:
The issue in this case, certified to this Court by the United States
Court of Appeals for the Second Circuit so that we might resolve a
question of New York law, is whether New York public policy prohibits
an "alternative dispute resolution ("ADR") provision that authorizes
an employee of a party (the New York City Transit Authority and
Metropolitan Transportation Authority) to a contract dispute, where
such employee is personally involved in the dispute, (to) make
conclusive, final, and binding decisions on all questions arising
under the contract" (Westinghouse Elec. Corp. v NY City Transit Auth.,
990 F2d 76). We answer the certified question in the negative and
conclude that the challenged ADR provision, which expressly provides
for judicial review, does not in these circumstances violate New York
public policy.
I.
In 1983, Westinghouse Electric Corporation, a Pennsylvania
corporation, bid on, won and entered into a contract with the New York
City Transit Authority ("NYCTA") and the Metropolitan Transportation
Authority for the sale, delivery, and installation of power rectifier
equipment to five substations for the New York City subway system.
During the course of Westinghouse's performance under the contract,
numerous disputes arose between the parties concerning whether
SNIPPETS:
WESTINGHOUSE ELECTRIC CORPORATION, PLAINTIFF, v.
AUTHORITY, METROPOLITAN TRANSPORTATION AUTHORITY, DEFENDANT.
This opinion is uncorrected and subject to revision before publication in the New York
The issue in this case, certified to this Court by the United States Court of Appeals for the
ions on all questions arising under the contract" (Westinghouse Elec.
Corp. v NY City Transit Auth.,
We answer the certified question in the negative and conclude that the challenged ADR
During the course of Westinghouse's performance under the contract, numerous disputes arose
The alternative dispute resolution provision, article 8.03, provides:
In the event the Contractor and Authority are unable to resolve their differences concerning
If the Contractor protests the determination of the Superintendent, the Contractor may
oneous to evidence bad faith.
By letter dated November 3, 1988, Westinghouse notified Westfall that the NYCTA's failure to
Group (11 NY2d 128) and Matter of Siegel provide persuasive authority affecting the rationale
In Matter of Siegel, the parties designated a lawyer and an accountant of one of the parties
A dispute arose resulting in a demanded arbitration, but before a decision was rendered, one
Considerable authority thus supports the validity and enforceability of alternative dispute
Auth., 66 NY2d 341, 345, supra).
Following certification of a question by the United States Court of Appeals for the Second
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