Grendi v. LNL Const. Management Corp

In Grendi v. LNL Const. Management Corp., 175 A.D.2d 775 [1st Dept 1995], one party claimed it could not afford the arbitration fees. The AAA Case Administrator asked the other party to advance the fees. Unfortunately, this was communicated to the panel itself. The panel was disqualified because "the petitioners should not have been placed in a position where they would feel compelled to accede to the AAA's request to pay the respondent's share of the arbitrator's fee for fear of adverse consequences". (id. at 775.) In Grendi, the mere fact that the arbitrator knew that a party had been asked to advance the fees for the opposing party was sufficient to call into question the arbitrator's impartiality. The Court recognized that Grendi was justified in fearing adverse consequences if it chose not to pay.