Morrison Cohen Secures Reversal of Rent Reset Arbitration Award for Carnegie House Tenants Corporation

On September 3, 2026, Morrison Cohen secured a full reversal at the Appellate Division, First Department on behalf of client Carnegie House Tenants Corporation, the cooperative owner of 100 West 57th Street, in a ground lease rent reset dispute.

The dispute stemmed from an arbitration award that set a new annual ground rent for the cooperative at $24,602,184 — up from $4,360,587 — based on a $301,250,000 land valuation. The cooperative moved to vacate the award, arguing that the panel's neutral umpire had engaged in undisclosed communications with the landlord's counsel about a paid position on an unrelated appraisal proceeding, then gave an incomplete account of those contacts, and later offered to decline the outside role if the cooperative withdrew its recusal request. The Supreme Court found that the umpire’s conduct “clearly compromised the integrity of the arbitral process,” but nonetheless declined to vacate the award.

Reversing, the Appellate Division first recognized that the Supreme Court had applied an incorrect standard from a case decided under the Federal Arbitration Act.  From there, the Appellate Division held that the cooperative met its burden to show "the appearance of bias from which a conflict of interest may be inferred," and further held that this appearance of partiality carried through to the panel's subsequent rulings, including a last-minute order striking the cooperative's expert appraisals and a compressed hearing schedule imposed once the cooperative sought the umpire's removal in court.

Quoting the Court of Appeals, the panel emphasized that “it is imperative that the integrity of the process, as opposed to the correctness of the individual decision, be zealously safeguarded.” The Court vacated the award in full and remanded the matter to a new arbitration panel.

The Morrison Cohen team was led by Gayle Pollack, Hon. David B. Saxe (Ret.), Jeremy Weinstein and Esti Ness.