IN RE: REDUCTONOX CORP. (2026)

Order, Supreme Court, New York County (Alexander M. Tisch, J.), entered on or about July 14, 2025, which denied the petition to vacate the arbitration award, deemed the motion to dismiss the petition to be a motion to confirm the arbitration award, and granted same, unanimously affirmed, without costs.

Supreme Court correctly denied petitioner's motion to vacate the arbitration award.  The well-reasoned award methodically considered the parties' agreements and provided a detailed analysis of the relevant issues.  Petitioner did not meet its burden of establishing by clear and convincing evidence that the arbitral panel manifestly disregarded the law (see Wien & Malkin LLP v. Helmsley–Spear, Inc., 6 NY3d 471, 479–481 [2006], cert dismissed 548 U.S. 940 [2006];  Matter of Long Beach Professional Firefighters Assn. v City of Long Beach, 214 AD3d 735, 736–737 [2d Dept 2023] ).

With respect to the breach of contract claim, the arbitral panel did not effectively eliminate or rewrite the provision in the subject Commercial and Manufacturing License Agreement requiring respondents to deliver turbines “suitable for connection to the E–C Power Oxidizer.”  Rather, it appropriately interpreted the term “suitable,” which was not defined in the agreement, in the context of the surrounding circumstances.  Those circumstances included the parties' mutual understanding that the project involved a “new generation of the KG2 turbine” and a “first-of-its-kind technology” that was in a “developmental phase” and that would require “substantial effort” over a “lengthy period” to achieve success with a “considerable risk of failure.”  “The interpretation of the applicable contract terms was within the province of the arbitrators, and the manifest disregard standard does not permit review of the panel's interpretation of the parties' contract even if we were to disagree with the interpretation” (Matter of Zurich Am. Ins. Co. v HBC U.S. Holdings, Inc., 234 AD3d 465, 466 [1st Dept 2025], lv denied 44 NY3d 911 [2026];  see Cantor Fitzgerald Sec. v. Refco Sec., LLC, 83 AD3d 592, 593 [1st Dept 2011] ).  This Court is also bound by the panel's factual findings that there were issues with both the turbines and with petitioner's own power oxidizer technology, as well as challenges related to the integration of these two technologies, and that petitioner failed to establish that it was the turbines that caused the project to fail (see Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 N.Y.2d 321, 326 [1999] ).

With respect to the fraudulent inducement claim, this Court is bound by the arbitral panel's findings regarding the “murk[iness]” of the circumstances of the alleged misrepresentations.  As the panel noted, petitioner failed to sufficiently prove the alleged misrepresentations, including what was said, where, when, and by whom (see Ferro Fabricators, Inc. v 1807–1811 Park Ave. Dev. Corp., 127 AD3d 479, 479–480 [1st Dept 2015] ).  This Court is also bound by the panel's findings regarding petitioner's failure to undertake any efforts to assure itself of the veracity of these claims.  Even if the arbitral panel erred in finding that the alleged misrepresentations were “more in the nature of ‘puffery’ than statements intended to impart specific false information,” this finding is not so obviously incorrect as to constitute a manifest disregard of law (see Wien & Malkin LLP, 6 NY3d at 480–481;  Sawtelle v. Waddell & Reed, 304 A.D.2d 103, 108 [1st Dept 2003] ).

With respect to damages, it is undisputed that the arbitral panel cited and applied the correct “reasonably certain” standard.  The panel's finding that the evidence presented by petitioner failed to demonstrate, to a reasonable degree of certainty, the amounts it actually spent on the project is not so obviously incorrect as to constitute a manifest disregard of law.  Petitioner's assertion that the burden is on respondents to disprove its damages calculations is based on a misreading of Gratz v. Claughton (187 F.2d 46 [2d Cir1951], cert denied 341 U.S. 920 [1951] ), the rule of which applies only where the precise amount of damages is unascertainable due to an uncertainty that “arises from the defendant's wrong” (see id. at 51–52).

Supreme Court acted properly in confirming the arbitration award notwithstanding the absence of a petition for such relief, as “there was no need for respondents to cross-petition for confirmation of the award since CPLR 7511(e) mandates an automatic confirmation upon denial of a motion to vacate or modify”

(Matter of White v Department of Law of State of N.Y., 184 A.D.2d 229, 230 [1st Dept 1992], lv denied 80 N.Y.2d 759 [1992] ).

We have considered petitioner's remaining arguments and find them unavailing.