Arbitrators and arbitral organizations enjoy immunity from civil liability for injuries sustained by a party to the arbitration stemming from the arbitrator's alleged failure to "control the proceedings," according to a New Jersey state appellate court.

In Malik v. Ruttenberg, No. A-6615-06T3, 2008 WL 552876 (N.J. Super. Ct. App. Div. Mar. 3, 2008), Malik was a party to an arbitration proceeding presided over by American Arbitration Association (AAA) arbitrator Liloia. During the contentious proceedings, Malik requested that opposing counsel be ejected from the proceedings. Liloia denied the request. Later, during a brief recess, outside the room where the proceedings were being held, Malik alleged that he was assaulted by opposing counsel.

Malik filed a complaint, alleging that the AAA and Liloia were negligent in failing to control opposing counsel during the proceedings. The AAA and Liloia moved for dismissal, asserting the arbitral immunity defense under N.J. Stat. Ann. § 2A:23B-14. The trial court judge denied the motion, holding that the AAA and Liloia had "a duty to control the proceedings, and the failure to do so fell outside the scope of arbitral immunity."

The Court quoted N.J. Stat. Ann. § 2A:23B-14(a), which expressly provides immunity from civil liability for arbitrators and arbitration organizations "to the same extent as a judge… acting in a judicial capacity." To the Court, there is "no more judicial function than controlling the proceedings," and such a function was clearly within the well-defined scope of arbitral immunity.

The Court held that the statute's immunity provision extended to the arbitral organization as well, since holding otherwise would "render the immunity afforded the arbitrator illusory." It also noted that every U.S. Circuit Court of Appeals that had considered the issue of arbitral immunity recognized that the doctrine applied to both arbitrators and arbitral organizations.