Edward Sims (Edward) (plaintiff) and Sam Krischer (defendant) were members of the Diamond Dealers Club (DDC), which consisted of members who buy and sell rare jewels. All members of the DDC agreed to abide by the organization’s bylaws and agreed that the DDC’s arbitration panel would be the exclusive forum for any dispute arising between members. Krischer sold diamonds to David Sims, Edward’s son, who had recently started a new corporation, Diamond Way Corp (Diamond Way). David had previously worked for Edward’s corporation, S & H Diamond Corp (S&H). David did not tell Krischer at the time of the sale that he was not still representing S & H. Shortly thereafter, Diamond Way’s inventory was stolen, resulting in the corporation’s bankruptcy. Because David still had not paid Krischer for the diamonds, their dispute went to DDC arbitration. The arbitrator held Edward liable for David’s debt to Krischer. Edward brought suit challenging the arbitration award in the New York Supreme Court. The supreme court vacated the award. Krischer appealed.