*439Order, Supreme Court, New York County (James A. Yates, J.), entered January 28, 2003, which, inter alia, granted respondent’s cross motion to vacate the arbitration award against it and remanded the matter for a new arbitration before a new panel of arbitrators, unanimously affirmed, with costs.
The arbitration award against respondent was properly vacated in light of the appearance of impropriety created by the involvement of the arbitrators in the parties’ dispute over prepayment of arbitration fees, a matter in which the arbitrators had a direct financial interest (see Matter of Grendi v LNL Constr. Mgt. Corp., 175 AD2d 775 [1991]; see also Matter of Catalyst Waste-to-Energy Corp. of Long Beach [City of Long Beach], 164 AD2d 817 [1990], appeal dismissed 76 NY2d 1017 [1990]). Concur—Tom, J.P., Mazzarelli, Saxe and Marlow, JJ.