This is an action on a construction contract to recover, inter alia, damages for changed subsurface conditions, as well as extra and protest (disputed) work. Defendants, the City of New York and the Transit Authority, appeal from the denial of their motion for leave to amend the answer to assert the affirmative defense that, pursuant to an alternative dispute resolution (ADR) procedure to which the parties had agreed, plaintiff submitted its claims for extra costs to the Transit Authority’s chief engineer, whose determinations denying those claims are final and binding. Since, unlike the contractual provision at issue in Naclerio Contr. Co. v City of New York (116 AD2d 463, affd on mem below 69 NY2d 794), relied upon by the motion court, which was found not to be an ADR clause, the applicable provision here clearly is, explicitly stating that its purpose is to "prevent disputes and litigations”, and that the chief engineer’s determinations are "final and conclusive”, I would grant the motion for leave to amend.
In 1973, plaintiff, a joint venture, entered into a $33,000,000 contract with defendants for the construction of a portion of the proposed Second Avenue subway. Article 24 of the contract provided: "To prevent disputes and litigations, the [Chief] Engineer shall in all cases determine the classification, amount, quality, acceptability and fitness of the several kinds of work and materials which are to be paid for under this contract, shall determine every question in relation to the Words and the construction thereof and shall determine every question which may be relative to the fulfillment of this contract on the part of the Contractor. His determination and estimate shall be final and conclusive upon the Contractor, and in case any question touching this contract shall arise between the parties hereto such determination and estimate shall be a condition precedent to the right of the Contractor to receive any money under this Contract.”
*152In conjunction with this provision, the parties agreed in section 201.34 of the contract to an even more specific ADR procedure with regard to claims concerning changed and unanticipated subsurface conditions at the construction site: "Changed conditions, (a) Should the Contractor encounter during the progress of the work, subsurface conditions at the site materially differing from any shown on the contract drawings or indicated in the specifications or such subsurface conditions as could not reasonably have been anticipated by the Contractor and were not anticipated by the City or the Authority, which conditions will materially affect the cost of the work to be done under the contract, the attention of the Engineer must be called immediately to such conditions before they are disturbed. The Engineer shall thereupon promptly investigate the conditions. If he finds that they do so materially differ, or that they could not reasonably have been anticipated by the Contractor and were not anticipated by the City or the Authority, the contract may be modified with his written approval. However, the amount of an increase or decrease of cost resulting from such conditions shall be subject to the prior written approval of the Comptroller’s Chief Engineer. Any increase in costs resulting therefrom shall be subject to the Charter and Administrative Code provisions relating to additional work.”
Pursuant to the foregoing ADR procedure, plaintiff, in 1974, filed with the then chief engineer, Colonel John T. O’Neill, a claim of changed subsurface conditions with respect to the flow of underground water, which was affecting its dewatering soperation; soil subsidence; and the location and configuration of rock formations which were hampering excavation. In that same year plaintiff also submitted claims for protest work, which it believed was outside the scope of the contract, as well as other claims for the payment of extra work which the parties agreed the contractor would perform. At least two of the protest work claims were filed with O’Neill. One sought additional payment for the lowering of existing house sewers, which were obstructing construction. The other concerned the substitution of a particular type of pipe in lieu of the one prescribed by the contract. Subsequent to O’Neill’s death in 1978, plaintiff filed an extra work claim with respect to the protection of open trenches with George Ziegler, his successor as chief engineer.
In the course of considering the changed conditions claim, O’Neill visited the construction site on at least two occasions, *153and met several times with plaintiff’s representatives, as well as those of De Leuw, Gather & Company (DCC), the Transit Authority’s design and construction consultant on the project. O’Neill also consulted the Transit Authority’s field engineers, as well as three of its then deputy chief engineers, who assembled voluminous reports and correspondence; attended and informed him of meetings and correspondence which they had with DCC and plaintiff’s representatives; and prepared recommendations with respect to the claim.
In addition, O’Neill received documents submitted by plaintiff, as well as reports prepared by, among others, an independent geotechnical consulting firm, McClelland Engineers, Inc.; DCC; the Construction Division of the Transit Authority administering the contract; and Leonard Horn, a Transit Authority engineer not involved in the project.
The reports submitted by McClelland Engineers, the Construction Division and Horn all recommended denial of plaintiff’s changed conditions claim in its entirety. The two reports prepared by the deputy chief engineers concurred in that view, except that they recommended a monetary allowance for additional drilling costs due to unanticipated high rock at a particular location at the construction site. They also disagreed with DCC’s recommendation, which, contrary to its previous position, favored an additional payment to plaintiff with respect to the soil subsidence claim. DCC subsequently agreed with the deputy chief engineers that plaintiff should receive an allowance with respect to the high rock claim. Eventually, plaintiff received $15,000 on that claim.
Based on the foregoing, O’Neill, by letter dated July 21, 1977, denied plaintiff’s changed conditions claim except to indicate that the Transit Authority was in the process of further evaluating the high rock claim. He also accorded plaintiff an opportunity to present further evidence to substantiate the other aspects of its changed conditions claim, but it failed to do so. Although not contractually required, O’Neill, at plaintiff’s request, issued a November 14, 1977 letter setting forth in detail the basis of his determination.
Plaintiff’s extra and protest work claims were also thoroughly reviewed by the chief engineer. After completing his review, O’Neill, in two letters dated September 1, 1977 and March 6, 1978, denied the two protest work claims relating to the lowering of house sewers and the substitution of pipe. He determined that relocating house sewers was contract work *154governed by the unit price provision, and, while noting that the contract permitted the substitution of other pipe, found that plaintiffs subcontractor had already purchased a quantity of piping that "would have been sufficient”.
In an August 20, 1979 letter, Ziegler, to whom that particular claim had been submitted, denied plaintiffs extra work claim concerning the protection of open trenches, concluding that payment had already been made "under the terms of the contract and no other payment [could] be made.” Forty-five other claims submitted by plaintiff to the chief engineer for resolution under the contract’s ADR procedure were accepted.
In 1979, plaintiff commenced this action to recover, inter alia, damages for the same purported unforeseen subsurface costs and extra and protest work claims which the chief engineer had disallowed. Almost 5V2 years later, after joinder of issue and the commencement of a third-party action against DCC, but before the case was placed on the Trial Calendar and while it was still in the discovery stage, defendants moved for leave to amend their answer to assert as an affirmative defense the finality of the chief engineer’s determinations by reason of the ADR procedure set forth in article 24 and section 201.34 of the contract.
In opposing the motion, plaintiff, in part, contested the merits of defendants’ proposed affirmative defense by asserting, inter alia, that the chief engineer’s power under article 24 is limited to matters involving "measurement, quantification and interpretation” of the contract which arise during the course of the project; that other provisions in the contract indicate that the parties agreed to the judicial resolution of disputes; that the ADR procedure is void for want of mutuality in that defendants are purportedly not bound by the chief engineer’s determinations; and that, in any event, O’Neill’s determinations could not be final and binding because he had merely "rubber-stamped” the decisions, which were really those of his "remote subordinates”. Plaintiff also claimed that, in view of defendants’ purported gross laches, it would be prejudiced if leave to amend were granted, since it could no longer depose O’Neill, who had died, to determine if he had "actually played any part” in the denial of its claims.
The court denied the motion, based upon defendants’ unexplained laches in seeking to interpose their proposed ADR affirmative defense. Believing that O’Neill had died during the period that defendants allegedly had delayed in making their *155motion, the court concluded that if the amendment were granted plaintiff would be "severely hampered” in its attempt to ascertain whether O’Neill’s ADR determinations were, in fact, made by "lower level” Transit Authority personnel, as plaintiff claimed, rather than by O’Neill. The court also noted that, in any event, "various questions exist[ed] as to the sufficiency of the proposed amendment” in light of this court’s affirmance, without opinion, in Grow Tunneling Corp. v City of New York (111 AD2d 602). The court opined that a similar motion for leave to amend by the city had been denied in Grow "under facts and circumstances which were, if anything, more favorable to the City.”
Defendants thereafter sought renewal on the grounds that the court had been misled to believe that O’Neill had died after the service of their original answer, when, in fact, his demise had occurred over a year prior to the commencement of the action, and that subsequent to its denial of the motion the Court of Appeals, in Maross Constr. v Central N. Y. Regional Transp. Auth. (66 NY2d 341), had upheld as binding an ADR determination rendered pursuant to a clause similar to article 24 of the contract. The court granted renewal on the basis of having been misinformed as to the timing of O’Neill’s death, and, upon renewal, again denied the motion for leave to amend. Citing this court’s dictum in Naclerio Contr. Co. v City of New York (supra, 116 AD2d, at 464) that "it is contrary to both general principles of law and public policy to allow a party to a contract” to act as an ADR decision maker, it concluded that the proposed affirmative defense, insofar as it was predicated upon article 24 of the contract, was "insufficient as a matter of law.” This appeal is from that determination.
Courts have repeatedly enforced CPLR 3025 (b)’s prescription that leave to amend pleadings should be "freely given”. (See, e.g., Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959; McCaskey, Davies & Assocs. v New York City Health & Hosps. Corp., 59 NY2d 755, 757; Tankers Intl. Nav. Corp. v National Shipping & Trading Corp., 116 AD2d 40, 48.) Such relief should not be denied on the basis of the proposed amendment’s lack of merit unless the subject pleading is "palpably invalid”. (Holland Am. Cruises v Carver Fed. Sav. & Loan Assn., 60 AD2d 545; accord, Shepherd v New York City Tr. Auth., 129 AD2d 574.) Thus, the moving party need only make some showing of merit with respect to the proposed pleading. (See, e.g., Kaye 1969 Assocs. v Lese, 72 AD2d 728, *156729; Oak Point Indus. Park v Massachusetts Bay Ins. Co., 65 AD2d 552, 553.) That test has been met here.
Inexplicably, the majority, in order to justify denying defendants’ motion to amend the answer, has chosen to create public policy issues which even plaintiff did not advance on appeal. The argument that the ADR clause at issue endows the engineer with the authority to resolve questions of law is not only without jurisprudential support, but is, in any event, irrelevant, since a designated arbitrator clearly may determine even questions of law, if the parties pointedly intend to permit such a result.
The Court of Appeals has held, as a general principle of law, that final and binding ADR determinations may be made regarding questions of law, including those requiring the interpretation of a contract. (See, Stanley & Son v Trustees of Hackley School, 42 NY2d 436; De Lillo Constr. Co. v Lizza & Sons, 7 NY2d 102, 105-106.) While, concededly, a municipality was not a party in either of these cases, the majority is unable to advance an acceptable rationale as to why a municipality should be excluded from entering into a contract containing such a clause. Indeed, if anything, the courts should be more disposed to uphold such clauses where a municipality is involved, because of the potential for saving taxpayer moneys, a consideration which the majority has apparently ignored in its evaluation.
Nor does an exception to the foregoing rule exist, as the majority holds, with respect to changed conditions claims such as the one at issue. In so holding, the majority erroneously equates the standard changed conditions clause used in Federal Government and other noncity contracts with section 201.34 of the contract. Unlike section 201.34, the Federal changed conditions clause provides that an adjustment in the contract is mandatory if the contractor’s changed conditions claim is substantiated. The Federal clause is predicated on the concept that the government will remove the risk of unknown conditions from the contractor and obtain lower bid prices, but suffer the uncertainty of not knowing at the outset the ultimate cost of the project. (See, e.g., Kaiser Indus. Corp. v United States, 340 F2d 322, 329.) By contrast, section 201.34 was drafted with a quite different philosophy, i.e., that the risk of unknown subsurface conditions be placed on the contractor, and taken into account in the bid. Defendants, in turn, were assured that the price bid would be the ultimate cost, except *157in those instances where the chief engineer, in his discretion, awarded a contract adjustment.
The majority also argues that public policy precludes enforcement of the clause at issue on the basis of some amorphous and, more importantly, irrelevant distinctions between a municipality and a public corporation engaging in construction contracts. Historically, any differences that may exist between a public corporation and a municipality turn on the particular convenience for which the corporation was created, usually to facilitate a public purpose without certain constitutional or legal impediments which might otherwise apply. (See, Matter of Plumbing, Heating, Piping & Air Conditioning Contrs. Assn. v New York State Thruway Auth., 5 NY2d 420, 423; also, Grace & Co. v State Univ. Constr. Fund, 44 NY2d 84, 88-89; Matter of New York Post Corp. v Moses, 10 NY2d 199, 203.) Oftentimes, a municipality might be restricted from entering into certain ventures, or have a debt ceiling which would render impossible its direct involvement in the management of the venture. Yet, such distinctions hardly provide a rationale for precluding municipalities from entering into contracts and bargaining for certain advantages available to others, such as an ADR clause.
In voting to allow the amendment sought, I am not unmindful of the Court of Appeals recent decisions in Naclerio Contr. Co. v City of New York (69 NY2d 794, supra) and Lovisa Constr. Co. v City of New York (69 NY2d 801). In affirming both cases on the opinion of this court in Naclerio (116 AD2d 463, supra), the court, in effect, held that the clauses in issue, which were identical to each other, did not constitute an arbitration or alternative dispute resolution clause. Nor do I overlook the Court of Appeals subsequent decision in Grow Tunneling Corp. v City of New York (70 NY2d 665, supra) affirming the denial of the city’s motion for leave to amend its answer to add as an affirmative defense the finality of a determination rendered pursuant to the same clause as in Naclerio.
Naclerio, Lovisa and Grow (supra) are distinguishable since the Court of Appeals in those cases was not asked to pass upon the finality of ADR determinations rendered pursuant to contractual provisions which were in any way similar to article 24 and section 201.34. Those decisions turned on the peculiar language of the Naclerio clause, which provided, in relevant part, that one. of the city’s Commissioners was empowered "[t]o review and determine any and all questions in *158relation to this contract and its performance” (supra, 116 AD2d, at 464). In interpreting this clause the Court of Appeals adopted this court’s holding in Naclerio (supra, 116 AD2d, at 464), that there was no clear evidence that the parties intended to enter into a final and binding ADR process. Unlike the Naclerio clause, article 24 of the contract states that it is intended to "prevent disputes and litigations”, and that the decision maker’s determinations are "final and conclusive”. In my view, such language more than adequately demonstrates the requisite intent, lacking in Naclerio, Lovisa and Grow, to employ and be bound by an ADR procedure.
In recent decisions the Court of Appeals has repeatedly held that where such an intent is sufficiently expressed, ADR determinations are final, even in the absence of express provision therefor, as long as they are not the result of fraud, bad faith, or palpable error, or, as the court noted in Maross Constr. v Central N. Y. Regional Transp. Auth. (supra, 66 NY2d, at 346), not completely irrational or in violation of a strong public policy. (See, e.g., Ardsley Constr. Co. v Port Auth., 54 NY2d 876; Savin Bros. v State of New York, 47 NY2d 934, affg on opn below 62 AD2d 511; Tufano Contr. Corp. v Port of N. Y. Auth., 13 NY2d 488.)1
Indeed, the Court of Appeals decision in Grow (70 NY2d 665, supra) demonstrates the continuing vitality of the foregoing legal principle. In Grow, the city specifically asked the court to articulate whether it had intended in Naclerio and Lovisa (supra) to overrule its previous decisions in Ardsley and Maross (supra) and thereby hold unenforceable all ADR contractual provisions which designate an employee or agent of a contracting party as the decision maker. By narrowly limiting its affirmance in Grow to a holding that the Naclerio clause is not an arbitration or alternate dispute resolution provision making the decisions of the appropriate Commissioner final and binding, the Court of Appeals implicitly reaffirmed Ardsley, Maross and its earlier decisions. Thus, the rule remains intact that, where sophisticated contracting parties sufficiently evince an intent to follow an ADR procedure, determinations *159rendered pursuant to that process will be upheld as binding, subject to the limited judicial review as noted herein.
In Maross (66 NY2d 341, 344, supra), the Court of Appeals held to be conclusive a determination rendered by the "[Transportation] Authority’s architect” pursuant to an ADR provision strikingly similar to the one employed here, the stated purpose of which was "[t]o resolve all disputes and to prevent litigation”. It authorized the architect to "decide all questions of any nature whatsoever arising out of, under or in connection with, or in any way related to or on account of, this [c]ontract”, and further provided that "his decisions shall be conclusive, final and binding on the parties” (supra, at 344).
The contractor in Maross (supra) had submitted its protest work claim, which was denied. Instead of complying with the architect’s directive to perform the subject work, the contractor commenced an action seeking a declaration that it was not so obligated. The Court of Appeals held that the claim fell within what it described as an "all-encompassing” arbitral clause (supra, 66 NY2d, at 346), and that since the contractor failed to demonstrate that the ADR decision was "totally irrational or violative of a strong public policy” (supra, at 346) the architect’s decision was binding.2
Contrary to the motion court’s assertion that the ADR clause in Maross (supra) is not "remotely similar” to article 24, they are, in material respects, identical. Like the ADR provision in Maross, article 24 similarly provides that it is intended "[t]o prevent disputes and litigations”; that the chief engineer is to "determine every question which may be relative to the fulfillment of this contract on the part of the Contractor”; and that the chief engineer’s determinations are "final and conclusive”.
In addition to its broad all-inclusive language, article 24, more strongly than the ADR clause in Maross (supra), also states that, in accord with its explicitly stated purpose of avoiding litigation, the chief engineer is specifically empowered to resolve conclusively questions concerning "the classification, amount, quality, acceptability and fitness of the several kinds of work and materials which are to be paid for under this contract * * * [and] every question in relation to the Words and the construction thereof’.
*160Moreover, article 24, when read together with section 201.34 of the contract, provides specifically for an ADR procedure to resolve in "final and conclusive” fashion claims based upon changed and unanticipated subsurface conditions. Section 201.34 expressly requires the contractor "immediately” to bring such conditions to the chief engineer’s "attention”, and if, after investigation, the chief engineer finds that the conditions are materially different from the contract drawings and specifications and could not have been reasonably anticipated by the contractor and were not anticipated by the city or the Transit Authority, the contract "may” be modified with the chief engineer’s approval.
Plaintiff’s changed conditions claim is, therefore, precisely the kind of issue which the combined ADR procedure set forth in article 24 and section 201.34 was designed to address. Moreover, since plaintiff’s protest work claims involve questions concerning the "amount” of the contract work and the "construction” of the contract, they fall within the specifically enumerated issues set forth in article 24. At the very least, the changed conditions and protest work claims, as well as the extra work claims, fall within the residual clause of article 24 empowering the chief engineer to "determine every question which may be relative to the fulfillment of this contract on the part of the Contractor.” As this record demonstrates, plaintiff’s conduct clearly reflects its understanding that article 24 and section 201.34 did, in fact, control. It submitted all of the foregoing claims to the chief engineer, who rendered determinations on each claim.
Significantly, the Court of Appeals has upheld ADR determinations as binding under circumstances where the parties’ intent to employ a conclusive ADR process was not nearly as unambiguously expressed as here and in Maross (66 NY2d 341, supra). In Ardsley (54 NY2d 876, 877, supra), for example, the parties agreed to the following ADR procedure: "The Engineer shall determine the amount, quality, acceptability and fitness of all parts of the materials and Work, shall interpret the Contract Drawings, Specifications, and any Extra Orders, and shall decide all other questions in connection with the Contract.” The contract did not state that the ADR procedure was intended to avoid litigation and that the ADR decision maker’s determinations were to be final and binding or conclusive. Throughout the proceedings the contractors argued that the engineer lacked the power to decide their claims, and that, in any event, the engineer’s decisions were *161not final since the ADR provision did not specifically provide that his determinations would have that effect.
In affirming the dismissal of the complaint, the Court of Appeals held that the claims fell within the "broad scope” of the contract’s all-encompassing ADR clause, which it characterized as a "disputes provision” (supra, 54 NY2d, at 876, 878), and that, therefore, the engineer’s decisions were "conclusive and final as a matter of law” because the contractors did not demonstrate that the ADR decisions were "infected by fraud, bad faith or palpable error”. (Supra, at 877.) Thus, the court rejected the contention that the engineer’s determinations were not binding because of the absence in the ADR provisions of such words as "final”, "binding” or "conclusive”.
In denying defendants leave to amend their answer to assert as an affirmative defense the finality of the chief engineer’s determinations, the motion court, in effect, nullified article 24 and section 201.34. Where the terms of a contract are clear and unambiguous, effect must be given to the intent of the parties, as manifested by the language they employed. (Slatt v Slatt, 64 NY2d 966, 967; Matter of Western Union Tel. Co. [American Communications Assn.], 299 NY 177, 184; Mandel v 201 W. 16 Assocs., 121 AD2d 910, 911.) To hold otherwise is contrary to the well-established principle that courts cannot adopt an interpretation which renders a contract provision meaningless. (Two Guys From Harrison-N. Y. v S.F.R. Realty Assocs., 63 NY2d 396, 403; Audino v Lincoln First Bank, 105 AD2d 1091, 1093, affd 65 NY2d 631.)
To the extent that the contract at issue provides for the judicial resolution of disputes by speaking of "claims * * * against the City”; an "action for breach of contract”; "compensation for any damage”; and an "action * * * against the City”, it must be read, in view of Maross and Ardsley (supra), as referring to actions seeking nullification of the chief engineer’s determinations under the ADR procedure on the grounds that the determinations are infected by fraud, bad faith, or palpable error, or are totally irrational or in violation of a strong public policy. These clauses are part of what are essentially "notice” provisions intended to apprise the city as to whether the contractor seeks to assert such a claim.
Analogous and, in some cases, more explicit references to litigation were also included in the contracts in Maross and Ardsley (supra), as their records on appeal disclose. Unlike this contract, section 2.01 (B) of the Maross agreement, for *162example, referred to the contractor’s legal "action” with respect to questions which had been submitted to the ADR decision maker. Section 9 of the Ardsley agreement did not merely provide, as does article 42 of this contract, that the contractor’s acceptance of final payment constituted a release of "all claims”. It stated as well that the release encompassed claims "whether or not in litigation”. In addition, section 32 of the Ardsley contract, which pertained to the rights and remedies of the contractor, referred, as does article 42 here, to the contractor’s claims for "money damages for any breach of this Contract”. In upholding the ADR determinations in Maross and Ardsley, the Court of Appeals necessarily held that the other provisions in the contracts referring to litigation did not undercut the validity and finality of the ADR provision.
Nor does section 93 (g) of the New York City Charter interdict the invocation of the contract’s ADR procedure, as the majority holds. The ADR procedure is entirely consistent with the power accorded the Comptroller in section 93 (g) to "settle and adjust” claims. In view of Ardsley and Maross (supra), defendants’ liability has been limited to whether the chief engineer’s ADR determinations under article 24, or in conjunction with section 201.34, are the result of fraud, bad faith, or palpable error, or are totally irrational or in violation of a strong public policy. Applying that standard, as he must, the Comptroller is fully empowered to review and settle such claims.3
The consistency between the contract’s ADR procedure and the Comptroller’s power to "settle and adjust” claims is further demonstrated by the fact that the term "claims”, as used in section 93 (g), refers to claims which could otherwise be asserted in a lawsuit if not settled by the Comptroller. (See, Administrative Code of City of NY § 7-201.) Since article 24 and section 201.34 of the contract provide that the disputes at issue here must first be submitted to the chief engineer, they are not, at this stage, "claims” within the intent and meaning of section 93 (g) of the City Charter and section 7-201 of the Administrative Code. Should plaintiff bring an action challenging an adverse determination by the chief engineer on the grounds above noted, it would then be asserting a "claim” as that term is used in those statutes.
*163In reaching its determination, the motion court also relied on this court’s dictum in Naclerio (116 AD2d 463, supra) that the city’s Commissioner, presumably in view of his relationship to the city, could not act as an ADR decision maker because it would be "contrary to both general principles of law and public policy” (supra, at 464). As already noted, by limiting its holding in Grow (70 NY2d 665, supra) to the inefficacy of the particular clause in issue as an ADR provision, the Court of Appeals indicated that it was not relying on that aspect of the decision. Indeed, in Ardsley, Maross (supra) and other cases, the Court of Appeals has consistently refused to find any infirmity in the designation of a government employee or agent of a contracting party as the ADR decision maker. In holding the determinations of the Port Authority’s engineer in Ardsley to be binding, the Court of Appeals necessarily rejected the contractors’ contention, as reflected in their brief, that the ADR procedure was void because the engineer improperly had sat "in judgment of a charge of misrepresentation which is essentially against him.”
The Court of Appeals similarly upheld the ADR determination by the architect in Maross (supra) even though the architect was at least equally, if not more, intimately involved in the project at issue there as the chief engineer was here. As the record on appeal demonstrates, the architect there had designed and directed the construction of the project, and was, as noted by the contractor, "retained and paid by the [governmental] owner to specifically look out for the owner’s interest.”
Moreover, by analogy, even in the case of formal CPLR article 75 arbitration agreements, the Court of Appeals has held that a "fully known relationship” between an arbitrator and a contracting party, "including one as close as employer and employee” does not invalidate the agreement. (Matter of Siegel [Lewis], 40 NY2d 687, 690; see, Olsen & Chapman Constr. Co. v Village of Cazenovia, 33 AD2d 929, 930.) In fact, in Corbetta Constr. Co. v Michigan Mut. Liab. Co. (20 AD2d 375, 379, affd 15 NY2d 888), this court ruled that it is "perfectly legal and proper” for a governmental agency of one of the contracting parties to act as an arbitrator.4 Thus, the *164known relationship between the Transit Authority and the chief engineer does not invalidate the latter’s determinations.
As for plaintiffs lack of mutuality claim, the contract’s ADR procedure is enforceable irrespective of whether defendants are bound by the chief engineer’s determinations. Even if they are not, and defendants do not so concede, it is well settled that parties to a dispute resolution clause may provide that they will not be equally bound by the decision maker’s determination. (Matter of Todd Shipyards Corp. [Marine Vessel Leasing Corp.], 67 AD2d 646, affd 49 NY2d 809; see, Matter of American Ins. Co. [Messinger—Aetna Cas. & Sur. Co.], 43 NY2d 184, 194.) Sound policy considerations would justify such disparity in the case of a municipality. As was noted in O’Brien v Mayor of City of N. Y. (139 NY 543, 576-577), "There is no spur like self-interest in business enterprises, and it may be regarded as certain that the contractor will always take care of his own interests so far as it is possible * * * But how far the officers or employees who represent the general public or the corporation which is building the work can be depended upon for steady, earnest, zealous and able attention to the public interests is always a matter, to say the least, of some doubt. Hence the provisions for the binding force of the engineer’s decision upon the contractors and an omission of any such provision in relation to the other parties to the contract.”
It should be noted that ADR clauses such as the one involved here serve a salutary purpose. The advantage to the municipality in avoiding litigation and time-consuming delays in public projects is obvious. On the other hand, they afford contractors the opportunity to present their claims to government employees who have the necessary experience, training, and educational background to resolve what are frequently complex and technical matters, and to have prompt decisions rendered thereon. (See generally, Matter of Goldfinger v Lisker, 68 NY2d 225, 230-231; Matter of Perl [General Fire & Cas. Co.] 34 AD2d 748.) Such clauses also serve to avoid what *165has been characterized as "vexatious and expensive and, to the contractor oftentimes, ruinous litigation.” (Kihlberg v United States, 97 US 398, 401; see, S & E Contrs. v United States, 406 US 1, 8.) Indeed, the Court of Appeals has upheld provisions in other city construction contracts intended to avoid vexatious litigation, particularly where, as here, they are executed at arm’s length. (See, Kalisch-Jarcho, Inc. v City of New York, 58 NY2d 377, 384.)
Finally, the argument that the determinations in question were unenforceable because they were actually made by O’Neill’s "remote subordinates” is a factual question which is irrelevant to whether the parties intended to employ a binding ADR procedure, the only question concerning the merits of defendants’ proposed affirmative defense properly before the court. In any event, this record indicates that O’Neill actively participated in the determination of the claims submitted to him.
Accordingly, the order appealed from should be modified to the extent of granting defendants’ motion for leave to amend the answer.
Milonas and Ellerin, JJ., concur with Carro, J.; Sullivan, J. P., and Rosenberger, J., dissent in an opinion by Sullivan, J. P.
Order, Supreme Court, New York County, entered on or about August 4, 1986, affirmed, without costs and without disbursements.
. The reported decisions in Savin Bros. v State of New York (47 NY2d 934, affg on opn below 62 AD2d 511) do not indicate the exact language of the ADR clause in the contract at issue. The State’s brief filed with the Court of Appeals reveals, however, that, as in the case of the ADR provision in Ardsley Constr. Co. v Port Auth. (54 NY2d 876), the clause did not contain specific language regarding finality, conclusiveness, or binding effect.
. Although the court defined the ADR provision in Maross Constr. v Central N. Y. Regional Transp. Auth. as a "broad arbitration” clause (66 NY2d 341, 342, 347), the parties had agreed, in fact, not to follow the formal procedures set forth in CPLR article 75.
. Section 93 (g) of the New York City Charter explicitly provides that the chief engineer’s power to "settle and adjust” claims must be exercised in a manner which is consistent with applicable law.
. This court’s sole reliance in Naclerio Contr. Co. v City of New York (116 AD2d 463, affd on opn below 69 NY2d 794) on its prior decision in Matter of Cross & Brown Co. [Nelson] (4 AD2d 501) as support for its conclusion that a government employee of a contracting party cannot act as *164an ADR decision maker is open to question. In that case, the board of directors of a corporation had been designated as the arbitrator, not of construction contract disputes, but, rather, of labor disputes between the corporation and its employees. Moreover, while this court held that the arbitration agreement was invalid because the board was, "in fact”, the corporation, it reaffirmed the principle that parties can knowingly designate as an arbitrator an individual who has some relationship to a party. (Supra, at 503.)