NEW YORK, JULY 10 -- In a decision that could benefit thousands of investors nationwide, the state's highest court today upheld a customer's right to take certain stockbroker disputes to independent arbitration.
The 6-0 ruling by the New York state Court of Appeals in Albany deals a blow to brokerage firms that long have sought to limit investors to industry-sponsored arbitration panels operated by the nation's stock exchanges.
''It's really a victory for the consumer,'' said Theodore Eppenstein, who represented investor Jeffrey Anderson in a case against the brokerage Cowen & Co. ''It gets us up to the level playing field we're looking for.''
Anderson in December 1988 sought to use a loophole in his arbitration contract to have a dispute settled by the American Arbitration Association rather than one of three industry-run panels. Anderson claims he lost $250,000 through mishandling of his accounts.
Opponents claim the securities industry's arbitration system is stacked against the investor because the majority of arbitrators have some industry affiliation. The industry denies any unfairness.
Many investors have sought to bypass restrictions in contracts via a clause in the American Stock Exchange's constitution that permits customers to use the arbitration association unless the contract limits arbitration to specific exchanges.
The Cowen contract states arbitration must be settled ''in accordance with the rules'' of the American Stock Exchange, New York Stock Exchange or National Association of Securities Dealers. The court interpreted ''rules'' to include the Amex constitution.
''Arbitration agreements are contracts and their meaning is to be determined from the language employed by the parties under accepted rules of contract law,'' the court said.
The federal 2nd U.S. Circuit Court of Appeals earlier this year closed the so-called ''Amex window'' in two cases, stating that the contract language restricted arbitration to industry forums.
Matthew Farley, an attorney for Cowen, said the ruling would not resolve the issue of where customers can arbitrate their claims because it was limited to the language of the Cowen contract.
''I take some comfort in the fact that the court did not choose to issue a broad public pronouncement,'' Farley said.