A federal judge last week affirmed a $3.6 million award that Tiffany & Co. had won at arbitration in a dispute over the sale of its Little Switzerland Inc. business.

Tiffany and NXP Corp., which bought the Caribbean jewelry chain through its Oakland, Mich.-based assignee Dhirim Inc. in 2007, had fought over the final sale price because of balance sheet adjustments.

The two companies entered arbitration, as called for in the purchase agreement. In April, an arbitrator at financial services firm KPMG decided in Tiffany’s favor and awarded it $3.6 million.

Dhirim refused to pay and, several weeks later, brought a lawsuit in U.S. District Court in Detroit seeking to have the award vacated. The company alleged KPMG’s arbitrator, Luke Botica, was biased because his firm had separately tried to win Dhirim’s tax and accounting business.

Meanwhile, Tiffany filed a suit in U.S. District Court in Manhattan in June seeking to have the award confirmed.

In a ruling handed down Aug. 19, Judge Alvin Hellerstein of the New York court certified Botica’s original award to Tiffany.

Hellerstein found that the arbitrator was “fair and unconflicted” and that “Dhirim was aware of [the] alleged fault at the time of arbitration, and waived its right to object by waiting until issuance of an unfavorable award to do so.”

A lawyer for Dhirim said Friday she had no comment.

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