The TWU - which says it will appeal - had claimed empaneling arbitrators is morally and legally wrong because workers ratified a 37-month contract in April by a wide margin after narrowly rejecting it in December.

But the Transit Authority and its parent, the Metropolitan Transportation Authority, defended the right to arbitrate because the union had initially rejected the pact.

Supreme Court Justice Theodore Jones didn't rule on the merits of the case, but said the court lacked jurisdiction. The arbitration panel held its first meeting last Friday. On its Web site, Local 100 attacked the MTA presentation because it "totally ignored all that had been agreed to in previous negotiations."

"The political interference continues," the union said in a statement yesterday.

The MTA had no response to the court's action.

Jones has already fined the union $2.5 million and suspended automatic collection of dues - and sentenced Local 100 President Roger Toussaint to 10 days in jail.