ELECTRONIC INTERCONNECT CORPORATION, GLOBAL CIRCUITS OF NORTH
CAROLINA, INC. f/k/a GLOBAL CIRCUITS ACQUISITION COMPANY, BHARAT
BARAI, M.D., and PANNA BARAI, M.D., Plaintiffs, v. GOVIND CHANDAK
and MADHU CHANDAK, Defendants
1. Appeal and Error_record_evidence at hearing not presented_assignments of error
dismissed
Plaintiffs' assignments of error arising from an arbitration were dismissed where the
record did not reflect the evidence presented to the arbitration panel, in violation of Rule 9(a)(1)e
of the Rules of Appellate Procedure. The memorandum of an advocate cannot be a proper
substitute for establishing the evidence received during an arbitration proceeding.
2. Arbitration and Mediation_reasoning of award_not required
There was no remand of an arbitration award which did not include the reasoning for the
arbitration panel's decision; the arbitration agreement did not require the arbitrators to set forth
their reasoning, nothing in the record suggests that defendants assented to plaintiffs' request for a
statement of reasoning, and there is no persuasive authority that suggests that the panel was
required to provide its reasoning on these facts.
3. Arbitration and Mediation_award_not ambiguous
An arbitration award was not ambiguous and inconsistent where it fully addressed the
issues presented by the parties and set forth its decision in clear terms.
Ellis & Winters, LLP, by Paul K. Sun, Jr. for plaintiffs-
appellants.
Ward and Smith, P.A., by Gary J. Rickner, for defendants-
appellees.
LEVINSON, Judge.
Several of the parties in the instant case were involved in a
related litigation, Chandak v. Electronic Interconnect Corp., 144
N.C. App. 258, 550 S.E.2d 25 (2001). This appeal arises from an
order confirming an arbitration award entered pursuant to the
parties' agreement to arbitrate all claims arising from the sale of
Global Circuits of North Carolina, Inc. We have included only
those facts necessary to an understanding of the issues presented
in the current appeal.
The 20 November 2003 arbitration award provided, in pertinent
part, the following:
The Panel therefore answers the substance of the issues
submitted by Claimants as follows:
1. Were claimants damaged by fraud of respondents
in connection with the sale of the business?
ANSWER: No.
2. Were claimants damaged by deceptive trade
practices of respondents in the sale of the
business?
ANSWER: No.
3. Were claimants damaged by breach of fiduciary
duty of respondents in purchasing the Global
property?
ANSWER: No.
4. Were claimants damaged by deceptive trade
practices of respondents in respondents'
purchase of the Global property?
ANSWER: No.
5. Did respondents abuse the process of the court
in the summary ejectment action instituted
against claimant Electronic Interconnect
Corporation and Global Circuits of North
Carolina, Inc.?
ANSWER: No.
6. Did respondents breach the lease agreement
with Global Circuits of North Carolina, Inc.?
ANSWER: Yes.
7. What amount of damages is claimant Global
Circuits of North Carolina, Inc. entitled to
recover from respondents for breach of the
lease?
ANSWER $15,000.
Therefore, claimants Electronic Interconnect Corporation,
Bharat Barai, M.D. and Panna Barai, M.D. are not entitled
to any award of damages against the respondents, and all
claims made by these claimants against the respondents in
this arbitration are hereby denied. Claimant Global
Circuits of North Carolina, Inc. is entitled to an award
of damages against respondents, Govind Chandak and Madhu
Chandak in the amount of $15,000.00, and this claim by
Global Circuits of North Carolina, Inc. against
respondents in this arbitration is hereby allowed.
Respondents are found by the Panel to be the prevailing
parties in this arbitration on all claims except the
breach of lease claim by Global Circuits of North
Carolina, Inc. Claimant Global Circuits of North
Carolina, Inc. is found by the Panel to be the prevailing
party in connection with the breach of lease claim. . .
.
Plaintiffs filed motions to vacate the award; Govind Chandak
and Madhu Chandak (defendants) filed motions to confirm the award.
On 2 September 2004 the trial court entered an order denying
plaintiffs' motions to vacate the arbitration award and granting
defendants' motions to confirm the award. From this order
plaintiffs now appeal. We affirm. ____________________________________
[1] On appeal, plaintiffs first contend the trial court erred
by failing to vacate the arbitration award because the arbitration
panel “manifestly disregarded the law.” According to plaintiffs,
the panel (1) failed to apply principles of collateral estoppel to
plaintiffs' abuse of process claim; (2) ignored the facts and the
law regarding plaintiffs' claim of wrongful acquisition of the
Global property; and (3) ignored the law regarding plaintiffs'
claim of fraud concerning the sale of the business. We conclude
that, by violating the requirements of N.C.R. App. P. 9, plaintiffs
have not provided us with the necessary materials to evaluate these
issues.
Under N.C.R. App. P. 9(a)(1)e, the record in a civil action
shall contain “so much of the evidence, set out in the form
provided in Rule 9(c)(1), as is necessary for an understanding of
all errors assigned[.]” “It is incumbent upon the appellant to see
that the record on appeal is properly made up and transmitted to
the appellate court. The Rules of Appellate Procedure are
mandatory and failure to follow the rules subjects appeal to
dismissal.” Fortis Corp. v. Northeast Forest Products, 68 N.C.
App. 752, 754, 315 S.E.2d 537, 538-39 (1984) (citations omitted).
The introductory paragraphs of the arbitration award stated,
inter alia, that the panel members “received into evidence all
exhibits tendered by the parties' counsel . . . [and] the sworn
oral testimony of . . . witnesses[.]” Based “solely upon the
evidence of record in this case,” the panel entered the award setforth above. As a necessary predicate to an evaluation of
plaintiffs' arguments, the record on appeal must reflect what
evidence was presented to the arbitration panel. While the
arbitration agreement specifically afforded the parties the ability
to record the arbitration hearing, this Court has not been provided
a transcript of the arbitration hearing. Nor have we been provided
a narrative of the proceedings; a listing of the witnesses
proffered by the parties and a summary of their testimonies; and/or
an identification of the exhibits actually presented to the
arbitration panel. Plaintiffs' appeal rests largely on their
contention that the arbitration panel did not properly consider the
legal effects of N.C.R. Civ. P. 11 sanctions order; however, we
cannot even discern from the record whether the sanctions order
was, indeed, submitted to the panel.
The only documents in the record we can definitively conclude
were submitted to the arbitration panel are the parties' post-
arbitration hearing briefs labeled “Claimants' Post-Hearing Brief”
and “Respondents' Post-Arbitration Submission.” These briefs
summarize the parties' contentions about what the evidence
demonstrated. We know these briefs were submitted to the panel
only because the language of the arbitration award itself states
these were considered. In their Post-Hearing brief, plaintiffs
make many of the arguments they now make on appeal. The legal
memorandum of an advocate cannot, of course, be a proper substitute
for establishing what evidence was received during the arbitration
hearing. And the legal memorandum itself references exhibitnumbers that do not correspond with exhibit numbers included in the
record on appeal. That plaintiffs, in attempting to support many
of the factual contentions in their brief, reference only this
memorandum, or other legal memoranda, is additional support for our
conclusion that we cannot know what took place during the
arbitration hearing. We note only two examples.
First, plaintiffs contend there was “undisputed evidence”
presented to the arbitration panel of defendants' wrongful
acquisition of the Global property. As support for this
contention, plaintiffs point this Court to their 3 November 2003
Post-hearing Brief, which is, again, a legal memorandum. In this
memorandum, there are additional cites to Exhibits C28, C31, A45,
A34, A40, and A20. While the legal memorandum recounts and
summarizes witness testimony, this Court has no way to determine
whether this testimony was, indeed, offered before the arbitration
panel. There are no exhibits in the record which can be identified
as exhibits A45, A34, A40, and A20. And while there is one exhibit
attached in the Appendix to appellants' brief which might
correspond with C28 or C31, there is no indication this exhibit was
submitted to the arbitration panel. As a further example,
plaintiffs contend that “[u]ndisputed evidence at the hearing
showed that [Electronic Interconnect] and the Barais paid
$1,000,000 for the Global business[.]” As support for this
contention, plaintiffs again point to legal briefs, which recite
factual allegations that may or may not have been independently
presented to the arbitration panel. Without a record of the evidence and the law presented to the
arbitration panel, we cannot begin to evaluate whether the
arbitration panel “manifestly disregarded the law” and whether the
superior court judge, in turn, erred by failing to conclude the
same.
Though not essential to our holding, we observe that the
record does not include a transcript or other definitive indicia of
what exhibits were presented to the trial court by plaintiffs on
their motions to vacate the arbitration award. In its order
denying plaintiffs' motions to vacate, the trial court noted it
considered the “arguments of counsel[,] . . . the Court file, the
memoranda of law submitted by the parties, and the pleadings and
other submissions from the arbitration[.]” (emphasis added).
Because the record does not establish what “submissions from
arbitration” were offered by plaintiffs in their motions to vacate,
it is exceedingly difficult for this Court to evaluate whether the
trial court itself erred in denying plaintiffs' motions to vacate.
The relevant assignments of error are dismissed.
[2] Plaintiffs next contend that the arbitration award must be
modified by the arbitration panel to include “a statement of the
reasoning for the panel's decision.” We disagree.
The arbitration agreement itself does not require the
arbitrators to set forth the reasons for their award. The
arbitration agreement provided only that:
The award shall be set forth in writing; it
shall be signed by the Arbitrators who concur
in making the award; and shall state the
amount, if any, of the award separately withrespect to each of the claims asserted by
Barai and Chandak.
Nonetheless, plaintiffs contend that the panel was “required” to
include such a statement because the same was included in
plaintiffs' written “summary of the subjects discussed” during a
preliminary hearing preceding the arbitration. According to
plaintiffs, the written summary included “clarifications of the
[arbitration A]greement.” The preliminary hearing was held
consistent with the terms of the arbitration agreement, which
provided that the parties would “discuss the future conduct of the
case” and “address any other matters [the parties] or the
Arbitrators may wish to consider.” After the panel made its award,
and plaintiffs again “requested” a statement of its reasoning, the
panel declined to do so because (1) it was not required by the
terms of the arbitration agreement, and (2) the same “is not
customary in arbitrations in North Carolina.”
Nothing in the record suggests defendants assented to
plaintiffs' request or independently urged the arbitration panel to
provide a statement of its reasoning. Nor do plaintiffs cite this
Court to any persuasive authority that suggests the panel was
required to provide a statement of its reasoning on these facts.
We conclude this argument is without merit.
[3] Plaintiffs next contend that the form of the arbitration
award is inconsistent and ambiguous, and that the award does not
definitively express who the “prevailing” party is. Contrary to
plaintiffs' contentions, the arbitration award fully addresses theissues presented to it by the parties and sets forth its decision
in clear terms. The award is neither ambiguous nor inconsistent.
Affirmed.
Judges HUDSON and CALABRIA concur.
*** Converted from WordPerfect ***