On August 12, 2015, the HAWSCT issued an amended opinion in In the Matter of the Nordic PCL Construction, Inc. v. LPIHGC, LLC, No. SCWC-11-0000350, designated as a writ to watch here, holding that when an“evident partiality” claim is made as a basis for vacating an arbitration award, the circuit court must hold an evidentiary hearing and issues findings and fact and conclusions of law to support its decision – otherwise, the record will be insufficient for the appellate court to review the propriety of the lower court’s decision.
In the underlying case, Nordic appealed the circuit court’s decision to confirm the arbitration award and deny Nordic’s motion to vacate the award. The ICA agreed with Nordic the arbitrator’s “failure to disclose various relationships with the law firms of LPIHGC’s attorneys established a reasonable impression of partiality requiring vacatur of the Arbitration Award.” Slip. Op. at 2.
According to the Hawaii Supreme Court, since the “evident partiality” claim raised by Nordic presented fact issues, the circuit court should have held an evidentiary hearing even though none of the parties requested one. Also, after the hearing, the circuit court must issue findings of fact and conclusions of law supporting its decision. Otherwise, the record will not be sufficient for the appellate court to review whether the circuit court’s decision is correct or not. According to the court, absent findings and conclusions, “the factual and/or legal bases upon which the circuit court denied the motion to vacate are unascertainable.” Slip. Op. at 3. Therefore, is “unable to determine the grounds on which the circuit court based its decision,” and is “unable to appropriately review its ruling.” Id. at 3-4.
Although a hearing was held on Nordic’s motion to vacate, the HAWSCT nevertheless based it decision on the circuit court’s failure to hold an “evidentiary hearing” on the disputed issues of fact raised by Nordic’s argument. This particular issue was not one that the parties raised on in the certiorari pleadings. Slip. Op. at 24-27. Nevertheless, according to the court, it is not within the appellate court’s purview to review the many disputed issues of material fact that were raised in this case.
The HAWSCT provided the following direction to lower courts:
“Although entry of findings of fact and conclusions of law are not required on all motions to vacate as long as the circuit court’s reasoning is clearly stated on the record, due to the numerous issues in this case, to allow appropriate appellate review, the circuit court is to conduct an evidentiary hearing and render findings of fact and conclusions of law.” Slip. Op. at 62-63.
The HAWSCT’s full amended opinion, authored by Justice McKenna is available here.
The HAWSCT’s order granting reconsideration, and noting the minor amendments made to the original opinion, is available here.