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Shammas v. National Telefilm Associates, Inc.

Citations: 11 Cal. App. 3d 1050; 90 Cal. Rptr. 119; 1970 Cal. App. LEXIS 1801Docket: Civ. 35830

Court: California Court of Appeal; October 7, 1970; California; State Appellate Court

Narrative Opinion Summary

This judicial opinion addresses an appeal by National Telefilm Associates, Inc. (NTA) against a judgment confirming an arbitration award to Mounir J. Shammas for breach of contract. The dispute arose from a 1966 contract in which NTA agreed to supply Shammas with film prints for distribution, but withdrew due to Shammas's demands for contract modifications. Shammas initiated arbitration, resulting in a $26,000 award. NTA appealed, arguing the award violated public policy, that they were denied a fair hearing due to a refusal to postpone, and that there was a miscalculation in damages. The court affirmed the arbitration award, rejecting NTA’s claims. It found that shipping restrictions were not part of the contract, thus irrelevant to public policy arguments, and that NTA had sufficient time to gather evidence during the two-year arbitration process. Moreover, the court held that the sufficiency of evidence for the award amount was not subject to review. Consequently, the court upheld the award, finding no basis for correction or vacatur, and denied subsequent petitions for rehearing and Supreme Court review.

Legal Issues Addressed

Arbitration Awards and Public Policy

Application: The court declined to vacate the arbitration award on public policy grounds, as the alleged shipping restrictions were not operative parts of the contract.

Reasoning: The court did not address this argument, as it relied on the unsupported premise that shipping restrictions were part of the contract. Evidence indicated that shipping restrictions were initially included but soon withdrawn; subsequent communications clarified that NTA was not required to provide invoices proving compliance with these restrictions.

Arbitration Hearing Postponement

Application: The court found no substantial prejudice against NTA due to the refusal to postpone the arbitration hearing, as ample time was provided to gather evidence.

Reasoning: However, the arbitration proceedings lasted from January 1967 to January 1969, providing ample time for evidence procurement, making further postponement unnecessary.

Correction of Arbitration Award

Application: The court refused to correct the arbitration award for alleged miscalculation, as the sufficiency of evidence in arbitration is not subject to judicial review.

Reasoning: NTA claimed the award of $26,000 lacked proof, but this argument was invalid as courts do not review the sufficiency of evidence in arbitration.

Irrevocable Letters of Credit

Application: The court upheld the arbitrators' conclusion that the credit arrangements complied with the contract requirements, as NTA did not object to the arrangements indicating acceptance.

Reasoning: The arbitrators had received letters from Morgan indicating readiness to pay a draft and could resolve the issue legally, determining if the contract required an irrevocable letter or if the arrangements made sufficed.