Case of the Day: Nanda v. Nanda

The case of the day is Nanda v. Nanda (N.D. Tex. 2012). Jay and Atul Nanda, brothers, were fighting over control of Dibon Solutions, Inc. in the Texas state courts. In 2011, they dismissed the Texas litigation and agreed to settle some of their disputes in arbitration. The arbitrator’s award, rendered only a month or so after the settlement, divided ownership in Dibon and other company, RTS. Jay accused Atul of refusing to comply with the award, and he sued Atul and Dibon Solutions in the 44th Judicial District Court of Dallas County. Atul and Dibon removed the case to the Northern District of Texas on the grounds that case related to the award and that the award fell under the New York Convention. After the judge denied Jay’s motion to remand, 1 Jay amended his complaint to seek confirmation of the award.

Atul argued that he had been denied the opportunity to present his case because the arbitrator had misconstrued the evidence. He submitted an email that the arbitrator probably regrets sending:

In any event, the suggestion has been made that the evidence has been “misunderstood or ignored”, and the award contains “clearly an error of omission”.

I will always concede that evidence may have been misunderstood. I will never concede that evidence was ignored.

Is there not another possibility?

That in the parties obsessive haste, where urgency and a desire for speed rendered a desire for an orderly process moot, where the original hearing date, which all acknowledged was unreasonably hasty, was moved up by two weeks to accommodate the travel plans of family, resulted in a hearing process where the evidence was poorly, and sloppily, presented, where after the hearing, non-parties are sending ex parte communications asking for modifications to an award? I didn’t design the process. I argued against it.

The judge concluded, apparently correctly, that the email was not an admission that the arbitrator had misconstrued evidence. But it’s mysterious why the arbitrator thought it was a good idea to engage in this kind of back-and-forth with the litigants after rendering the award.

Atul made a number of other minor arguments, which the judge rejected, but his main alternate argument was that Dibon, a defendant in the action for confirmation, was not a party to the arbitration agreement. The agreement itself is a little confused. On the one hand, it does not name Dibon as a party. On the other hand, all of Dibon’s shareholders signed it, and why would they have signed if Dibon was not intending to be bound? Fortunately, there were sound reasons to hold that Dibon was bound by the agreement to arbitrate notwithstanding the agreement’s ambiguities. For one thing, Dibon ratified the arbitration agreement by performing obligations under it (e.g., dismissing its lawsuit against Jay, making payments to RTS). For another, Dibon judicially admitted that it was a party to the arbitration agreement in appellate proceedings in its lawsuit against Jay.

The oddest thing about this case is the speed with which the parties arbitrated. It seems both parties must have thought that the most important thing was a quick decision, up or down. Why, then, did Atul resist the award? When we read cases on confirmation or vacation or arbitral awards, there is always a tension between the justification for enforcing arbitral agreements—the parties’ consent—and the facts on the ground, at least in cases where the losing party isn’t able to make a credible showing that the award comes within one of the narrow exceptions to enforcement in the Convention.


  1. The decision on the remand is not the subject of today’s post, but it’s interesting nonetheless. Both brothers resided in Texas, but both were citizens of India. Under 9 U.S.C. § 202, commercial arbitral awards fall under the Convention unless it is “entirely between citizens of the United States.” Is it sensible to make citizenship rather than domicile the key here? See 3 Ved P. Nanda and David K. Pansius, Litigation of International Disputes in U.S. Courts § 19:9 (“Consider the reverse. Jane Doe is a citizen of India. She is domiciled in California. She has legal permanent residence status and expects to get her citizenship soon. A California company contracts with Jane for the software. Jane has all of the look, feel, and appearance of a U.S. citizen. Does the fact that she ‘only’ has a green card invoke the Convention because the dispute involves a person who is not a U.S. citizen? Would the result change if Jane were not a citizen when the legal relationship was created; but was a citizen when the dispute arose?”)

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. Folkman also serves as an arbitrator and is a member of the Commercial and Consumer Panels of the American Arbitration Association. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's treatise on International Aspects of US Litigation (J. Berger, ed. 2017), and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012 and 2014 - 2016.

2 thoughts on “Case of the Day: Nanda v. Nanda

  1. Sowrabh Sharma CEO MMC Systems Inc, SCM Data Inc, Tek Erp LLC, Compuga Inc, tech analysts Inc and Board of Directors of LanceSoft, Inc Arrested

    Company Name: LanceSoft, Inc.
    Business owner, 2 firms face visa fraud charges
    NEWARK, N.J. – Federal prosecutors in New Jersey said Monday the part-owner of two information technology firms and an
    employee fraudulently used a visa program to reduce skilled labor costs.
    Sharma was arrested Monday and was scheduled to make his initial court appearance later in the day.
    Prosecutors filed conspiracy charges against Sowrabh Sharma, of New York; his two firms, Jersey City-based SCM Data and
    MMC Systems, of Ashburn, Virginia; and Shikha Mohta, a Jersey City man who is head of finance for both companies.
    It’s not known if he has an attorney who could comment on the accusations.
    Mohta was arrested in May 2015 and remains free on a $100,000 bond.
    In a statement, prosecutors said the companies offered consultants to clients in need of IT support. The firms recruited
    foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas.
    The H-1B program allows businesses in the United States to temporarily employ foreign workers with specialized or
    technical expertise in a particular field, such as accounting, engineering or computer science.
    The defendants and other conspirators recruited foreign workers with purported IT expertise who sought work in the
    United States, prosecutors said. The conspirators then sponsored the foreign workers’ H-1B visas with the stated
    purpose of working for Sharma’s two companies.
    Prosecutors said the conspirators falsely represented that the foreign workers had full-time positions and were paid an
    annual salary. They said the workers were only paid when placed at a third-party client and the defendants sometimes
    generated false payroll records.
    When federal officials launched an audit of Sharma’s firms, the defendants allegedly provided fabricated leave or
    vacation slips for the time periods that the foreign workers were not working, to conceal that they were not paid as
    required by federal law.
    The defendants are charged with conspiracy to commit visa fraud and obstruct justice and conspiracy to harbor aliens.
    They face up to 15 years in prison if convicted on all counts.

Leave a Reply

Your email address will not be published. Required fields are marked *