978 F.2d 1256 (4th Cir. 1992), 91-1631, Silkworm Screen Printers, Inc. v. Abrams

Docket Nº:91-1631.
Citation:978 F.2d 1256
Party Name:SILKWORM SCREEN PRINTERS, INCORPORATED, Plaintiff-Appellee, v. Robert ABRAMS; Limited Genco International; James Y. Chen; Limited Amchi Trading; Limited Eastern Commodities, Defendants-Appellants.
Case Date:November 04, 1992
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 1256

978 F.2d 1256 (4th Cir. 1992)

SILKWORM SCREEN PRINTERS, INCORPORATED, Plaintiff-Appellee,

v.

Robert ABRAMS; Limited Genco International; James Y. Chen; Limited Amchi Trading; Limited Eastern Commodities, Defendants-Appellants.

No. 91-1631.

United States Court of Appeals, Fourth Circuit

November 4, 1992

Editorial Note:

This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA4 Rule 36 regarding use of unpublished opinions)

Argued: April 9, 1992

Appeal from the United States District Court for the District of South Carolina, at Charleston.

David Michael Collins, BUIST, MOORE, SMYTHE & MCGEE, for Appellants.

Peter Wieler Fudali, SANDLER, TRAVIS & ROSENBERG, P.A., for Appellee.

Edward M. Joffe, SANDLER, TRAVIS & ROSENBERG, P.A., Frank Cisa, WOODDY, BARGMANN, CISA, STYLES & DODDS, for Appellee.

D.S.C.

VACATED AND REMANDED.

Before NIEMEYER, Circuit Judge, BUTZNER, Senior Circuit Judge, and WARD, Senior United States District Judge for the Middle District of North Carolina, sitting by designation.

BUTZNER, Senior Circuit Judge:

OPINION

Robert Abrams, Genco International, Ltd., James Y. Chen, Amchi Trading, Ltd., and Eastern Commodities, Ltd., appeal an order of the district court denying their motion to dismiss an action brought by Silkworm Screen Printers, Inc., for breach of contract, actual and constructive fraud, negligent misrepresentation, and unfair trade practices. Silkworm seeks compensatory and punitive damages. The motion to dismiss is predicated on the claim that the controversy should be arbitrated. Abrams and his codefendants also appeal the district court's denial of their motion to stay Silkworm's action pending arbitration.

Jurisdiction for Silkworm's action is based on diversity of citizenship, 28 U.S.C. § 1332. Appellate jurisdiction is based on 9 U.S.C. § 16(a) (1990), which allows appeals of orders denying arbitration or denying stays of proceedings at law pending arbitration. See Jerke v. Brooks, 875 F.2d 71, 73-74 (4th Cir. 1989) (discussing 9 U.S.C. § 15 which has since been recodified as § 16). The district court also denied the defendants' motion to dismiss for lack of personal jurisdiction; as the parties recognize, this aspect of the district court's order is not appealable.

We vacate the portion of the district court's order that denied dismissal of the complaint and a stay pending arbitration and remand for further fact finding and proceedings consistent with this opinion.

I

Eastern Commodities, designated as "seller," and Silkworm, designated as "buyer," contracted to purchase black cotton t-shirts manufactured in China. James Y. Chen, an officer of Amchi, signed the contract on behalf of Eastern Commodities. Thomas Pickhardt, an officer of Silkworm, signed on behalf of Silkworm. Silkworm claims that when the first shipment of shirts arrived at the Port of Charleston, South Carolina, the defendants failed to provide the necessary documents for the shirts to clear customs. Moreover, according to Silkworm, the shirts failed to conform to specifications.

The Eastern Commodities-Silkworm contract provided"sellers to present original contract with PRC Mfgrs. which forms a part of this contract." The defendants contend that this provision refers to the contract between Shenzhen Foreign Trade Group and Queenkit. The Shenzhen-Queenkit contract contains a broad form arbitration clause:

All disputes arising from the execution of, or in connection with this contract, shall be settled amicably through friendly negotiation. In case no settlement can be reached through negotiation, the case shall be submitted to the Foreign Economic & Trade Arbitration Commission of the Chinese Council for the Promotion of International Trade, Beijing, for arbitration with its procedural rules of procedure. The arbitrable award is final and binding upon both parties.

Chen identified Queenkit as a Hong Kong trading company that contracted with Shenzhen for some of the t-shirts and delivered 1,580 dozen. He identified Montage as another Hong Kong trading company that also contracted with Shenzhen for some of the t-shirts and delivered 13,000 dozen. The manufacturers, Chen testified, were affiliated with Shenzhen, and the Shenzhen-Queenkit contract was the standard...

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