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Final Award

WE, THE UNDERSIGNED ARBITRATORS, having been designated in accordance with the arbitration agreement entered into by the above-named Parties and dated as of March 13, 2002, and having been duly sworn, and having duly heard the proofs and allegations of the Parties, do hereby AWARD as follows:


A. The Governing Agreements.

This case arises out of disputes between the Parties, who are sister and brother, Evangelia Manios Zachariou ("Claimant", "Mrs. Zachariou", "sister") and Vassilios Manios ("Respondent", "Manios", "brother") over the distribution of certain assets left by their late brother who died intestate in 1995. These disputes have a long history most of which need not be recounted to explain this Final Award. Suffice it to say that they produced over time several agreements aimed at dividing the assets of the estate and providing a protocol for the more effective management of the properties and the businesses included among them.
In 1999, the Parties executed two relevant agreements. The first, entered into as of March 30 ("Private Agreement"), memorialized their joint, equal ownership of all the family’s holdings and business interests, and also had the effect of extinguishing any separate, additional right their mother might have had to the assets by merging that into the interest of Mrs. Zachariou. It is this instrument that establishes Mrs. Zacharious’s right to an equal share with her brother to the assets and proceeds of their late brother’s estate. The detailed mechanics of the division of the property and of handling its business implications as elaborately set out in the Private Agreement do not concern the Tribunal. The Private Agreement provides that it is governed by Greek law and that disputes would be resolved by arbitration in Athens in accordance with the provisions of the (Greek) Civil Procedure Code.
On October 12, 1999, the Parties amended the Private Agreement in the Private Agreement for Partial Distribution ("Partial Distribution Agreement"). By its terms, brother and sister agreed to a detailed division of certain assets they had jointly owned by the terms of the Private Agreement, and established a timetable for effecting that partition and managing its intricate details. The instrument covered identified shipping assets, aircraft and London and New York real estate holdings. It provided in some instances for the sale of the underlying asset and the distribution of the net proceeds of such sales in 50% shares to each Party. In all respects other than the specific distributions set forth in its terms, the Partial Distribution Agreement "ratified" and continued in full force and effect the Private Agreement.
On February 20, 2002, while reciting the execution of the two agreements described above, tire Parties recognized that "various disputes have arisen between [them]" following that execution. Accordingly, on that date they entered into a "Heads of Agreement" in which the Parties "agreed to enter into a further Agreement". The document characterized this as the "New Agreement" and outlined its terms. The Parties decided to deal with their issues by separating the properties into two groupings, each consisting of properties to be owned by one of them, and intended to be, as near as could be, equal in value. In the event, the division was effected by two contracts executed as of March 13, 2002.
The "London Agreement" recited that the Parties "acknowledge and ratify the [Private Agreement and Partial Distribution Agreement] in relation to all the provisions contained therein and the obligations undertaken by them and the rights acknowledged to the Parties." It went on to provide the architecture of the division. Among other things, it provided for the sale to her brother of the Claimant’s 50% interest in an aggregation of American businesses and properties, referred to there and here as the "U.S. Companies." The London Agreement specified that it was to be governed by Greek law and that disputes under it were within the jurisdiction of the "Courts of Athens, Greece." It contained no arbitration clause.
Simultaneously, the Parties executed the "U.S. Agreement". Its recital "E" states that "VM and EMZ have acknowledged and confirmed that, since April 9, 1995, the date of their brother’s death, they have been entitled to enjoy equally in the value [sic] of [the U.S. Companies] and the benefits of ownership thereof, including but not limited to profits realized from the operations or liquidation of the assets of [the U.S. Companies], and wish to negotiate and distribute that value and those benefits." The U.S. Agreement set up a process for achieving this purpose that contemplated: (1) an accounting of the affairs of the subject companies during the relevant time period leading to a report detailing the auditor’s findings; (2) with the Report in hand, a period in which the Parties would "confer amicably and in good faith to agree on the amount of any distributions or payments that should be made in order to" realize the objective of equal distribution of the assets or their proceeds and of the earnings of the assets in the relevant period;(3) a determination as a result of this process as to "the extent to which [either Party] has received a disproportionate share of prior income or other distributions in respect of [the U.S. Companies]and the amount of such excess benefit (such amount the "Party Distribution")." If the process failed to achieve agreement on the amount of the Party Distribution, "the amount of the...Party Distribution...shall be determined by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules...and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof."(U.S. Agreement, para. 10). Paragraph 11 of the same agreement provides, in relevant part, that, "Any Party Distribution determined to be due from [either party] shall be paid by that party to the Trustee [designated in paragraph 4 of the recitals of the London Agreement] to be distributed for the benefit of the other pursuant to the terms of the London Agreement." The U.S. Agreement is to be construed and interpreted according to New York substantive law.
No part of the process laid out in the U.S. Agreement worked, except the final (and contested) reference of the Party Distribution determination to this arbitration. No "Accounting" was completed, no amicable process of negotiation was pursued, no agreed determination of the fact or amount of any Party Distribution was arrived at. Accordingly, Claimant filed a demand for arbitration.

B. The Jurisdiction of the Tribunal.

After Claimant filed its Notice of Arbitration, seeking a variety of forms of relief, Respondent moved in the New York Courts to stay the proceedings on a number of grounds. This led to one of the many court decisions that form the background of the matter. The New York courts denied the stay and, recognizing that the arbitration clause was a narrow one, defined the specific ambit of this Tribunal’s jurisdiction. Zachariou v. Manios, 68 AD3d 539 (1st Dept. 2009). It found that Claimant’s notice of arbitration and statement of claim, fairly read as a whole, sought an arbitral resolution of "the limited issue of the amount of the...Party Distribution" a question the court had previously concluded was arbitrable. (See, Zachariou v. Manios, 50 A.D. 3d 257 (1stDept. 2008)).
The issue was revived before the Tribunal in preliminary cross-motions concerning the scope of these proceedings. The Tribunal, acknowledging the binding effect of the court’s decisions, concluded that the Claimant’s allegations that Respondent had received a disproportionate share of the income and benefits of the U.S Companies, even if those distributions had been achieved by clandestine means, were properly before it for resolution. It embodied its conclusion in a Decision and Order of July 2, 2010 (later amended to correct an unrelated error) with which familiarity is assumed.
Having now had the benefit of lengthy hearings and extensive briefing and argument, the Tribunal hereby reiterates its finding and conclusion that it has jurisdiction of the issues that this Final Award decides.


The Tribunal is called upon to decide whether Respondent has received what the U.S. Agreement denominates a "Party Distribution", and, if so, in what amount. As explained in the Decision and Order, and as applicable in this proceeding, a Party Distribution constitutes the extent to which Respondent "has received a disproportionate share" of the income or other distributions from the American assets enumerated in the U.S. Agreement during the period from April 9, 1995 to March 13, 2002.

A. The Claims.

Claimant seeks an Award determining that Respondent received in that period income and other distributions aggregating $43,682,472.65. Of this amount, Claimant contends, Respondent was obliged to pay one-half over to her. His failure to do so, according to her submission, results in his having received a disproportionate share of such assets in the amount of $21,841,236.33 (before interest), for which she seeks recovery.
The essential theory of Claimant’s case is that, among other things, her brother embarked on a conscious scheme to appropriate opportunities and use proceeds from the sale of United States assets for his own benefit. She alleges that this scheme entailed a number of sophisticated devices to make investments for Respondent’s own benefits and conceal them from her. In a number of cases Respondent is claimed to have used his long-time lieutenant in the United States, Spyro Contogouris, as a nominee and front-man in an effort to disguise the fact and extent of his own beneficial interest in transactions that yielded to him the benefits at issue here. Included in these alleged schemes was the use of funds transferred from the U.S. Companies to make investments called, in this case, the "Norse Pipeline", "Cresthill Property", and "eCitySuites" transactions.
Claimant also alleges that Respondent sent to Contogouris and his companies additional sums from the proceeds of the American assets that should be found to have been so distributed for Respondent’s benefit, and thus included in the calculation of his disproportionate share. This line of argument proceeds by claiming that large sums were transferred to Contogouris, either by direct payments or by authorization by Respondent of Contogouris’ use of U.S. Company funds, some for investments, some for the exploration (but not the consummation) of investments, some for transactions to be entered into by companies nominally owned by Contogouris, and some for Contogouris’ personal expenses. Here Claimant’s argument rests on the premise that the evidence shows a pattern of completely informal, rarely written, often amorphous arrangements with Contogouris, devoid of any meaningful reckoning, that allowed Respondent to use Contogouris as a conduit for these funds to destinations that were intended to benefit Respondent. Claimant asserts these transfers have never been adequately explained by Respondent. The Tribunal is urged to infer from this state of affairs that the funds were intended for the benefit of Respondent and should be included in the calculation of the Party Distribution.
Claimant also asserts that a sum she calculates to be $17,977,562.19 was transferred to Respondent and other associates of his acting as fronts for him in Greece. These funds, she argues, came under his direct control, were available for his use, and were, in all meaningful senses, "received" by him so as to be included in his disproportionate share. Claimant also submits that U.S. Company funds were used to pay Respondent’s personal expenses in the amount of $46,572.37. She also alleges a scheme between Respondent and Contogouris to postpone until after the March 2002 settlement date the receipt by the U. S. Companies of $777,420.34 in tax refunds for periods preceding the settlement; these funds, too, she claims should be included in calculation her brother’s disproportionate share despite their successful concealment until after the period notionally set forth in the U.S. Agreement.
Finally, Claimant characterizes this proceeding as a breach of contract case and the monetary award she seeks as damages for such breach. Since the U.S. Agreement is governed by New York law, she claims the pre-award interest mandated for such damages by Section 5002(a)of the New York Civil Practice Law and Rules ("CPLR"). If all her claims were allowed, she calculates that interest, at the prescribed statutory rate of 9% per annum simple interest, as being $27,853,106.69 through the date of the arbitration hearing.
The total amount Claimant seeks under these various heads of claim is $49,694,343.02.

B. Respondent’s Case and Counterclaims.

Respondent poses a threshold challenge to the arbitration based on an alleged failure of a condition precedent to Claimant’s right to maintain it. Paragraph 11 of the Agreement provides that this arbitration shall occur if the auditor referred to in preceding sections "is not, for any reason not attributable to an act or omission of EMZ [Claimant], able to complete the Accounting or the Report within one year from the date of the London Agreement...." Respondent contends that the failure of the Auditor to complete the audit was Claimant’s fault, and that the arbitration proceeding must therefore be dismissed.
On the merits, Respondent asserts first that some of the amounts sought by Claimant had already been shared with her pursuant to the U.S. Agreement, and that his obligation as to those amounts has been satisfied.
His main line of defense as to the contested transactions is that he never "received" the funds in question. He argues that Contogouris was not his agent, front man or collaborator in the questioned transactions. Rather he argues that Contogouris was a faithless employee who abused his position of trust and confidence with Respondent to embezzle the funds in question for his own use, and (among much else) he points to the litigation between them and criminal charges brought against Contogouris (although dropped by the prosecutors) as support for this contention. In his submission, any effort by Claimant to recover those funds from Respondent must be predicated on allegations of breach of care or fiduciary duty on his part, or on fraud. All of these causes of action, Respondent insists, are remitted by the various contracts to other fora and are outside the jurisdiction of this Tribunal as laid out by the terms of those contracts and the court rulings interpreting them.
Respondent asserted certain counterclaims. Initially the counterclaims were filed with Manios' answering statement. By its Decision and Order of July 2, 2010 Tribunal dismissed them. Later, in its initial Post Hearing Memorandum of March 20, 2013, Respondent revived those counterclaims. Respondent sought actual damages in the total amount of about $8,173,656.55. The counterclaims were opposed by Claimant.

C. Burden of Proof.

The U.S. Agreement defined "Party Distribution" to mean that one Party "received" a disproportionate share of the flow of income or distributions from the American assets. In the Decision and Order setting the ground rules for this proceeding, the Tribunal held that the Claimant had the ultimate burden of proof to establish the existence and amount of such disproportionate share of received benefits. It was also held that the fact that benefits were received by subterfuge or stealth did not exempt them from being included as part of a Party Distribution, and that—particularly in the case of benefits claimed to have been received clandestinely—such a burden could be met by circumstantial evidence that, if not refuted or explained, led to a reasonable inference that such funds had been "received" by Respondent. It was emphasized, however, that such inferences would not be lightly drawn from the mere fact of Respondent’s superior access to and knowledge of the affairs of the business and that the probative value of the circumstantial evidence would in each case be carefully scrutinized.
It was made clear by the Tribunal on several occasions during the proceedings that, for purposes of the U.S. Agreement’s definition, funds were "received" by a Party when that Party exercised dominion and control over such funds whether or not they actually passed into that Party’s accounts. Funds diverted to others by whatever means by Respondent for his benefit and use are, in this sense "received" when they were first deployed for such purposes, regardless of the success or failure of the transaction for which they were so deployed. Circumstantial evidence aimed at proving this kind of receipt therefore must lead to an inference that the Respondent authorized the use of the funds and intended to benefit thereby.
That evidence has been voluminous and extremely detailed—consisting of ledgers, accounting records and reports, correspondence, records of cases in several American and Greek tribunals, and testimony both live and by witness statements and depositions. It represents the yield of years of litigation among Manios, Zachariou, and Contogouris. It has all been most carefully considered in light of the ultimate facts it has been offered to prove or refute. Its significance and probative value have been ably argued in several rounds of extensive briefs, and in both interlocutory and extended closing oral arguments. The findings and conclusions set forth in this Award are based on the considered judgment of the Tribunal after careful study of the evidence and the arguments and on the Tribunal’s collective appraisal of the demeanor and credibility of the witnesses, particularly the principals, whose testimony was adduced.

D. Summary of Findings and Conclusions.

Based on the process described above, and for the reasons briefly summarized in the succeeding portions of this Award, the Tribunal finds and concludes as follows:

1. Respondent has not established that the failure of the appointed auditor to complete its report was due to any act or omission on the part of Claimant, Consequently, the condition precedent found in the U.S. Agreement, para. 11 has been satisfied, and the arbitration may properly decide the merits of the controversy.

2. Claimant has satisfied her burden of proof as to tire claims asserted with respect to the Norse Pipeline, Cresthill Property and eCity, and as to the tax refund and Manios’ personal expenses.

3. As to the other claims, either Respondent has established a defense that the Tribunal accepts or Claimant’s case, taken as a whole, does not establish the requisite dominion and control by a preponderance of the credible evidence.

4. The claim for New York statutory interest is denied, but, exercising its discretion under the AAA’s Commercial Arbitration Rules and the applicable authorities as explained below, the Tribunal awards simple interest at the average rate for 10-year U.S. Treasury bills as of 2000, running from January 1, 2001 through December 31, 2013.


Respondent has contended, although with decreasing conviction as the proceedings went on, that the failure of the appointed auditor, Deloitte, to complete the report called for by the U.S. Agreement within the time specified by that agreement was the fault of a series of acts or omissions of Claimant. Consequently, so the contention runs, this arbitration is barred by the failure of a condition precedent to its being maintained. The evidence at the hearings was convincing that there is no merit to this assertion, and it borders on the frivolous. The Tribunal finds that the failure of Deloitte to complete its assignment was primarily attributable to the stubborn refusal of Respondent to comply with his obligation to take "all reasonable steps" to furnish in a timely manner access to the documentation and personnel needed by the auditor to complete its assignment under the Agreement. Both Deloitte’s engagement chief and Respondent’s accounting expert credibly testified that Deloitte lacked sufficient information to make the required report within the specified time. The overwhelming preponderance of the evidence establishes that the lack of information resulted chiefly from Respondent’s intransigent behavior.
For purposes of this Award it is unnecessary to detail the fits and starts by which incomplete access to the books and records of the U.S. Companies and pertinent materials in Greece were extracted from Respondent and his agents. It is sufficient to say that the process was slow, and in any case incomplete. The Tribunal also regards it as important that Respondent never permitted access to Respondent’s assistant, Ms. Joanne Korbakis, whom the evidence throughout the case depicts as the person possessing singular and comprehensive custody and understanding of the records involved in this process.
The specific charges of delay leveled against Claimant are all without merit.
Respondent asserts that Claimant unreasonably delayed engaging Deloitte until September 2002. The evidence convincingly shows that preparatory work for the accounting began before then; that the inability of Respondent to wrest control of the American books and records from Contogouris before that period prevented him from delivering any access to them until then; and, in short, there was nothing for Deloitte to do before then that warranted the expense of formally engaging them.
Respondent charges that Claimant should have extended the deadline for Deloitte’s report. Claimant was under no obligation to do so. Moreover, the evidence convincingly shows that such an extension would have made no difference, since—even with an undeclared and informal extension of half a year—Deloitte never received the information and cooperation it required.
Respondent charges that Claimant was not diligent in pursuing data that were available, but the credible evidence is to the contrary. Respondent charges that Claimant instructed Deloitte to suspend its work in December 2002. The evidence actually shows that Claimant requested Deloitte to wait until it received certain data before it continued with a computerized program to reconstruct the U.S. Companies’ withheld ledgers in order to avoid unnecessary expense. The instruction was, under the circumstances, reasonable, prudent, and, in any event not the cause of Deloitte’s inability to complete its work. It was likewise prudent and reasonable for Claimant to try to control the expense of an increasingly futile endeavor by negotiating a discount with Deloitte and there is not a scintilla of evidence to show that this had anything to do with Deloitte’s failure to complete its work.
The evidence thus does not support Respondent’s charges on this point. What this evidence, taken as a whole, does show is a continuous and consistent pattern of resistance by Respondent to required disclosure of information and materials that has greatly complicated the process contemplated by the U.S. Agreement in general and this arbitration in particular'. The Tribunal will have occasion to revert to this fact in its allocation of the costs of the proceeding.


Certain general observations are necessary before turning to the specific transactions for which Claimant seeks recovery. The Tribunal finds, on the basis of the preponderance of the evidence, that Respondent and Spyros Contogouris had a close and continuing business relationship during a crucial portion of the relevant period that vested in Contogouris wide and in some cases unbridled discretion in the handling of the U.S. Companies and the flow of funds they generated. This relationship was entirely informal, undocumented by any contracts or other formalities that defined its purposes, terms, scope of responsibilities or authority, compensation arrangements or other provisions normally to be seen in relationships of the magnitude this one took on.
Under the arrangement, millions of dollars were transferred back and forth on the basis of oral instructions; millions were made available for investments—often through intermediaries and nominees of which Contogouris frequently was one. The funds generated by the sale of investment properties were deployed by Contogouris on the basis (at best) of general understandings between him and Respondent as to business strategy. These transactions were for the most part cloaked in confidentiality; sometimes their existence and financial aspects were concealed behind shell corporations (some controlled nominally by Contogouris), nominees whose principals were undisclosed, and sham transactions whose reality was known to the principals who in turn relied on their relationships and a handshake for assurance that each would do his part to achieve the intended result. The evidence is persuasive that all this was typical of Manios’ general manner of conducting business, and his testimony before the Tribunal confirmed that fact.
The financial dealings between Respondent and Contogouris were unevenly supervised by Manios and his staff. Some matters received close and careful attention—usually from Manios’ staff rather than from him. Other matters were supervised lightly or not at all. In many cases such "supervision" may have been handled orally or through intermediaries who kept scant, if any, records of their interactions, leaving the evidence of such oversight entirely to the now often conflicting recollection and testimony of the actors.
Such a haphazard business arrangement, with such flimsy supervision and accounting procedures, and huge sums in play, was, of course, ripe for abuse and fraud. Eventually, Manios and Contogouris fell out, and Manios for several years pursued civil and criminal claims against Contogouris, the gist of which was that he had abused Manios’ confidence and had appropriated for himself opportunities and assets that belonged to Manios. Contogouris, in broad terms, defended against these proceedings on the ground that Manios knew all about what he was doing and authorized it. None of these various litigations led to a definitive resolution of the charges.
Claimant has painstakingly established the reality of the business practice and style summarized above. From it she urges the Tribunal to infer that all the funds that the evidence shows flowed from the U.S. Companies to Contogouris or the companies owned in his name were deployed under the authority of Respondent and for his ultimate benefit. Respondent, faced with the same body of evidence, urges the Tribunal to draw the conclusion that the same transactions constituted frauds perpetrated on him by Contogouris, unauthorized by him and intended by Contogouris for his own benefit.
The Tribunal concludes that such a binary approach neither fits the evidence nor permits it responsibly to discharge its duty under the U.S. Agreement. For one thing the fact, if it be so, that Contogouris swindled Manios in many of their dealings does not mean that he did so in all of them. The Tribunal therefore must examine the degree of Manios’ involvement in the challenged transactions to determine whether the evidence supports the charge that Respondent authorized them and stood to gain from them.
To be sure, the Tribunal recognizes that Manios’ conduct of the U.S. Companies, as briefly described above and as more massively demonstrated by Claimant’s proof, might give rise to claims in her favor on theories of negligence, breach of fiduciary duty, or fraud, even as to transactions where Contogouris cheated Manios. However the Tribunal has neither authority nor occasion to consider such theories which are all outside its jurisdiction.
The crucial question in each of the specific transactions involving Contogouris that Claimant charges was used to benefit Respondent is whether the preponderance of the evidence supports the inference that Claimant directed it and intended to benefit from it. The Tribunal holds that Claimant has met that burden with respect to Norse Pipeline, Cresthill Properties, e-City Suites and certain anticipated tax refunds, as discussed next.

A. Norse Pipeline.

Entities nominally controlled by Contogouris invested a total of $3,913,076 in the Norse Pipeline during the relevant period, and the cumulative evidence supports the inference that this amount was invested at Respondent’s direction and for his ultimate benefit.
By 1999 Respondent and Contogouris were engaged in seeking out prospects in which the proceeds of the sale of the Texas buildings owned by the U.S. Companies could be invested. Manios had Peter Hinofotis, a friend since childhood, analyze Norse Pipeline as an investment opportunity. He did so, reporting back barely a month after the London and U.S Agreements were signed. Respondent paid Hinofotis for his efforts. Similarly he engaged and paid one Jim Gayle to explore the same investment, and Gayle reported his views to Manios as well. In his testimony, Manios acknowledged his interest in making the investment, although "after finalizing [it] with my sister."
Manios, despite his testimony to the contrary, did no such thing. Notes of a meeting in Los Angeles, attended by his attorney, Sioufas, within a week of Gayle’s report do indicate that he planned to present the opportunity to "Liza" (Claimant) within a week and get her answer "as to whether she is in or out". But, in testimony the Tribunal finds credible, Claimant denied ever having been informed of the investment by Sioufas or anyone else.
The way the investment was made corroborates that Respondent wanted to hide it. Contogouris at about this time created an entity called Schanson Realty, which became the conduit of most of the investment in Norse. Claimant has laid out from the contemporaneous records a paper trail evidencing sham transactions for which Schanson was paid commissions. For example, some $1,500,000 was invoiced to Respondent’s company for commissions in connection with the sale of the Texas buildings. That transaction occurred months before Schanson was formed, and commissions had already been paid to another entity identified in the sale documents as the only one entitled to a commission on the deal. Once received by Schanson, the funds were transferred the next day to the escrow account of the law firm representing the U.S. Companies, from which they were paid out to Norse within a few days, and recorded by Norse as equity. The contemporaneous records indicate the purchase of 50% equity in Norse was confirmed by Norse to Schanson. Schanson’s total interest, according to the Norse partnership agreement was 76%. The total amount invested in Norse by Schanson was $3,913, 076, paid during a period in which Schanson received from the U.S. Companies a series of sham commissions and fees that substantially exceeded that amount. The Tribunal concludes that the evidence supports an inference that the entire Schanson investment was funded by the U.S. Companies through these payments.
Once the investment was made, it was assiduously monitored by Respondent’s staff. Ms. Korbakis kept massive files in Greece, which she diligently kept current as demonstrated by toe correspondence in evidence. The files tracked the operational and financial activity of Norse in remarkable detail over a period of several years. Some of the material in the file bears Manios’ handwriting—which he acknowledged in testimony while continuing to profess ignorance of how or why the files were accumulated.
Respondent offered no coherent explanation of why the payments to Schanson had been made in such a clandestine way or why the company had been so closely monitored on his behalf for years after the initial investment. His testimony that he had only considered the possibility of an investment but never made it is inconsistent with a massive body of evidence to the contrary and the Tribunal rejects it as obviously untrue.
Accordingly, this claim is sustained in full.

B. Cresthill.

After the sale of the Texas buildings, the evidence shows that the U.S. Companies undertook expansive efforts to reinvest the proceeds in real estate assets, on advice that it would be advantageous from a tax viewpoint to do so. Manios was aware of these efforts and in some cases gave documented instructions to associates concerning their investigations. The expenses of this undertaking were borne by the U.S. Companies and tracked by Manios’ assistant, Korbakis. The search focused on properties in Las Vegas and California.
In November 1999, Prestige Holdings, the holding company of the U.S. Companies, transferred $2,200,000 to the firm of Gelfand, Rennert & Feldman. The transfer was recorded by Korbakis as of November 8, 1999 in the ledger she used to track Prestige’s finances, and her undisputed deposition testimony is that she informed Manios that the payment had been made. The evidence shows that of these funds, $1,517,591.74 (in two tranches) was used to purchase a California property known as Cresthill. On the strength of the contemporaneous records kept by his staff, and later judicial assertions by his counsel during litigation against Contogouris, the Tribunal finds that this series of payments establishes Manios’ contemporaneous intent and direction to make the Cresthill investment.
Thereafter, tire evidence indicates that $38,601.67 was directly paid by the U.S. Companies, and another $770,181.20 by entities controlled by Contogouris, who the Tribunal finds was at the time acting in this investment as a front for Manios, all for renovations of the Cresthill property. The total amount of U.S. Company funds used for Cresthill came to $2,326,377.61, all of which the Tribunal finds, on the evidence it accepts, was authorized by Respondent and for his benefit.
When Manios and Contogouris fell out, Manios took the position that Contogouris had not been authorized to make these payments, but the Tribunal concludes that this position does not square with the evidence before it now. It further appears that Contogouris did misappropriate title to the property and he transferred the improved property to his brother at the end of 2002. Manios, it also appears, directed Contogouris to sell the property and return the money to the U.S. Companies. Contogouris did neither; his family kept the property and he kept the money (attributing it to a fictitious "success fee" on another transaction). In his eventual settlement with Contogouris, Respondent acquiesced in this outcome.
As indicated above, the requisite "receipt" by Respondent occurred when he exercised dominion and control over the U.S. Company funds by allowing their expenditure for the acquisition and renovation of the property for his benefit. That his objective was frustrated by Contogouris’ fraud on him does not change this analysis or alter the outcome.
The Tribunal concludes that the entire amount devoted to the Cresthill property were funds received by Respondent in the amount of $2,326,377.61that he was obliged to share with Claimant.

C. eCity Suites.

Claimant alleges that Respondent received a Party Distribution in the amount of $5,107,025.97 as the result of a series of funds transfers, totaling that amount, that she characterizes as an investment in eCity Suites. The preponderance of the evidence supports this allegation.
The U.S. Companies had sold the 2100 WLS Building in December 1999 to Ashford Loop Associates in a deal that contemplated that a portion of the compensation would be paid to the seller in the form of "earn-outs". These were tied to the buyer’s success in renting out space in the building. The U.S. Companies embarked on a program designed to incentivize potential tenants by undertaking to reimburse a portion of the rents they paid to Ashford Loop.
Beginning in March 2000, U.S. Companies began making payments to a tenant, e-City Suites that Respondent now contends were all a part of this reimbursement program. Claimant, on the other hand, contends that Respondent had agreed to fund the operating deficits of eCity in order to procure an equity position in the business. The evidence supports the latter account of the payments.
The economics of Respondent’s explanation make no sense. The U.S. Companies, in the relevant period, made payments directly to eCity Suites of $2,487,168.46; another $2,619,857.75 was transferred from the U.S. Companies to e-City Suites through various conduits controlled by Contogouris. The Tribunal finds that Contogouris was acting on behalf of Manios in these transactions. The total amount was shown to exceed both the rent reimbursements paid to all other tenants combined and the total net earn-outs produced by the e-City leases that, according to Respondent, the payments were supposed to generate.
The payments were made in large sums consistent with Claimant’s theory of their purpose, and utterly inconsistent with Respondent’s. Some of them were labeled with legends attributing them to investments in preferred stock. Other correspondence also referred to amounts transferred as being investments. The persons involved in the transactions who have given depositions in the past all testified to their understanding that Manios was funding the eCity deficits. And Korbakis kept track of the payments and volumes of e-City accounting records. Respondent’s testimony about this series of transactions and the evidence with which he was confronted was contradictory, confused and ultimately not credible.
In short, the totality of the evidence accepted by the Tribunal supports the charge that the entire amount shown to have been transferred to e-City Suites, totaling $5,107,025.97, were proceeds of the covered property that Respondent was required to share with Claimant.

D. Tax Refunds

In July 2000, Respondent was alerted by materials sent him by Contogouris that the valuation of the U.S. properties that was then being done with a view to a possible asset swap should take into account the expectation that the U.S. Companies would receive a tax refund in the approximate amount of $800,000. As it turned out, the amount of the refunds was $777,420.34.
When tire refunds were paid, they were deposited into accounts maintained by Schanson Capital Management, rather than the U.S. Companies. Claimant offers evidence through the affidavits of Ray Rekuc and Lisa Serwin that this was done pursuant to directions from Manios or Korbakis. Respondent challenges the credibility of Rekuc’s affidavit, but not Serwin’s. Respondent’s case is that Contogouris simply stole the money, and he claims not to have known of the forthcoming refunds. He offers no other evidence to support his contention that the activity was that of Contogouris alone. On balance, the Tribunal finds that the tax refund was diverted from the U.S. Companies with Respondent’s approval, and that he intended the concealment of that refund to benefit him.
Accordingly, the Tribunal concludes that the full amount of the tax refund constitutes a payment received by Respondent that he was required to share with Claimant.

E. Personal Expenses.

Claimant has established that the U.S. Companies paid a total of $46,572.37 for personal expenses of Respondent. Respondent does not contest the amount and conceded that such payments should have been shared with Claimant. Accordingly, the full amount sought under this head of claim will be taken into account in determining the Party Distribution.


As to the other bases for relief put forward by Claimant, the Tribunal finds that they must fail, each for somewhat different reasons. This is true of the claims based on the Decana condominium project; the funds transferred to Respondent’s control in Greece; and the wider claim that the Tribunal should infer "that all funds sent to Contogouris and his companies were for Respondent’s benefit" and find them to be Party Distributions.

A. Decana

The evidence concerning the expenses incurred to turn the Decana into a condominium is too inconclusive to warrant a finding that the expenditures constituted a Party Distribution.
It is uncontested that Manios and his colleagues, conspicuously including Contogouris, believed that the highest and best use of the Decana building in New York was as a condominium, and all knew that this would require considerable renovation to convert the use. The evidence shows that the project was broached to Claimant for her approval, and several times she declined to give it. It appears that these refusals were each enough to stop theproject for the time being. Sometime shortly before the agreements were entered into, Claimant was approached again. This time her response, according to the credible evidence, was essentially that Respondent could do whatever he thought best. Thereafter, and before the London Agreement finally devolved the Decana upon Manios alone, he allowed Contogouris to proceed with further renovations. The project, however, was not completed, and the Decana did not become a condominium.
This evidence could as likely support an inference of joint decision-making about the property’s development as it could the inference of a secret renovation project funded with U.S. Companies’ money that Claimant asks be drawn. The facts are as much consistent with a business judgment made, reversed, made again, reversed again, with Claimant’s views sought, received and acted upon, as it is consistent with a coup by Respondent to grab for himself the enhancements that were intermittently made to the building. This is insufficient to sustain the burden of proof Claimant bears on the Decana claim.

B. Claimant’s Demand for 50% of the U.S. Company Funds Transferred to Manios’ Control.

It is common ground that during the relevant period a total amount of $15,710,699.70 was transferred to company accounts that Manios controlled in Greece. Claimant seeks an Award allocating 50% of that amount to her. The Tribunal concludes that such an award is not possible on the record before it.
Respondent’s defense to the claim is his assertion that these transferred funds were already split with his sister either in cash distributions during the relevant period or in the value of assets distributed to her under the London Agreement. He resists producing an accounting of these funds on the ground that the matter has already been dealt with in the report and letters of Moore Stephens (Greece) about those funds and the Greek litigation and arbitration that ensued over the Moore Stephens work product.
Claimant offers no proof at all in support of her assertion that she is entitled to 50% of these funds. In closing arguments, counsel for Claimant acknowledged, under questions from the Tribunal, that Claimant had received distributions in connection with the 1999 agreements, and since. He stated that Claimant’s side "could not verify" whether she received some of the $15.7 million at issue in this prayer for relief, but admitted, "I expect we might have." Pressed further, he stated that Claimant did not have an estimate of how much was received from this fund.
Claimant insists that in this situation, given Manios’ control over the books of the companies, the Tribunal should draw an adverse inference from his refusal to produce an adequate accounting and find that the $15.7 million was not split, and award 50% of it to her. Given Claimant’s position on closing arguments, such a finding would be unfounded. If, as in substance admitted, Claimant had received some split of the funds in an amount Claimant cannot estimate, the inference and conclusion Claimant urges would result in an obvious windfall to her. If the Tribunal were moved to draw an inference that a split had been made, but in some percentage below 50%, there is nothing in the record that would allow it to make a principled selection of the amount of the fund that should be declared a Party Distribution.
Moreover, this very question was raised in the preliminary phases of the case and led to the guidance contained in Part III of the Tribunal’s Decision and Order. The Tribunal cautioned there that, "A showing that funds...disappeared while Respondent had knowledge and control of the business superior to Claimant... does not by itself establish..." that Respondent received a disproportionate share of the income or distributions from the covered properties. The Decision and Order also warns that any adverse inference requested to be drawn from a refusal to produce documents "must be given special scrutiny" to avoid a violation of the limits set by the courts on the Tribunal’s authority. The requirement laid down in the Decision and Order for a "predicate showing" is not satisfied by a failure of any proof on the question. It is noteworthy that in this connection, Claimant did not seek the assistance of the Tribunal when it encountered in discovery the resistance of which she now complains.
Respondent, for its part, urges that the Moore Stephens report answers the question of what happened to the funds and whether they were split. It also asserts that the findings of the arbitration panel in Greece are conclusive on the subject. The Tribunal finds this argument somewhat exaggerates the clarity brought to the issue by the Moore Stephens Reports. The first such report, dated June 17, 2003, does not exclude the flow of funds from the U.S Companies, but, in the words of their explanatory letters, "has taken them into consideration." It is unclear what exactly that means; in any event the attached distributional schedules do not identify the proportion, if any, of the amounts due to Claimant that derives from the U.S. Company remittances to Greece.
The Tribunal holds that Claimant, on the whole record bearing on this head of claim, has failed to sustain her burden of proof.

C. Claimant’s Claim that all funds that went to Contogouris should be treated as Party Distributions to Manios.

The Tribunal is constrained to reject Claimant’s claim that all the U.S. Company funds that went to Contogouris or his companies or associates qualify as Party Distributions unless the transactions are explained in an exonerating way or the inference is otherwise refuted. Claimant argues that, since Claimant has not shouldered his burden in that regard, the Award should include all such payments.
The argument starts with the established disarray of Manios’ methods of business, particularly as they relate to Contogouris. It gathers force with considerable evidence of Respondent’s frequent lapses of memory and candor. It concludes with the assertion that Manios must establish that he did not authorize or have an interest in the transactions by which the Contogouris interests received moneys from the U.S. Companies. This reverses the burden of proof the Tribunal articulated at the outset of the case. It also ignores the quite massive evidence that Contogouris did perpetrate widespread and sophisticated theft and fraud on Manios and the U.S. Companies. Without excluding the possibility (as previously noted) that Manios may be liable in other fora on other theories for the way he conducted the business he owned jointly with his sister, the Tribunal, having studied with care the submissions of Claimant on the transactions and business practices that comprise the body of this claim, concludes that Claimant has not sustained her burden of proof on these items, except for those dealt with in Part IV, above.

D. Other Claims.

Any other claims asserted by either Party have been considered and, with the exception of Claimant’s application for pre-Award interest, (discussed next) they have been found to be without merit.


Claimant seeks pre-award interest at the simple rate of 9% per annum from the date of the accrual of her right to each Party Distribution to the date of the Award. The claim is based on her assertions that the U.S. Agreement is governed by New York Law, and that Section 5001 (a) of the New York CPLR requires that interest be awarded at the statutory rate "upon any sum awarded because of breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property." She contends that she is "entitled to interest on any monetary sum to which she is entitled under the U.S. Agreement because her claims are predicated on Respondent’s having deprived her of possession and enjoyment of property to which she was entitled under that agreement." (Cl. Post-Hearing Memo., p. 115 (Emphasis added). While recognizing that "the claim asserted by Claimant here—determination of an amount due under a contract—is somewhat unusual" (ibid.), ' she nevertheless insists on her claimed right to the statutory interest.
Claimant’s argument is misconceived. The U.S. Agreement itself gave rise to no right of possession or enjoyment of property in her favor. The rights she has to such possession or enjoyment stem from the Private Agreement of 1999. And if she is entitled to any amount for breach of a contract, that contract is not the U.S. Agreement, but the Private Agreement of 1999. The U. S. Agreement merely provides an agreed process by which the extent of those rights may be measured and declared through an accounting, negotiation or arbitration. The Private Agreement of 1999 is governed by Greek, not New York law, and, accordingly, the provisions of CPLR 5001(a) do not apply.
Two features of the U.S Agreement do bear on the present issue. First, it commissions the Tribunal to determine and declare a value for the Party Distributions, if any exist. That is the limit of its authority as the cases interpreting the U.S. Agreement explicitly hold. This arbitration is thus analogous to the one considered in Finger Lakes Bottling Co., Inc. v. Coors Brewing Co., 748 F. Supp. 2d 286 (S.D.N. Y. 2010), where the Court held that an arbitration to determine a value—there the fair market value of a business—did not trigger CPLR 5001(a). The same is true under the U.S. Agreement.
Second, in the private ordering of their affairs that the U.S. Agreement represents, the Parties specifically adopted the Commercial Arbitration Rules of the AAA. As a matter of law, that selection did not waive interest, as asserted by Respondent (Resp. Post-Hearing Reply Br., p.88), but, rather, incorporated those rules into the U.S Agreement. Rule R-43(d)(i), in turn, provides that the award of the arbitrators may include "interest at such rate and from such date as the arbitrator(s) may deem appropriate...The award of interest, and the rate and timing of any such interest is, therefore, a matter of the Tribunal’s discretion.
When Respondent failed to make available to Claimant her equal share of the benefits he received in the transactions discussed in Part IV, but retained that share for himself, he also acquired the use of that share for the period he has held it. In its discretion, the Tribunal concludes that pre-award interest should be determined and declared to be due in an amount and for a period that approximates as well as possible what the Claimant could have earned from the Party Distributions during the relevant period. The New York statutory interest rate not only is not required by applicable law, but it would bestow on Claimant a significant windfall, in light of the substantial decline in rates over the period covered by this Award.
The Parties have disputed how the Tribunal should exercise its discretion and discern an interest rate that would compensate as well as possible Claimant’s loss of the use of the Party Distributions, as well as giving recognition to the macroeconomic conditions during Respondent’s retention of those benefits. Respondent, while holding to its position that Claimant should be awarded no interest, proposes that any interest the Tribunal chooses should be no more than the allegedly risk-free rate offered by the 90-day Treasury bill. He offers extensive commentary by his expert witness about the interest rates in effect for instruments of various maturities extending back to the 1980’s. The expert also expounds on the "real interest rate" said to be the difference between the interest rate charged and the contemporaneous rate of inflation, and urges the Tribunal to employ that method.
Claimant, while holding to its position that only New York statutory interest will do, argues that there was nothing risk-free about the loss of use sustained by Claimant, and that the use of the 90-day Treasury-Bill rate, is arbitrary and would impose still further damage on Claimant.
In the course of this argument, the Parties have relied on, and furnished to the Tribunal, ample data taken from official public sources from which the Tribunal can select an appropriate rate in its judgment, without the need to hold further hearings on the subject. Its independent study of the agreements in evidence also shows that, in the analogous situation envisioned by the Partial Distribution Agreement of October 1999, that contract designated the LIBOR rate as applicable to delayed transfer of the assets covered by its terms, but no evidence on that rate was offered.
In this case the Tribunal, after careful consideration, concludes that interest should be awarded at the average rate for the 10-year Treasury Bill in effect for the year 2000, i.e. 6.03% simple interest. AU of the Party Distributions for which Respondent has been found responsible occurred during 2000. The fact that they were not so distributed left Claimant at the risk of adverse market fluctuations over the years since, with no way to hedge against them. The selection of the long-term rate in effect as of 2000 thus creates a situation in which, having failed to meet his obligations, Respondent bears the risk that the value of the Party Distribution will decline before its distribution. It affords Claimant compensation for the loss of her opportunities to invest in her judgment and at her risk either to profit from such investments or to preserve from adverse market conditions the capital she received.
The law of New York and the discretion created by AAA Rule 43(d) permit the Tribunal to select the dates on which such interest begins and ends, and where there are multiple dates that might be appropriate, to select dates of convenience that do substantial justice. Because Manios’ wrongful retention of proceeds occurred at various times during 2000, the Tribunal selects January 1, 2001 as the date on which Claimant could have received the totality of the sums now awarded and as the date from which interest should run. Because, as will be discussed next, the form of Award dictated by the U. S. Agreement involves a declaration of amount found to owing to Claimant but not an actual payment of this amount to Claimant without further proceedings elsewhere, pre-award interest should end as close as is convenient to the date of issuance of tills Award. December 31, 2013provides such a date and fixes the period during which simple interest runs as twelve years. Accordingly, aggregate interest of 72.36% of the wrongfully withheld proceeds will be added to their sum in determining the Party Distribution


In summary, as discussed in Part IV, above, the Tribunal finds that Manios received the following amounts from the specified transactions:

As to Norse: $3,913,076.00

As to Cresthill: 2,326,377.61

As to eCity Suites: 5,107,025.97

As to Tax Refunds: 777,420.34

As to Personal Expenses: 46,572.37

Total: $12,170,472.29

Of these receipts, Respondent was required by the agreements to pay over 50% to Claimant. He did not do so with respect to any of these receipts. That withheld portion is a "disproportionate share" of those proceeds, defined by the U.S. Agreement as the "Party Distribution." The Tribunal therefore concludes that the Party Distribution received by Respondent from these Transactions is $6,085,236.14.
As explained in Part VI, above, The Tribunal also finds that Respondent received the value of the use of the wrongfully retained proceeds from these transactions, as measured by the pre-award interest determined in its discretion by the Tribunal. That interest, consisting of the value of the use of the wrongfully retained proceeds that was received and kept by Respondent also constitutes a component of the Party Distribution. That amount is found to be $4,403,276.40.
The Total Party Distribution received by Respondent, as determined by the Tribunal, therefore is $10,488,512.54.


Paragraph 10 of the U. S Agreement provides that "[T]he amount of...the Party Distribution...shall be determined by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules...." That determination has been reached and summarized in the last section.
Respondent argues that this Award ought to go further and direct the payment of any amount determined to the incumbent Trustee designated in the London Agreement to be distributed according to its terms. Respondent relies on Paragraph 11 of the U.S Agreement which states that "Any Party Distribution determined to be due from either [Respondent] or [Claimant] shall be paid by that party to the Trustee to be distributed for the benefit of the other pursuant to the terms of the London Agreement."
The Tribunal concludes that Paragraph 11 imposes a duty on the party who is liable for a Party Distribution but does not confer on this Tribunal the authority to order the Party to make the payment to the Trustee. In the first place, the payor party’s duty arises whether the amount of the Party Distribution is fixed by negotiation and agreement, or the accounting process, or by an arbitration; Paragraph 11 says nothing about the arbitration or the arbitrators issuing such a directive. Moreover, reading the provision with the contemporaneous London Agreement shows that there are elaborate terms in that Agreement that affect how and when the Party Distribution is actually to be distributed. Finally, the present status of the Trustee appointed under the London Agreement and the interpretation of the letter of instructions that is his charter are both matters of dispute between the Parties, and are clearly matters for the Greek courts to resolve.
Accordingly, insofar as the dispute over the Party Distribution is concerned, this Tribunal will issue its Award in the manner of a declaration, determining only that Respondent did receive such a Party Distribution, and the amount thereof, as explained in Part VIII. In addition, the Tribunal, pursuant to AAA Rule 43(c), incorporated into the U.S. Agreement by the Parties and as discussed briefly next, will assess and allocate the costs and expenses of the arbitration and order payment of that amount within 30 days of the date of the Award.


As has been noted before, the evidence is pervasive and persuasive that Manios routinely conducted his affairs, as they pertained to his sister’s interests, in an elaborately camouflaged way that made it difficult then and now to analyze them. He did not change his ways in any material degree during the proceedings conducted under the terms of the U.S. Agreement, despite, in the Tribunal’s eyes, the good-faith efforts of counsel appearing in this case. He refused to give access to financial records of the U.S. Companies when he had them and thus contributed substantially to the failure of the Deloitte project and the start of these proceedings.
The same was true of his contractual obligation to give access to the present and, so far as possible, the former officers and employees of the U.S. Companies. While the agreement imposed those obligations on him explicitly in connection with the Deloitte work, he equally disrespected the good faith it necessarily required of him in these proceedings which were made necessary by the failure of the accountants’ efforts, Throughout the proceedings he was obstinate in his continued refusal to expose his records, and thus his affairs, to timely inspection or his colleagues to appropriate inquiry. Moreover, his repeated lapses of memory and his cavalier dismissal of evidence contradicting his own rang hollow during his testimony in the hearings.
The net effect of this behavior was to obstruct the efforts of the Tribunal to get to all the facts necessary to form the judgments called for by the agreement about the business affairs with which it dealt. That in turn required a much more laborious effort by counsel and the Tribunal to piece together the shards of evidence that were discovered and understand rightly the transactions that underlay them.
Given the constraints on the Tribunal’s authority imposed by the terms of the U.S. Agreement and the New York courts’ reading of those terms, this conduct is beyond the customary sanctions of exemplary damages or an award of attorney’s fees. However, its impact on the orderly, efficient and just resolution of the dispute is properly considered in assessing and apportioning the costs of the case pursuant to Rule 43(d).
The Tribunal must also note, however, that Claimant is not completely free of obligation for a share of those costs and expenses. In the first place, her resort to the arbitral process was a voluntary use of the forum made available by the U.S. Agreement. That agreement and the several that accompanied or preceded it all repeatedly instructed the Parties to bargain in good faith towards an agreeable, family-based resolution. The evidence and tenor of the case, and Claimant’s efforts to press some doubtful or extreme claims, all demonstrated that she had little inclination to follow those instructions, even if Respondent had attempted to do so. And so she was remitted to this forum to get what relief was available her; that outcome is not entirely without cost.
Balancing these considerations, the Tribunal finds it just to assess 75%of the costs and expenses to be borne by Respondent and 25% to be borne by Claimant, and the Award will so provide. The U.S. Agreement does not provide for an award of attorneys’ fees and the Parties have not sought one. Accordingly, none is made.



1. It is determined and declared that RESPONDENT, Vassilios Manios, received a Party Distribution as defined in the "U. S. Agreement" dated as of March 13, 2002 between him and CLAIMANT, Evangelia Manios Zachariou, in the amount of Ten Million, Four Hundred Eighty-eight Thousand, Five Hundred Twelve Dollars and Fifty Four Cents (U.S.$ 10,488,512.54.).

2. The administrative filing and case service fees of the American Arbitration Association, totaling $34,219.43, and the fees and expenses of the Tribunal, totaling $450,863.20, shall be borne Seventy-five percent (75%) by RESPONDENT and Twenty-five percent (25%) by CLAIMANT. Therefore, within thirty (30) days from the transmittal of this FINAL AWARD to the PARTIES, Vassilios Manios shall reimburse Evangelia Manios Zachariou the sum of $127,505.42, representing that portion of said fees and expenses in excess of the apportioned costs previously incurred by Evangelia Manios Zachariou, upon demonstration by Claimant that these incurred costs have been paid.

3. All counterclaims are dismissed as beyond the jurisdiction of this Tribunal.

4. This FINAL AWARD is in full settlement of all claims, counterclaims, and defenses submitted for resolution in this Arbitration. All claims and counterclaims not expressly granted herein are hereby denied.

5. This FINAL AWARD may be signed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

The Tribunal hereby certifies that, for purposes of Article 1 of the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, this FINAL AWARD was made in New York, New York, United States
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