NAVATEK CAPITAL INC, individually and derivatively on behalf of Nominal Defendant PacMar Technologies LLC, fka Martin Defense Group, LLC, fka Navatek LLC, Respondent/Plaintiff/Appellee, vs. MARTIN KAO, Petitioner/Defendant/Cross-Claim Defendant-Appellant and PACMAR TECHNOLOGIES LLC, fka Martin Defense Group, LLC, fka Navatek LLC, Respondent/Nominal Defendant/Cross-Claimant-Appellee.

The above-captioned case has been set for oral argument on the merits at:

Supreme Court Courtroom
Ali‘iōlani Hale, 2nd Floor
417 South King Street
Honolulu, HI 96813

The oral argument will also be live streamed for public viewing via the Judiciary’s YouTube channel at YouTube.com/hawaiicourts and ‘Ōlelo at olelo.org/tv-schedule/.

Attorney for Petitioner/Defendant/Cross-Claim Defendant-Appellant MARTIN KAO:
     Keith M. Kiuchi

Attorneys for Respondent/Plaintiff-Appellee NAVATEK CAPITAL INC., individually and derivatively on behalf of Nominal Defendant, PacMar Techonologies LLC, fka Martin Defense Group, LLC, fka Navatek LLC and Respondent/Nominal Defendant/Cross-Claimant-Appellee PACMAR TECHNOLOGIES LLC, fka Martin Defense Group, LLC, fka Navatek LLC:
     David M. Louie, Jesse W. Schiel, Nicholas R. Monlux and Timothy T. Silvester of Kobayshi Sugita & Goda, LLP

NOTE: Order assigning Circuit Judge Rebecca A. Copeland, due to a vacancy, filed 12/15/25.

NOTE: Order accepting Application for Writ of Certiorari, filed 12/23/25.

NOTE: Order granting motion to postpone the 04/08/26 oral argument, filed on 02/24/26.

NOTE: Certificate of Recusal, by Associate Justice Vladimir P. Devens, filed 05/04/26.

NOTE: Order assigning Circuit Judge Brian A. Costa, in place of Devens, J., recused, filed 05/04/26.

COURT: McKenna, Acting C.J., Eddins, and Ginoza, JJ., Circuit Judge Brian Costa, in place of Devens, C.J., recused, and Circuit Judge Copeland, assigned by reason of vacancy.

Brief Description:
This case arises out of a civil arbitration proceeding. Navatek Capital Inc. (NCI) and Martin Defense Group, LLC (MDG) sued Martin Kao (Kao), MDG’s former chief executive officer, for, inter alia, breach of fiduciary duty, fraud, and gross negligence after the U.S. Department of Justice filed a federal criminal complaint against Kao. NCI and MDG also sought damages.

After an indictment was returned, Kao filed a motion to stay the arbitration hearing pending the outcome of his federal criminal trial. The parties agreed that Keating v. Office of Thrift Supervision, 45 F.3d 322 (9th Cir. 1995) controlled whether the arbitrator could grant or deny the motion. The arbitrator applied the Keating factors and denied the motion to stay, then issued a final arbitration award in NCI and MDG’s favor, awarding them compensatory and punitive damages.

Kao filed a motion to vacate the arbitration award in the Circuit Court of the First Circuit (circuit court), arguing the arbitrator refused to postpone the hearing upon a “showing of sufficient cause,” in violation of Hawai‘i Revised Statutes (HRS) § 658A-23(a)(3), and also exceeded his authority by awarding NCI and MDG punitive damages, in violation of HRS § 658A-23(a)(4). The circuit court denied the motion to vacate and confirmed the arbitration award. The Intermediate Court of Appeals (ICA) determined the circuit court did not err by deferring to the arbitrator’s application of Keating and in concluding that he acted within his authority by awarding punitive damages.

On certiorari, Kao asks:

(1) Did the ICA grievously err when it affirmed the Circuit Court order confirming the arbitration award where: the Arbitrator denied Mr. Kao’s Motion to Stay Proceedings and refused to postpone the hearing until after the completion of a criminal trial against Respondent Martin Kao thereby denying him a fair hearing because he could not defend himself as he invoked his constitutional right against self-incrimination?

(2) Did the ICA grievously err when it affirmed the order confirming the award of punitive damages where: (a) this was a contract action, (b) [NCI] and MDG failed to show the wealth of Mr. Kao, and (c) neither the Operating Agreement or the arbitration agreement gave the Arbitrator the right to award punitive damages?

In addition, the Hawai‘i Supreme Court ordered supplemental briefing on the following two questions: (1) What constitutes “sufficient cause for postponement” under HRS § 658A-23(a)(3)?; and (2) What factors should be considered in deciding whether a civil proceeding in Hawai‘i should be stayed due to pending criminal charges based on Article I, Section 10 of the Hawai‘i Constitution?