was error for several reasons first under code of civil procedure section twelve eighty six point two subsection eight six a there is no evidence in the record or otherwise arbitration less one of the five statutory grounds not for vacating arbitration when there is not to be such an outcome and under twelve eighty six point two eighty six which is the subdivision that the district court applied here failure to disclose within the time required for disclosure a ground for the school for cation of which the arbitrator was then aware and no the six days of hearing had concluded six weeks before he issued his multi page award signed it on july nineteenth the testimony when counsel took his deposition was  he joined the new company in the july you know he didn't provide a precise date and if somebody joins in mid july i noticed this and saw the back and forth with the district judge when he was asking for a view of the timeline and the question was whether you use the word taint or began which verb and he ended up settling on begin i think we all know that you don't sort of walk in off the street and accept the offer of the job and accept the job on the same day of course we don't have in the record how long the negotiations might have gone on but if he begins the job and the july it's a fairly standard in france with that there were discussions about taking that job and he might have been accepted the job some time before that or for all we know because he's a lawyer by your reproductions was a prior client of his and us when in house we we don't know that that's not part of the record but on any attention and important things happened the months about this job that certainly is possible we don't know but that does not mean he knew the intricacies of the business of the company he was going to join the negotiations customarily would involve what his duties would be with his a company is going to know what companies doing i would agree that some point you must have learned about every deal in the works what is the fair inference that within four days let's assume the mid july is the fifteenth of july is that a fair inference that within four days he knows of every single negotiation contract deal that this multi faceted company has has made or is considering when there's a there's a learning  because the smell test is not the right test for an arbitration arbitration is a favorite remedy it's supposed to be well look this is something we've been we've been thinking about grounds are met then there cannot be an order vacating the award and the long held formula is under michael vietnam which has been followed there must be a when we're talking out of business or personal relationship a basis for just won't think asian it's got to be a substantial relationship involving financial considerations of the arbitrary and counsel from upon has not been able to point to a case nor am i aware of a case where have going in any one time i know if you go on the internet look up bob kerrey productions you have two pages of projects i know that they're known for the film crash which won the academy award two years ago there are you know an international company you know that's not quite my question how many projects will they have going at any one i have no idea but judging by my knowledge of the industry and comparable companies they might have ten fifteen twenty projects in development  a smaller number of production and you know one or two in principal photography and song after the fact this is this project that most would have been considered in development and how important a project was there's going to be well there's no movie that's been made here this is a project that you regency wasn't interested in that's how it came to not the way this works is alexandra milchan is a producer she has a deal with new regency she's supposed to bring products to them they were interested in this project her agent shopped around looking for someone to finance it apparently he found here eight and they were in negotiation for them to finance this project for her to produce it as far as i know it's never gone beyond that relationship have on this well there's no evidence that the people or alexander milton and mr ammerman even if they were friends no i'm talking i'm talking about her father almost beggars belief that he would not know that this young woman has a film a negotiation with the company he's about to join let's assume he knew that what's his relationship with her and even if he has financial consideration him that is the test now if the concern is this is some indication of corruption or maybe it's a quid pro quo there's a separate section for that but you need some evidence of that upon harold is a major film distributor in japan i'm supposed to see if now we can open up that pandora's box this is a circumstance of an industry over tradition where the parties specifically so let this individual because they knew him by mr sheppard's firm that he was going to be a witness in a case that he was going to be deposed in effect that's the deposition from which i believe they gather this information so this was an arbitrator who was aware of his disclosure requirements and in that regard it's important  times at starbucks people disclose everything because there's no harm in doing it but it's a very different matter when an incident comes up after sixty days of trial so that you only are to disclose at that point grounds for  because if you disclose for example i saw so and so would a party last week the other side has an absolute right to do over at that point they can say we don't want we don't exemption so you're only supposed to dispose grounds for th production deal with you regency where if she finds projects she has to bring them to them first they can decide if they want to produce them if they don't want to produce them they can if they wish allow her to shop it around elsewhere that's a relationship not an employee not an officer decisions in order to preserve public confidence in arbitrations we have to make sure that arbitrations are completely above board or if i can borrow from good fraser since observations we have to make sure that there is no duty to disclose and it's not a sort of an appearance of impropriety is we looking from the outside say well if he had known them but rather he had to know what's the standard of proof as to whether  submit however that unlike some of the other cases including schmidt's including michael this arbitrator did not submit a declaration to knowing that he without it in michael for example the arbitrator said hey i didn't know what not the relationship which the losing party is complaining about similarly engine that's the arbitrator said he i didn't know about the relationship that you're calling claiming in this case the arbitrator did not submit a declaration to that effect and i think the inference  reasonably be drawn from that that he knew otherwise he would have disclaimed i think secondly as i'm not sure which one of your honor's mentioned it in a previous argument but he was the c e o and chief administrative officer he  senior executive of this company he was a file clerk and i think the inference can be drawn that he knew most likely what was going on this was not a is really relatively small company are at that point i don't think there's a difference in the whole language as it relates to the grounds to disqualify there is a difference in the language in the michael case as to what is required to disclose i think of a six point two fletcher's question based on our record if there was a knowledge requirement here the inference can be drawn from two separate circumstances one the failure of the arbitrator to submitted declaration denying that he knew and secondly the nature of his position you know that so did the file any declaration did not file anything was invited to do so by any party i don't thought i did all that i could do which was ask the district court to allow me to take discovery and he did not allow me to do so i think it's not in the record but i didn't call the arbitrator and said t yes to that there's no that the record is silent but the but it would have been inconsistent with the district judge is denial of your request recovery for for them to have supplied a declaration from the arbitrator i don't think so i don't think so they could have submitted whatever showing they wanted to they wanted to make the district court didn't tell us when he did know either yes part of why he wasn't allowing discovery and he didn't say i don't want to hear from the arbitrator although in retrospect probably he didn't care to hear from the arbitrator i mean the just record i think is operating it's pretty clear from his comments that whether or not mr mr emerson knew about the relationship this was something that needed to a particular case and let's assume between corporation a corporation b and let's assume that unbeknownst to him i walk from starts doing work for corporation  he doesn't know about it but then at the end of the day you venders a two million dollar arbitration award in favor of a corporation the party that my law firm happens to be representing even though he doesn't know about it i think under those circumstances the old word would be set aside because the associate in this case the arbitrator didn't reveal something which could cause somebody reasonable doubt as to whether he was in fact impartial i think it's pretty hard to argue with that with that situation even though on my hypothetical the associate is totally unaware of the representation that's going on even though the associate is just a salaried employee he doesn't participate in any of my law for profits and that's sort of what we what is going on here the inquiry is when somebody knows the facts which somebody step back and question scratch their head and say gee i wonder if there was some impropriety here talks about corruption of the arbitrator and the michael cases and i'll read the relevant language to the court  yes this is michael well this is the issue of whether or not you can disqualify an arbitrator for failure to disclosing something that he was required to disclose independent of whether he knew about it or not page nine thirty seven of the michael case we now hold that we're an appraiser arbitrator fails to disclose matters required to be disclosed by section twelve a one point nine subsection this provides a ground for vacating an award so we with respect to judge a person's point doesn't subsection eight six true require knowledge i'm that should be disclosed nine thirty seven it is so under subsection he that the title of the section is the failure to disclose facts and it's quoted in footnote five of michael and it says in relevant car section twelve the one point nine subdivision in our state quote an arbitrator shall disclosed all parties the existence of any grounds specified in section one seven that doesn't stand in one way or the other about what the arbitrator has to know that is to say shall disclose what he knows without in korea shelled disclose after due diligence sell disclose what any damn fool would have known correct but the again i go back to the fact that if he wanted to tell us he didn't know about it he should have told us that the inference can be dry that he didn't know about it because of the nature of his job if i may because of the standard of review i think in this case is a fairly clearly erroneous and the legal standard to be applied is was there information that a reasonable person with the the relevant legal standard in all of these cases and it is it doesn't make a difference whether the arbitrator knew or didn't know and if you look at the schmitz case schmidt's is a case where the arbitrator did not know about the so called disqualifying information in the schmitz case there was a arbitrator he did not know  admittedly district court case the court concludes that the disclosure requirements imposed by both the rules and i was referring both to the international arbitration rule which are at issue here is also talking about some united nations rules as well but the court concludes that the disclosure requirements imposed by both rules necessarily implicates a duty to investigate whether instances of potential conflict exist now of course that case is not binding on this court but i think it's well reasoned in if i think it's a question of sound hostile let me ask you this you said that we were view the district judges findings knowledge not just should have no knowledge about actual knowledge we don't have something to which we have to give that sort of clear or factual finding deference yes actual knowledge is required then  the court hasn't it hasn't been the court in an interest that issue that's that's correct but again i don't think that actual knowledge is required because the schmitz case makes it clear that it's not required the district court case which i just cited  knowledge will require i think the inference can be drawn given the state nature of the of the position which the arbitrator held and i think we don't really know we don't have a the company was really we don't really know what they trust position last time we don't know about the other issue that you can switch to other issues that were stressed but one of them was that he had there's no evidence he had a personal financial scheme that i think he was personally involved with with  case that is the loose language it wasn't relied on by the court no court cites that language since it cannot be the case i would respectfully submit that that is a quite chilly there because if they go back to get an analogy they give about an associate in my office serving as that as an arbitrator he doesn't have a financial stake in any other work that my office does but if my office is representing an arbitrating party and he's the arbitrator i think that there's a that requires disclosure notwithstanding the fact that he doesn't receive money and i would respectfully submit that whether yari is a partnership and mr zimmerman is a partner as opposed to whether you are he is a corporation and he's an officer and that kind of distinction should not be relevant to trimming with the disclosure requirements are i mean the disclosure requirements are such that we want to have people to be confident that there wasn't something fishy corruption statute of twelve eighty six point two when that occurs arbitration awards are set aside and i respectfully submit then that you know i'm using up my time  they make any arbitration at work where the arbitrator essentially didn't do anything wrong appearances aside because he did in fact know and you know it's one thing to say that you're going to overturn because look at the thrust of all of these cases it is is can somebody standing back and looking at the overall can of the of events scratch their heads in question whether or not there believed what he says is really what you're saying you're saying all that says he doesn't know we're not going to believe him that that's another issue i mean if we're here for your honor is is thinking about at least conceptually and i hope we don't go there but if you're on there's no other data to that effect that's correct and he i think he should have submitted one but if you really have a relationship with this company and we go back there and we take his deposition for example you know then then what happens if he says i don't know if you that testimony itself may be compromised because of the relationship i mean i think we create a slippery slope if we say let's go back let's depose the arbitrator let's ask the arbitrator if you knew the arbitrator is still in business with new regency he's really got a motivation to and i don't mean to discredit the arbitrator at all but he does have some motivation to make sure that this arbitration award remains intact because he wants to curry favor with new regency the types of issues that we should be focusing on if the inquiry is what does this man actually biased how do we know if this man was actually biased unless we know first whether or not he knew about the underlying relationship and course you can't establish actual bias unless you know but i would submit in the cases are crystal clear on this schmidt's particularly of the california cases as well you don't have to do with stablished actual but i understand that i think the issue of whether he knew was an issue that is much more relevant when you're trying to establish that he's actually lives what we're trying to establish is if you look at the overall scheme of things here somebody could reasonably question and that's the legal standard somebody could reasonably question whether he's an object of late reasonably question whether or not his impartiality was compromised and if you can question it all you have to do is object if we can reasonably question that and the laws crystal clear in california and even in the state courts that you have to take it in and it's unfortunate that we have to go back and we arbitrate a case with going back to the first comment i make because arbitrators have so much power we have to put a premium on arbitrator impartiality and because those powers it's a great we have to require it can come of that avoidance of any impropriety well to do just counsel points i think you were being asked to disregard if not override a california statute you can read from any of the cases that you want about an arbitrator's duty to th we all arbitrated on the basis of california law we haven't we haven't addressed that i think for good reason this is not a point well taken but to go back to the point i was making the issue is one of the statutory requirements for vacating an award status by here and that statutory provision requires knowledge there is no evidence one way or the other on that and he was reasonable and questioned by well this is not a natural bias case this is a disclosure case they have not circumstantial evidence and you want to say you know with some plausibility the circumstantial evidence is not enough to rise to the standard of proof by which we should conclude that he did have it but it's not that there is no evidence well i thought on the issue of knowledge i circumstantial evidence as distinct from no evidence but doesn't right let me ask you this your adversaries made some point thank you submitted no declaration from the arbitrator do you have any response to that yes they deposed him and either did or didn't have the  deposed him not me in the other case and they've submitted that so i don't know what they asked and didn't ask but i do know now describe to me the other case i mean so why would this have come up or not come up in the other in the quote other case that is the matter were the  recall i might well have i mean it was not our intent to to litigate this which i will tell you we have not had any contact with the arbitrator no communications no written note i have no idea what his involvement was or wasn't negotiation none of us would be arguing that that's you know improper to disclose just because he's a lawyer for someone that has a relationship with a party the question is did he have something to do with it and i don't think that changes  by the other side i do not recall but i it's probably likely that we did but i don't remember where in the process it was and where you actually in front of judge matsch or my recollection as i read the transcript that you were this it was the the scummer issue was done by expert the application  around depending how the facts turn em quite aside from what he says about whether he knew or didn't know i am interested in knowing what the what the facts are and obviously i think a remained for discovery would make some sense if you're interested in looking at the facts rather sounds as though you've only become interested look recently oh well that's that's true because at the end of an arbitration that should be the end of it actually i don't know what the facts are i just know what's in the r had any benefit potential or actual none of that was part of the record in the new dispute before and he was operating on i know only whole theory that it didn't matter so the question is whether we think it matt