of new york law we've cited several appellate division cases which stand for the proposition that when an indemnified party like knight go in this case is released from liability without any financial conditions that it's no longer at risk that has the effect of extinguishing the duty of indemnification that most recent of those decisions is the mcdonough case and that outcome flows directly from the very nature  indemnification which is a conditional obligation let me ask you a couple of questions we do not have here a representative of the insured as a right we don't have a recent representative of knight though you know of the of the i first i want to try and understand what the party is regard as being at stake in this or this is this is an appeal from the district court's order enforcing the arbitration contend that that such a a grant of enforcement would permit you to to proceed against i r b to collect the five million dollars and  more of that was the subject of the settlement in the new jersey district court action but but but if i understand correctly if i understand correctly there's a clock stop stop the clock on on on the appellant is as i understand it no court has ordered dismissed by knight co and it was not permitted to participate in the settlement discussions and furthermore the if i understand correctly the court disposition of that new jersey case does not incorporate in any court decision the terms of the settlement is that correct but you are contending that that in order by all records to affirm the district court's order enforcing the arbitration decision between i r b and that that the district court's enforcement order which we might hear affirm that's what's at stake do you agree that if we were to affirm that order and that order permits the insured to proceed against you for the five million dollars that the new jersey case was settled before i think that the order would result in a five million dollars payment by our tonight go watch would then be because it's the party ending in new york proceeding which would then be contractually obliged to hand the money over to c s well but there hasn't been a liability deterred well i think that that's right  i think that that at the conclusion of this or you meant i will ask for further briefing on this additional question of whether the whether the the arbitration award which has been a firmed and now been ordered to be enforced whether such in force meant authorizes and how it authorizes the collection of the five million dollars that was the subject of the settlement of the new jersey action in which i r b did not participate either as a either as a party or as a as somebody participating in the settlement so what you will receive some further briefing on that but you may proceed now with your argument thank you i think you've to some extent put shoes and presented its claim to the southern district of new york that it claimed it had been assigned to and then there would be litigation about the merits of that claim that's not what happened what they purported to do was release night go say you're free to go now let's sit down and decide how much i r b should pay us that's what happened and so that's what's before the court now there could have been another situation  it should be reversed and i find your argument very persuasive because i mean i think your argument is a very lawyer like argument that would make perfect sense in the context of an insurance policy and in many other contexts but this arbitration between two insures as to as to which one which one has to cover what parts of the insureds losses and the arbitrators made a  decision which was largely or which can be described as a substantial justice award arbitration is not required to it here perfectly to legal standards and what the arbitrator's essentially said is that  an ego is not responsive nico did provide insurance and therefore it's not it's not compelled to reimburse the nine million dollar premium that conspiring in conniving with the insured to try to pin something on so that's what the inch what that's what the arbitrator is decided and that's not there's no manifest disregard for the law there's nothing there's no bias you're not she didn't fall down because the arbitrator's created an indemnification obligation that the question now is how do we interpret that given what's happened does that require us to pay the five million dollars and we're saying this was an arbitration under new york law the correct thing to do to interpret it is to look to the controlling new york authority and if you look at the mcdonough case that really is on point as far as what the fact pattern there was you're right that in this case it's  of legal doctrine and they frequently don't and they frequently make substantial justice towards let me address then what the arbitrator is intended here i think it's important to remember that we have three area that was this arbitration and a separately when this policy came up for renewal i r b told c s and we are not going to be sure on this policy and that resulted in litigation in brazil about whether c s and could force i r b to provide the coverage and eventually i would be prevailed in that but by the time it did prevail well and in the intervening years c s n was concerned that there was no retrocession a layer of coverage shares so it circumvented and paid premium directly to the retrocession heirs like nike to get that coverage by the time the brazilian litigation finished the renewal period was over it had been over for years and everyone knew there was no claim in that period and that's when c s and decided it would like to get back the premium it had paid to the retrocession heirs and that's what the arbitrator's were concerned about they wanted to protect annika as you said and so what they did is they created a conditional obligation that said you because nyco that michael had provided cover that night go was paid a premium by c s n provided the service it was paid for and was entitle to keep that premium that's what the arbitrator said and they said you title to that we want to protect you if you ever have to pay that money back then i r b is going to have to protect you because this whole conundrum arose because of this fight in brazil between i r b and c s n that's the indemnification obligation they created that is frankly satisfied by the settlement agreement which releases nyco without condition in fact that what we are arguing is the result under new york law is the most perfect encapsulation of what the arbitrator's one it they said c s and paid the money they paid the premium they got the coverage that's where it should stand i r b was simply there as a backstop to don't think there's any reason for that distinction to matter here it's a minute what specifically you had asked her to do we've asked her to follow mcdonough and to hold that this settlement agreement that night go and see as and w hold that we have no ongoing duty to indemnify her it's been released i know i've gone over my time is that correct here from the insur issue of the standard of review and on the merits is something that judge laval identified which is this is not a contract this is an arbitration award it's an exercise of the arbitrators equitable powers not based on any specific due york law just based on its inherent equitable powers to remedy what it identified as inequitable conduct by i r b it granted effectively a positive injunction to require i r b to hold  go for amounts which nyco had to pay out of its pocket which is language at page eighteen which is language in insurance policies and was the language an insurance policy in mcdonough and all the other cases it's what exactly though you were a party that you got what you paid for and what you were entitled to know you out of the the arbitration determined as between night go and c and i are be as to which policy year or reinsurance policy period the c s a underlying loss fell into there was a settlement between c s and its insurance companies and i r b who was the reinsure for those prior periods one hundred sixty seven million dollars for a massive conveyor belt loss the dispute between ny go and see it and i are be was whether that loss should fall within what was called the original period where n not on the risk or in the renewal period were nyco was on the risk c s n was going to get the money regardless the hundred sixty seven million that was part of the settlement that's with that arbitration related to it in connection with one hundred  sixty seven million dollars settlement i r b separately represented to c s n that it had a legitimate claim that's the exact words that are be represented to recover this nine million dollar premium for what was called the renewal period because i r b never agreed to be a reinsure and so therefore nyco and the other retrocession heirs could never have gotten to have been on the wris because it breaks the chain of coverage you know it's a risk transfer and without this layer which would be i r b since it had never agreed to participate and the brazilian court said it didn't have to participate since i or b was gone there was no one to transfer risk tonight go so not go got nine million dollars and would never have been on risk this was see a sens argument c s and never got to present that argument to the arbitration panel because it was in the party c s n didn't it never presented this argument  judge buchwald when that when the arbitration award was originally confirmed because it was in the party and if you look at the transcripts judge buchwald was surprised to hear that there was this brazilian arbitration between c s n and i are be there was no gap in reinsurance because it is not right there was no there was gap in ranch kirtley insurance coverage for the renewal period yes the arbitrator's determined and right or wrong the arbitrator's determined that the nyco provided the risk for which it was paid a premium provided coverage for the risk for which it was paid a premium that that is correct as between the parties to the was because even though knight go had this arbitration award that said i or b was going to be financially responsible for four c s and claim as an icon says it's papers there was the risk both in the u s and in brazil that nikon was going to be held liable for that amount so it had an incentive to compromise the nine million dollars claim was nine million plus six million in interest for five million which judge buchwald held to be reasonable now that the  argument that i or b presents is that as a matter of technical insurance law in new york in new york state the way we structured the settlement is an enforceable that fails because the said as you said is not a contract it's it's an in it's an echo a piece of equitable relief which was embodied then in a judgment and the judge buchwald's exercise of discretion and enforcing her  that that that you should have gotten back five million dollars of the nine million that you paid as a premium to not go there's no judicial determination other than five and a half million it could have said anything didn't matter tonight though because it wasn't settling for anything it was responsible to pay so what i don't understand is is is where you get the idea where you get the proposition that the enforcement of the arbitration award which which said that essentially that i r b should pay what night go is obligated to return where does where has there been a determination of what knight go should be obligated to return which must be borne by by c s m response must be borne by i r b respectfully or on of the arbitration or does not say return of premium it paid there's no requirement there that there be a judicial determination that michael was required to pay it simply it in titles nyco it gives full protection to night go and to allow night go to settle with c on reasonable terms and judge buchwald determine if the settlement was objected levy reasonable now you say nigel could have settled for one hundred million or but that would not be objectively reasonable and judge buchwald determined here that the settlement was reasonable now a judgment that says five million dollars is what they're allowed to climb a judge buchwald judge buchwald's judgment i don't see that in the judge or judge judge buchwald says required a five million dollars yes judge buchwald entered a judgment saying that i r b was required to pay five million dollars tonight i'm sorry what pages that  judgment grants knight goes motion to enforce the arbitration award and to order i r b to pay five million dollars and so at a two to seven it says it doesn't mention any number or it says it says c s n's motion to enforce is granted your honor at page eight of the of the  if you look at page two twenty eight you're appealing from the memorandum and  had obtained a judgment against nike for some amount of money five million dollars or whatever for the return of the premium or if c s n had b participated because it's liability is what is instead a or if it obtained a settlement with i r b participating and reserving the right to two to prove to the court that there should be no reimbursement whatsoever because c s and got what it paid the premium for i would then have no problem with the proposition that i  should be responsible for that judgment and i would not be persuaded by them i r b's argument that it can't be libel because it's an indemnity tauren if there's no liability that can be no indemnification to  y and furthermore if c s n were to obtain a judgment still in the future in brazil or elsewhere that conformed to the standards that i'm talking about i would have no problem with c s and being having an enforceable right to collect that amount but essentially what we've got is a circumstance where nyco made an agreement with the plaintiffs to make i r b responsible for a certain amount of money without nyco being on the hook and without i r b having any chance to opportunity to participate in that and i don't him and even if one says after the fact well i think that's reasonable i that night go should be compelled to to return five million dollars i just don't see where there's any any appropriateness that the concept of enforce the arbitration award in mediation with and nyco for ten months in which there were two all day sessions and numerous calls and shuttle diplomacy by judge hochberg that's all very well but not correct that they asked to participate in the settlement discussions and were told and were excluded they participated in settlement discussions for ten months did not put any money on the table because they were continuing to contest the validity of the arbitration award and it was only on the last day when when  go and see as and without having no ability to have i r b participate in a productive way in settlement discussions c s and nyco entered into a separate settlement and after the fact i r b said well can we can we participate in arbitration award had made it clear that whatever was the resolution of this dispute it was going to be as long as it involved payments to to to see a stand it was going to come out of my rbs pocket exactly right so what happens when you have a settlement of a dispute and you can't reach settlement because one of the parties is being obstinate as refusing to talk settlement what happens is that what do you do then well c s sends rights were visa v ni n did not have a direct right against higher be so c s and did the best that it could it entered into a settlement with nyco and do the best you could you didn't even get a you didn't even get a new jersey judgment that that it the that embodied that supplement coming out of i r b's pocket but this was sort of the it was an easy settlement because there are two parties certainly with someone else's money only yes your honor two points yes only because i or b was obstinate your judgment in new jersey get them in the queue had them in the case you couldn't get them to agree to a settlement so get them to get them to be a party to a judgment if you had done that there'd be no problem here whatsoever indemnity is assigned to the original plaintiffs so here c s a that would be enforceable i would be agrees with that pinto said even if you don't structure it in exactly that way if what you've done is the functional equivalent here and i ask you understood to look at that case very carefully because even if you're going to get the opportunity to brief all this to us because these issues are simply not argued at all in the papers that have been submitted to us now so we w to consider this and let's set a schedule for for a briefing and why don't we have a c s m give us your brief on why why the gives you an entitlement to collect what night go decided i ought to be should pay in the new jersey action so how about in two weeks from today do you can have fifteen pages and and i r b will respond and how long after that ten days after that similar and you can file a reply to five pages five days later judgement the notice of appeal does not reference either a judgment or final judgment so do we have the jurisdiction and then when you are so so we're going to get those two yes go ahead but could i just add just to clarify the briefing schedule so i or b will file up a letter and two weeks we will respond and then you followed well i get on the on the issue what seems to me to be the more significant issue is the one in which it looks in which as i assess it it seems to me that c s and has the uphill battle because i am mystified as to where you find  i don't have any problem with enforcing the order i don't have a personally have a problem with enforcing the order as against the reasons that i r b advance and it's briefing i am mystified as  as to how the settlement of the new jersey case without our i r b without either a judgment of the new jersey court or the participation of the agreement of i r b to that settlement constitutes an amount that i  you can you can persuade us i mean the c s and i see you have an interest in their having appellate jurisdiction you want us to affirm yes order certainly yes so you have as much of an interest as the other side in arguing that there is appellate jurisdiction you can both tell us about appellate jurisdiction in your brief were spent in that scene in the same way in the same letter here all right thank you telling that what he just described is there is this conflict and there's a fight and they were finally able to resolve it when they kicked out of the room the one party who had money on the table that's when they were able to to finally resolve the case because as you said nyco they could've picked any release a party and say now let's figure out how much your indemnity should pay us you can imagine if that was in forcible all kinds of abuses where they would not if there is no reason that the indemnified party wouldn't trade away more of the indemnity is money if you could get anything of value from the third party and that's exactly what happened here you know i have another question which is what is it clear in the in the proceedings before judge buchwald in the southern district in the proceedings that are being appealed from award that c s and was arguing for the ability to collect five million dollars from my or b and if that was clear if if c s a was making clear that that was what it regarded as its in title under an order of enforcement did did i r b object for the reason is that i am now asking you to brief did i r b said no even if they're entitled to enforce that order they're not entitled to enforce the settlement that was obtained without our without our part to swear that our agreement and without a court judgment in which we were a participant were those points argued to judge judge buchwald because if they if they weren't then it seems to me an argument that c s n can be making to us is that that was clearly at stake before judge buchwald and i r b did not make the arguments that that that i have questions already did make those arguments that you did so well i mean i don't know whether c s n agrees with that or not but if c s and thinks they didn't make those arguments you one of your arguments can perhaps be in your letter that that i r b waived or or in any event forfeited the opportunity to rely on those arguments i don't know i find a lot of this quite mysterious because it doesn't seem to me that judge buchwald's after the fact ruling that night goes agreement that i r b should pay five million dollars that that's reasonable is the same thing as an obligation on the part of and i go that must be that must