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### IN THE SUPREME COURT OF THE STATE OF HAWAI # I
---oOo---

In the Matter of the Arbitration

of NORDIC PCL CONSTRUCTION, INC., fka NORDIC CONSTRUCTION, LTD., Respondent/Claimant/Counterclaim Respondent-Appellant,

vs. LPIHGC, LLC, Petitioner/Respondent/Counterclaimant-Appellee.

SCWC-11-0000350
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-11-0000350; S.P. NO. 10-1-0346)

JULY 23, 2015 NAKAYAMA, ACTING C.J., McKENNA, AND POLLACK, JJ., CIRCUIT JUDGE ALM, IN PLACE OF RECKTENWALD, C.J., RECUSED, AND CIRCUIT JUDGE SAKAMOTO, IN PLACE OF WILSON, J., RECUSED

OPINION OF THE COURT BY McKENNA, J.
I. Introduction Petitioner/Counterclaimant-Appellee LPIHGC, LLC (“LPIHGC”) seeks review of the April 4, 2014 Judgment on Appeal of the Intermediate Court of Appeals (“ICA”), entered pursuant to its February 14, 2014 Memorandum Opinion, which vacated and remanded the March 24, 2011 Final Judgment (“judgment”) of the Circuit Electronically Filed Supreme Court SCWC-11-0000350 23-JUL-2015 10:23 AM*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### Court of the First Circuit (“circuit court”) in favor of LPIHGC and against Respondent/Claimant-Appellee Nordic PCL Construction, Inc. fka Nordic Construction Ltd. (“Nordic”). The circuit court’s judgment was based on its grant of LPIHGC’s motion to confirm, and denial of Nordic’s motion to vacate, the Partial Final Award of Arbitrator dated October 15, 2010 (“the Partial Award”) and the Final Award of Arbitrator dated December 15, 2010 (“the Final Award”) (the Partial Award and the Final Award are sometimes collectively referred to as “the Arbitration Award”). The Arbitration Award was issued by the arbitrator selected by the parties, retired circuit court judge Patrick K.S.L. Yim (“the Arbitrator”). On appeal, the ICA ruled that the Arbitrator’s failure to disclose various relationships with the law firms of LPIHGC’s attorneys established a reasonable impression of partiality requiring vacatur of the Arbitration Award. The “evident partiality” bases for vacatur alleged by Nordic present various questions of disputed material facts. The circuit court denied Nordic’s motion without orally stating its reasoning on the record or entering any findings of fact and conclusions of law. As this court ruled in Clawson v. Habilitat, Inc., 71 Haw. 76, 783 P.2d 1230 (1989), “whenever material facts are in dispute in determining whether an arbitration award should

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### be vacated, the circuit court should conduct an evidentiary hearing and render findings of fact and conclusions of law in support of granting or denying [a] motion to vacate [an] arbitration award.” 71 Haw. at 79, 783 P.2d at 1232. In this case, although neither party requested an evidentiary hearing to address disputed issues of material fact, because the circuit court did not explain the basis of its rulings on the record or enter findings of fact or conclusions of law, this court is unable determine whether the circuit court erred in denying Nordic’s motion to vacate. Specifically, with respect to the “evident partiality” bases of Nordic’s motion, it is unclear whether the circuit court found no violation of the Arbitrator’s duties of reasonable inquiry, disclosure, or continuing duty to disclose; found that despite a violation, the objection was not timely or had been waived; or found that despite a showing of evident partiality and timely objection without waiver, it exercised its discretion not to vacate the award. Thus, the factual and/or legal bases upon which the circuit court denied the motion to vacate are unascertainable. Because we are unable to determine the grounds on which the circuit court based its decision, we are unable to appropriately

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### review its ruling. 1 

### Accordingly, we vacate the ICA’s April 4, 2014 Judgment on Appeal and remand this case to the circuit court for an evidentiary hearing and entry of findings of fact and conclusions of law on Nordic’s motion to vacate. 2 

### II. Background A. Facts This case arises from a dispute over the adequacy of concrete work Nordic performed on a Maui condominium construction project as a subcontractor to LPIHGC. The owner of the project,

3 

### Maui Beach Resort Limited Partnership (“Owner”), incorporated 4 

### LPIHGC to be its general contractor and executed a prime contract between them. Thereafter, LPIHGC and Nordic executed a written subcontract, which provided for a contract price of $39,2689,396 (as amended) to perform the concrete work for the project. The

1 At or al ar gumen t, co unsel for both parti es en coura ged t his c ourt to ru le wi thout a re mand. Eve n if it wa s app ropri ate f or th is co urt t o ren der findi ngs o f fac t, wh ich i t is not, the r ecordpres ents too m any u naddr essed dispu ted m ateri al is sues of fa ct, a s dis cusse d bel ow. 2 Neith er th e cir cuit court nor the I CA ad dress ed wh etherther e are dispu ted m ateri al is sues of fa ct re gardi ng th e oth er ba ses o n whi ch No rdic movedto v acate the Arbit ratio n Awa rd, w hich are b riefl y dis cusse d in this opini on. If th ere a re, t he ci rcuit cour t mus t als o add ress those issu es. 3 The p rojec t is the H onua Kai S outh Encla ve inL â hain â , Mau i.
4 The O wner “cons ist[e d] ofa co nsort ium o f dif feren t ent ities inclu ding JP Mo rgan, Intr awest Plac emaki ng an d Led cor P roper ties, Inc. , a Canad ian r eal e state subs idiar y of the L edcorgrou p of compa nies. ” Th e Own er also hiredLedc or Co nstru ctionInc. (“Le dcor” ) to be th e pr oject cons truct ion manag er.
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### parties subsequently disputed whether Nordic’s concrete work was adequately flat and level, and LPIHGC made only partial payment to Nordic under the subcontract. The subcontract contained a binding arbitration clause, which provided for the arbitration to be governed by Hawai # i Revised Statutes (“HRS”) chapter 658A (Supp. 2010) and conducted by Dispute Prevention & Resolution, Inc. (“DPR”). In addition, it provided for the arbitration to be conducted “by a single arbitrator, who shall either be a former judge with substantial experience in residential real estate litigation matters or a licensed attorney with at least ten (10) years experience in residential real estate transactions and/or litigation involving residential real estate.” In the arbitration hearings, Nordic was represented by attorneys Anna H. Oshiro (“Oshiro”), Mark M. Murakami, and Noelle B. Catalan of Damon Key Leong Kupchak Hastert (“Damon Key”). Although he did not appear at the hearings, the name of attorney Kenneth R. Kupchak (“Kupchak”) of Damon Key also began appearing on Damon Key’s correspondence and pleadings after the issuance of the Arbitrator’s October 15, 2010 Partial Award. LPIHGC was represented by Terence J. O’Toole “O’Toole”) and Judith Ann Pavey (“Pavey”) of Starn O’Toole Marcus & Fisher (“Starn O’Toole”) and John P. Manaut (“Manaut”) of Carlsmith Ball LLP (“Carlsmith

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### Ball”).
B. Arbitration 1. Initial Disclosures and Arbitration Proceeding After his selection by the parties, on March 17, 2009, the Arbitrator, through DPR, provided the following disclosures by email: [The Arbit rator ] is willi ng an d abl e to serve as A rbitr ator

in th is ma tter and t hanks the parti es fo r his sele ction
. [The Arbit rator ] pro vides the follo wing discl osure s foryour revie w: 1. While serv ing o n the benc h, co unsel and membe rs of theirlaw firms appe ared befor e me; 2. Since reti remen t, I have serve d as a neu tral for couns el an d members of th eir l aw fi rms; 3. To th e bes t of my kn owled ge, I do n ot kn ow an yone invol ved w ith L PIHGC , LLC ; 4. I ser ved a s a n eutra l in a mat ter w here Nordi c was a party . Th at ma tter was c onclu ded a t lea st fi ve ye ars ago; 5. I wil l pro vide addit ional disc losur es as nece ssary throu ghout this proc eedin g; 6. These disc losur e wil l not prev ent m e fro m ser ving as a neutr al an d unb iasedArbi trato r. Any c ommen ts re gardi ng th is di sclos ure s houldbe f iled in writi ng wi th DP R by March20, 2009. 

### On October 7, 2009, the Arbitrator, through DPR, provided an additional disclosure pertaining to the inclusion of an individual on the expert witness lists submitted by the parties who had appeared before the Arbitrator on matters completed prior to the arbitration proceeding. The parties did not respond to 5

5 The O ctobe r 7, 2009 discl osure prov ided: [The Arbit rator ] has revi ewed the E xpert Witn ess L ists submi tted by th e par ties and p rovid es th e fol lowin g suppl ement al di sclos ure: (cont inued ...)
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### the Arbitrator regarding either disclosure. Arbitration hearings were held intermittently on thirty-one days from January 25, 2010 to April 29, 2010. In general, the parties contested which of two concrete flatness and levelness standards applied to Nordic’s work and whether Nordic had proven

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### its satisfaction of the applicable standard by providing quantitatively sufficient F-meter data to establish its statistical validity. 7 

### On October 15, 2010, the Arbitrator issued the Partial Award, ruling in favor of LPIHGC for $9,804,108.27.

2. Post-Award Demand Letters and Supplemental Disclosures Two weeks after the Partial Award was issued, Damon Key sent a letter to DPR dated October 29, 2010 requesting

updat ed di sclos ure d etail s . . . in cludi ng, b ut no t lim ited to, a ny an d all arbi trati on ormedi ationmatt ers i nvolv ing

5(... conti nued) 1. Richa rd Ko zuma has a ppear ed be fore me inprio r matte rs. T o the best of m y kno wledg e, I do no t hav e any m atter s wit h himat t his t ime. 2. This discl osure will not preve nt me fromserv ing a s a neutr al an d unb iasedArbi trato r. Any c ommen ts re gardi ng th is di sclos ure s houldbe f iled in writi ng wi th DP R by Octob er 12 , 200 9.
6 Nordi c arg ued t hat t he ap plica ble s tanda rd wa s flo or fl atnes s (FF ) 18 an d flo or le velne ss (F L) 15 , whi le LP IHGC argue d tha t it was F F 30 and F L 20.
7 The F -Mete r is a flo or pr ofili ng in strum ent t hat i s man ually pulle d acr oss t he fl oor t o get an F -Numb er me asure ment on th e fin ishedfloo r flatn ess a nd le velne ss. F-Met er: R ollin g Flo or Pr ofile r , A LLEN FACE , http: //www .alle nface .com/ F-Met er.ht ml (l ast v isite d Apr il 27 , 201 5).

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attor neys from the l aw fi rms o f eit her [ Carls mith Ball] or [Star n O’T oole]
. . . whi ch [t he Ar bitra tor] has p resid ed over since Janu ary 1 , 200 9 . . . as well as a ny ma tter for which[the Arbi trato r] is curr entlybein g con sider ed orhas been conta cted to se rve a s a p otent ial a rbitr ator or media tor. 

### Four days later, Oshiro and Kupchak of Damon Key sent another letter to DPR, demanding the Arbitrator’s immediate disqualification on the basis of Carlsmith Ball’s alleged representation of the Arbitrator and his nondisclosure of that representation. The letter asserted that:

It ha s jus t com e to our a ttent ion t hat [ the A rbitr ator] has had a n und isclo sed, long stand ing p rofes siona l rel ation ship with oppos ing c ounse l . .
. . We h ave r easonto u nders tand that [the Arbit rator ] was repr esent ed byCarl smithBall , inclu ding an at torne y wor king on th is ca se, o n at least sevensepa rate occas ions over the l ast t en ye ars. One of these case s was a ma tter that was o ngoin g . . . du ring the term of th e par ties’ rece nt ar bitra tion proce eding s. 

### This allegation related to Carlsmith Ball’s representation of the QLT on unrelated real estate and lease matters on the island of Hawai # i. The Arbitrator has served as one of three trustees of the QLT since 2002, and along with the other two trustees, the Arbitrator’s name appears as trustee on lawsuits involving the QLT. On November 4, 2010, Manaut of Carlsmith Ball sent a letter to DPR that characterized Nordic’s request for updated disclosure details as “an improper fishing expedition[,]” and asserted that Nordic “never once raised an issue or questioned anything about the sufficiency of any disclosures” prior to the issuance of the Partial Award. Damon Key sent a responsive letter to DPR on the

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### same day, stating neither the Arbitrator nor Manaut had disclosed seven cases in which Carlsmith Ball allegedly represented the Arbitrator, and demanding the Arbitrator’s immediate disqualification. On November 9, 2010, Pavey of Starn O’Toole sent a letter to DPR challenging Nordic counsel’s demand for disqualification. On the same day, Pavey also sent a letter to Oshiro requesting information on the timing and circumstances surrounding discovery of the facts underlying Nordic’s claim for disqualification. On November 11, 2010, the Arbitrator provided a post-award supplemental disclosure that detailed his professional and volunteer activities:

As pr eviou sly d isclo sed, I hav e ser ved a s a m ediat or an d an arbit ratorin m atter s in whichpart ies t herei n wer e repre sente d by the f irms appea ring in th is ar bitra tion. Thoug h I c annot reca ll an y mat ter i nvolv ing [ Owner ] or LPIHG C, LL C, I do re call servi ng as an a rbitr ator in a matte r in whichI de termi ned t hat N ordic was the p revai ling party . Furth er, a t the time whenI wa s inf ormedthat I wa s sel ected as anarbi trato r in this matte r, I was s ervin g as a neu tral in ca ses i n whi ch th e Dam on Ke y fir m, Ca rlsmi th Ba ll, a nd the S tarn O’Too le fi rm re prese nted certa in pa rties ther ein. Durin g the yearand a hal f cou rse o f thi s arb itrat ion, I serve d in an ad ditio nal m atterin w hich Lane Hornf eck o f the StarnO’To ole f irm r epres enteda pa rty. Somet ime d uringthis perio d, Ro bert Trian tos o f Car lsmit h Bal l ent ered an appea rance on b ehalfof a n add ition al pa rty i n an arbit ratio n whi ch co mmenc ed in2008 . I a lso, durin g thi s perio d, se rved as a media tor i n a m atterin w hich Carls mith Ball was a part y. As on e of the t hree Trust ees f or th e [QL T], I here by discl ose t hat t he fo llowi ng ar e law yers and l aw fi rms retai ned b y the Trus t sin ce 20 02, w hen I comm encedto s erve as a Trust ee. T he li st is as f ollow s: As hford& Wr iston , Cades Schu tte F lemin g & W right , Cas e Big elow & Lombardi , Carls mith Ball, DeanNaga mine, Glen n Kimura, John J. Ba ker,

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. As on e of the t hree trust ees f or th e [A] Trus ts, I repr esent that the [ A] Tr usts have retai ned l egal servi ces f rom t he firm of [ B], a nd at torne ys [D ], an d [E]
. I als o dis close that I be lieve Mr. Micha el Wa lsh, Vice Presi dent of th e [QL T’s] Endowment Group , is []Kup chak’ s broth er-in -law.
As a membe r of [F]’s Boar d of [G], I hav e bee n inf ormedand been permi tted to di sclos e tha t ourinst ituti on, a t var ious times in t he pa st, h as re taine d the lega l ser vices of [ I], [J], and [ K].
As a membe r of the B oard of [L ] and[M],
. . ., I have recen tly b een i nform ed th at [N ] hav e bee n ref erredto t he follo wing attor neys for s ervic es: [ O], [ P], [ Q], [ R], a nd [S]. I hav e bee n inf ormedby m anage ment of th e [QL T] th at in recen t mat ters, memb ers o f Car lsmit h Bal l andthe Bays Deave r fir m hav e rep resen ted p artie s who have oppo sed t he inter ests of th e [QL T].

. . . . 

### On November 15, 2010, Damon Key sent a letter to DPR to request further clarification on the matters listed in the supplemental disclosure. On November 18, 2010, Pavey, O’Toole, and Manaut sent a letter to DPR opposing Nordic’s disqualification demand and objecting to a stay of the arbitration, alleging that the “demand for disqualification is insufficient on its face because [Nordic] failed to even allege, let alone prove, evident partiality on the

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### part of [the Arbitrator]” and the Arbitrator had no conflict based upon Carlsmith Ball’s representation of the QLT. Appended to the letter were declarations of Manaut and Edmund W.K. Haitsuka, the Carlsmith Ball attorney handling the Kona land matters for the QLT. Haitsuka declared that he had not had any ex parte communications with the Arbitrator about any matter prior to, during, or after the arbitration. He also stated that Carlsmith Ball had not represented the Arbitrator in his individual capacity, and that he had never communicated with the Arbitrator on any trustee issues or anything related to the arbitration, and that he had only spoken to the QLT’s executive officers and managers. Manaut declared that he had never had any communication with the Arbitrator concerning the QLT, ex parte or otherwise, and that he was not aware that the Arbitrator was a QLT trustee who Carlsmith Ball represented on land matters in Kona in his representative capacity. By email dated November 18, 2010, DPR further disclosed that the Arbitrator:

serve d as a Med iatorin a case wher e the Damo n Keyfirm repre sente d a p arty. Coun sel f or Da mon K ey wa s Mar k Murak ami, Esq. Couns el fo r the part ies mutual ly se lecte d [the Arbit rator ] in 2008, the media tion was h eld i n Febru ary, 2009. DPR charg ed it s sta ndardhour ly ra te of $350/ hour. This matt er wa s inc ludedin t he [i nitia l] discl osure sinc e the fina l inv oice was i ssuedto c ounse l on March17,2 009.

. . . ser ved a s an Arbit ratorin a case wher e Joh n Sop uch,

11*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** Esq. of th e Sta rn O’ Toole firmrepr esent ed a party . Cou nsel for t he pa rties mutu ally selec ted [ the A rbitr ator] in 2 008. The Award was i ssuedin F ebrua ry, 2 009, and t he fi nal invoi ce wa s iss ued o n Mar ch 13 , 200 9. DP R cha rged its stand ard h ourlyrate of $ 350/h our.

. . . ser ved a s a M ediat or ina ma tter where Lane Horn feck of th e Sta rn O’ Toole firmrepr esent ed a party . Cou nsel for the p artie s mut uallysele cted [the Arbit rator ] in June 2009, and t he ma tter close d in Augus t 200 9. DP R cha rged its stand ard h ourlyrate of $ 350/h our.

. . . ser ved a s a M ediat or ina ma tter where Carl smithBall was a part y. Co unsel for the p artie s mut uallysele cted [the Arbit rator ] as Media tor i n Jan uary 2009. The initi al media tion sessi on wa s hel d on March6, 2 009, and t he ma tter close d in Octob er, 2 009. DPR c harge d its stan dard hourl y rate of $3 50/ho ur.

. . . is servi ng as an A rbitr ator in a case where Robe rt Trian tos, Esq. at Ca rlsmi th [B all] repre sente d a p arty for a porti on ofthe arbit ratio n pro ceedi ng. T he ca se wa s ope ned with DPR i n 200 8 andcoun sel p artic ipati ng at that time mutua lly s elect ed [t he Ar bitra tor] as Ar bitra tor. In Ju ly 2009, Mr. Trian tos’ clien t was brou ght i nto t he ca se vi a Court Orde r, Mr . Tri antos ’ cli ent s ettle d out of t he ca se in July, 2010 ([th e Arb itrat or] w as no t inv olvedin t he settl ement disc ussio ns), DPR i s cha rgingits stand ard h ourly rate of $3 50/ho ur. 

### On December 1, 2010, DPR declined to grant Nordic’s request to disqualify the Arbitrator on the grounds it no longer had jurisdiction once the substantive claims were resolved. On the same day, the QLT sent a letter to DPR providing the following information regarding Carlsmith Ball’s representation of the QLT since March 2009:

1. Th at Ca rlsmi th [B all] has a nd co ntinu es to repre sent the T rust from time to ti me onlandmana gemen t and comme rcial leas eholdcoll ectio n andsumm ary p osses sion matte rs, i nclud ing c ommer cial lease holds in t he Ko na Indus trial Subd ivisi on, K uakin i Cen ter, and t he Ko na Co mmons proje cts o f the Trus t; 2. Th at Ca rlsmi th [B all] does not r epres ent a ny si ngle membe r of the B oard; 3. Th at th e sel ectio n andrete ntionof l aw fi rms, inclu ding Carls mith[ Ball ], is cust omari ly do ne at the

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opera tion level s wit hin t he Tr ust a nd no t by the B oard; and 4. Th at da y-to- day c ommun icati ons b etwee n lawfirm s, revie w of legal work , andrevi ew an d payment of la w fir m invoi ces a re ha ndledat t he op erati onal level s of the T rust and n ot bythe Board
. 

### Thereafter, on December 15, 2010, the Arbitrator issued the Final Award, which awarded LPIHGC attorneys’ fees of $1,317,804.33 and costs of $121,997.94 for a total of $1,439,802.27.
C. Circuit Court Proceedings 1. The Motions to Confirm and to Vacate the Arbitration Award

a. LPIHGC’s Motion to Confirm Award On November 22, 2010, LPIHGC filed a motion to confirm the Partial Award (“motion to confirm”), which was supplemented on December 16, 2010 to include the Final Award. In its motion to confirm and reply to Nordic’s opposition to said motion, LPIHGC argued that Nordic failed to allege an undisclosed relationship because there was none, and failed to meet its burden of proving evident partiality. In addition, LPIHGC alleged that Nordic waived or is estopped from overturning the Arbitration Award because it “knew or should have known of the potential partiality of an arbitrator but failed to raise an objection . . . prior to the arbitration decision”, to the extent that (1) Carlsmith Ball’s representation of the QLT as well as the Arbitrator’s status as trustee were public knowledge; and (2) Nordic’s counsel

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### had actual knowledge of the Arbitrator’s trusteeship and chose not to further inquire after the initial, general disclosure. Lastly, LPIHGC contended that the undisputed evidence against Nordic was overwhelming as the specifications for Nordic’s work never changed, and various follow-on tradesmen, independent inspectors, and the project structural engineer and architect testified at the arbitration that Nordic’s work was substandard.

b. Nordic’s Motion to Vacate Award On December 21, 2010 Nordic filed a motion to vacate award of arbitrator (“motion to vacate”) on the grounds that (1) the Arbitrator acted with evident partiality by failing to disclose his relationship with Carlsmith Ball and of his receipt of payment for neutral services provided to Carlsmith Ball and Starn O’Toole during the pendency of the arbitration; (2) the award was “procured by corruption, fraud and other undue means” and violates “public policy against the destruction and suppression of evidence”; and (3) the award exceeds the arbitrator’s 8

8 As to the claim s of fraudand spoli ationof e viden ce, N ordic argue d tha t the awar d war rante d vac atur underHRS § 658 A-23( a)(1) (Sup p. 20 10) becau se it was “proc ured by li es ab out c rucia l evi dence [LPI HGC] suppr essedor destr oyed. ” No rdic alleg ed th at (1 ) the Arbi trato r ref used to he ar No rdic’ s spoli ationmoti on re gardi ng LP IHGC’ s los s of F-met er da ta an d con cealm ent o f an ex pert repor t pro curedearl y in the p rojec t tha t ind icate d tha t Nor dic’s data may b e qua litat ivelydefi cient ; (2) the Arbit ratorrefu sed t o rec ogniz e Nordi c’s F -mete r tes t res ults, whic h he said were basedon i nsuff icien t dat a, becau se he beli eved LPIHG C wit nesse s who test ifiedthat LPIH GC “l ost a ll of its F -data in a comp uter crash , so that the r emedypres cribe d . . . wa s no longe r pos sible [;]” and ( 3) th e awa rd om ittedrefe rence s to a tap ed re cordi ng that alleg edly conta ined a con versa tion recor ded a t an LPIHG C/Own ershi p meeti ng ofLPIH GC “r epres entat ives strat egizi ng ab out h ow to keepsens itive (cont inued ...)

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### authority. 9 

### With regard to alleged nondisclosures that form the basis of this appeal, Nordic argued the Arbitrator did not fulfill his initial obligation under HRS § 658A-12 (Supp. 2010) to make a reasonable inquiry and disclose to all parties any facts that a reasonable person would consider likely to affect the Arbitrator’s impartiality, including (1) the long-standing and substantial attorney-client relationship between him, as a QLT trustee, and Carlsmith Ball that “included representation in at least seven, undisclosed lawsuits, two of which were actively being litigated during the pendency of this case[,]” and (2) three instances during the pendency of the arbitration in which he provided neutral services to other attorneys in Carlsmith Ball and Starn O’Toole, consisting of work (a) as a mediator for

(...c ontin ued) docum ents out o f Nor dic’s hand s by erasi ng ta pes, shred ding meeti ng mi nutes , or co pyingcoun sel o n eve ry se nsiti ve do cumen t” th at it want ed wi thhel d, an d foundno s polia tion of th e dat a bec ause “ther e cou ld be no s polia tion unles s [Nord ic] p rovedthe loss was i ntent ional . Th erefo re, N ordic argu ed, t he Arbit rator“fai led t o app ly Ha waii’ s lawagai nst s polia tion of do cumen ts[]” to LPIHG C wit nesse s’ al legedperj ury r egard ing t he lo ss ofcomp uter data, whic h was “ criti cal t o [pr ove] Nordi c’s c oncre te co mplia nce – the main issue in t he case. ” 9 Nordi c arg ued t hat t he Ar bitra tor e xceed ed hi s pow ers b y awa rding damag es to a no n-par ty to the arbit ratio n to the e xtent that the awardgran ts damag es to LPIH GC/Ow ner e ven t houghther e wer e LPI HGC a nd No rdic were the o nly two p artie s to the a rbitr ation , andthe Owneris n ot en title d to any d amage s in th e arb itrat ion p rocee ding as it cont racte d onl y wit h LPI HGC, not N ordic
. The A rbitr ator foundthat the subco ntrac t inc orpor ated the p rime contr act betwe en th e Own er an d LPI HGC a s par t of Nordi c’s s ubcon tract docu ments . Nordi c als o arg ued t hat t he Ar bitra tor e rred in aw ardin g exp ert f ees a nd ot her damag es th at a trial cour t cou ld no t awa rd, t hereb y dis regar ding estab lishe d law o n payment for e xpert test imony , andwarr antin g vac atur underHRS § 658 A23(a) (4).
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### Carlsmith; (b) as a mediator in a case involving Starn O’Toole; and (c) as an arbitrator in a matter in which Carlsmith Ball entered an appearance and represented a party. Nordic further argued that the “existence of this special relationship between [the Arbitrator] and [LPIHGC’s] counsel creates an irrefutable presumption of bias and partiality.” The only declaration under oath submitted regarding the alleged nondisclosure was that of Oshiro. Oshiro declared that an attached “table of cases filed or defended by the Carlsmith law firm on behalf of the Arbitrator in his capacity as trustee of the [QLT]” “was discovered by [Nordic] in late October, 2010, after which additional inquiry and requests for disqualification were issued.” She also declared that “[t]he supplemental information regarding the Arbitrator’s ongoing paid services as a neutral for opposing counsel, was a complete surprise - as [Nordic]’s firm had refrained from such solicitation with the expectation that any such solicitation and service would and must be disclosed in the arbitration proceeding, and as the Arbitrator’s prior disclosure of neutral services for counsel was plainly couched in the past tense.” On January 14, 2011, LPIHGC filed its memorandum in opposition to the motion to vacate. With regard to the evident partiality claim, LPIHGC argued that “Nordic is asking this Court

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### to make new law by creating a presumption of evident partiality based solely on an alleged nondisclosure, without any specific facts of improper motives or conduct.” LPIHGC also argued that 1 0 

### Nordic mischaracterizes the relationship between the Arbitrator and Carlsmith Ball by alleging that “the Arbitrator (as trustee) and Carlsmith (as outside counsel) each owe duties to the QLT, therefore the Arbitrator and Carlsmith must owe duties to each other.” (emphasis omitted). Moreover, LPIHGC argued that the Arbitrator’s initial disclosure (“Since retirement, I have served as a neutral . . . .”) is in present-perfect tense and “denotes that [the Arbitrator’s] work as a neutral began in the past, continued thereafter, and may still be continuing.” Thus, LPIHGC argued that Nordic is the only party with whom the Arbitrator had any prior relationship and highlighted that Nordic failed to disclose that (1) the Arbitrator provided third-party neutral services in a matter involving Damon Key at the time the arbitration commenced, (2) Kupchak and the Arbitrator serve onDPR’s arbitrators’ panel together, and (3) Kupchak’s brother-in10 LPIHG C andNord ic ap pear to di sagre e as to wh etherthis is a n actua l bia s or evide nt pa rtial ity c ase a nd th e bur den o f pro of re quire d. Citin g Kayv. K aiserFoun datio n Hea lth P lan, Inc., 119 Hawai # i 219 , 194 P.3d 1181 (App. 2008 ), No rdic argue d tha t the nond isclo sure reaso nablycrea tes a n impre ssionof b ias w arran ting vacat ur, w hile LPIHG C arg ues t hat N ordic “mus t estab lish speci fic f acts that indic ate i mprop er mo tives on t he pa rt ofthe arbit rator .” ( quoti ng Wa shbur n v. McMan us, 8 95 F. Supp . 392 , 396 (D. Conn. 1994) (int ernal quot ationmark s omi tted) , cit ed inDaii chi H awaii Real Esta te Corp. v. L ichte r, 10 3 Haw ai # i 325 , 342 , 82 P.3d 411, 428 ( 2003) ). T he appli cable stan dards are discu ssed below
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### law is a Vice President of the QLT and is one of two executives in charge of the QLT’s real estate litigation in which Haitsuka of Carlsmith Ball represented the QLT.

c. Hearing on the Motions to Confirm and Vacate On January 25, 2011, the circuit court held a hearing on LPIHGC’s motion to confirm and Nordic’s motion to vacate. In 1 1 

### addition to its written arguments, Nordic orally argued that LPIHGC was attempting to confuse the issue of evident partiality by arguing the standard applicable to cases where full disclosure had been made, i.e., actual bias. Nordic further argued that waiver cannot occur when disclosures are insufficient because (1) neutral, as opposed to non-neutral, arbitrators have a higher duty to disclose; and (2) the original disclosure did not provide (a) notice of present and future relationships , and (b) “actual information that would impart actual knowledge.” In response, LPIHGC argued that Daiichi Hawaii Real Estate 1 2 

### Corp. v. Lichter, 103 Hawai # i 325, 82 P.3d 411 (2003), supplies the guiding standard for evident partiality. See 103 Hawai # i at

11 The H onora ble P atric k W. Borde r pre sided
12 As to the otherbase s Nor dic r aisedin i ts mo tion to va cate, LPIHG C arg ued t hat N ordic misr epres entedto t he co urt t hat n one o f the F-me ter data was p roduc ed du ring the a rbitr ationbeca use t he da ta wa s att achedas a n exhib it to LPIH GC’s replybrie f in the a rbitr ationproc eedin g. W ith r egardto the t aped recor ding, LPIH GC admitte d tha t the tape disc ussedshre ddingthe meeti ng mi nutes , how ever, “not hing was s hredd ed [a nd] [ a]ll the t apes and t he writt en mi nutes were actu ally turne d ove r to Nordi c andto [ ] [th e Arbit rator ].”
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### 342, 82 P.3d at 428 (quoting Washburn, 895 F. Supp. at 399) (“The relationship . . . must be so intimate--personally, socially, professionally, or financially--as to cast serious doubt on the arbitrator’s impartiality.”). LPIHGC also argued for a presumption that Nordic knew about Carlsmith Ball’s representation of the QLT because it and its counsel “have refused to go on record as to when and how they supposedly discovered that fact . . . .” In addition, LPIHGC argued that Nordic and its counsel had more “socially, personally intimate” relationships with the Arbitrator than LPIHGC’s counsel to the extent that the Arbitrator did not have (1) ex parte communications with LPIHGC counsel, (2) contact with Carlsmith Ball on the QLT matters, or (3) any previous connection or contact with Manaut on this
matter. Neither party, in its briefs or at the hearing, requested an evidentiary hearing so that the circuit court could address disputed issues of fact. At the close of the hearing, the circuit court took the matters under advisement. On March 24, 2011, the circuit court granted LPIHGC’s motion to confirm and denied Nordic’s motion to vacate without providing its reasoning or entering findings of fact and conclusions of law, then entered judgment accordingly.

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### D. Appeal to the Intermediate Court of Appeals On appeal, Nordic relied heavily on Kay v. Kaiser Foundation Health Plan, Inc., 119 Hawai # i 219, 194 P.3d 1181 (App. 2008), to argue that “if an arbitrator disclosed his relationships, the party may seek to disqualify him, but cannot complain if they did not; conversely, if the arbitrator did not make the required disclosure, and the undisclosed relationship is not trivial, the award is presumed to be tainted and must be vacated.” Nordic also argued that “it should have had the opportunity to consider whether [QLT’s] dual status as the arbitrator’s employer and fiduciary, and Carlsmith Ball’s client was a conflict” because the Arbitrator also failed to disclose that Carlsmith provided representation on three of the QLT’s “major assets” and represented the QLT in four mechanics lien actions, one of which was still ongoing post-award. Moreover, citing Hawai # i Probate Rule 42(a) (1995), Nordic argued that Carlsmith Ball’s 1 3 

### representation of the Arbitrator in his trustee capacity does not “excuse his nondisclosure, because in addition to his personal financial interest in the [QLT’s] continued success, trustees are

13 Rule 42(a) of t he Ha wai # i Pro bate Rules prov ides: An at torne y emp loyedby a fidu ciaryfor an es tate, guard iansh ip, o r tru st re prese nts t he fi ducia ry as clie nt as defin ed inRule 503( a) ofthe Hawai # i Rul es ofEvid ence and shall have all the r ights , pri vileg es, a nd ob ligat ions of the a ttorn ey-cl ient relat ionsh ip wi th th e fid uciar y ins ofar as th e fid uciar y is actin g in a fid uciar y rol e forthe benef it ofone or mo re be nefic iarie s or a war d.
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### the legal owners of the trust, and as such they are the named parties to every legal action, and every claim against the QLT is by law a personal action against the trustee.” Lastly, Nordic argued that the Arbitrator’s initial statement that “I have served” does not “sufficiently disclose that he was presently serving and may serve in the future” in order to put Nordic on notice that it must object. In its answering brief, LPIHGC argued that Nordic failed to meet its burden to prove specific facts of improper motives, and instead asked for a presumption of evident partiality in
contravention of the Hawai # i Supreme Court’s requirements in
Daiichi: that the “contacts be ‘intimate’ rather than tenuous or remote, that they cast ‘serious doubt’ on the arbitrator’s impartiality, and that the movant prove ‘specific facts’ of improper motives or conduct.” In reply, Nordic argued that it did not have a duty to investigate potential conflicts when neither it nor LPIHGC knew of the Arbitrator’s ties to Carlsmith Ball, and thus, could not have waived the claim. Applying a de novo standard of review, the ICA concluded that the circuit court erred in granting LPIHGC’s motion to confirm and denying Nordic’s motion to vacate because “[the Arbitrator’s] nondisclosures constitute ‘evident partiality’

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### requiring vacatur of the Award under HRS § 658A-23(a)(2).” Nordic, mem. op. at 8 (quoting Kay, 119 Hawai # i at 224, 194 P.3d at 1186). The ICA relied heavily upon Kay, and Valrose Maui, Inc. v. Maclyn Morris, Inc., 105 F. Supp. 2d 1118 (D. Haw. 2000) (“VMI”). Repeating its conclusion in Kay, the ICA stated that “an arbitrator cannot, as part of a long-standing and on-going activity, ask for and receive money from a party during the arbitration, without disclosing that fact to the other party.” Id. (quoting 119 Hawai # i at 230, 194 P.3d at 1192) (internal quotation marks omitted). The ICA also applied the holding in VMI to conclude that “arbitrators must take special care to disclose business or similar dealings with parties, or their counsel, that occur during the pendency of arbitration proceedings.” Nordic, mem. op. at 13. The ICA rejected LPIHGC’s waiver argument and concluded that “[t]o the extent that there is no showing that Nordic was aware of [the Arbitrator’s] contemporaneous work as a neutral with Carlsmith Ball and Starn O’Toole prior to issuance of the Award, Nordic has not waived its right to claim evident partiality.” Nordic, mem. op. at 17. According to the ICA, although the initial disclosure provided some notice of the Arbitrator’s role as neutral, it failed to raise the issue of the Arbitrator’s role as QLT trustee and Carlsmith’s representation of the QLT. Id.

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### Therefore, the ICA held that the Arbitrator’s cumulative failure to “disclose his contemporaneous work as neutral in three separate matters for [LPIHGC’s] law firms[]” and “that, in the course of his service as a QLT trustee, the QLT was represented by Carlsmith Ball in several litigation matters, including some that were contemporaneous with the arbitration proceeding” sufficiently established a reasonable impression of partiality, warranting vacatur of the award. Nordic, mem. op. at 14, 15; accord id. at 18. Accordingly, the ICA vacated the circuit court’s confirmation of the award and judgment, and remanded for further proceedings consistent with its Memorandum Opinion. Nordic, mem. op. at 18. Because the award was vacated solely on the issue of nondisclosure, the ICA did not address Nordic’s claims that the Arbitration Award was procured by fraud or undue means, or that the Arbitrator exceeded his powers. Id.
E. Certiorari Proceedings 1. LPIHGC’s Application LPIHGC presents the following questions in its application for writ of certiorari:

A. Did t he IC A errby c reati ng an d ret roact ivelyappl ying a newstan dard for f indin g evi dent parti alityunde r HRS § 658A- 23 wh ere: 1. The o nly s tatut ory p resumptionfor findi ng evide nt pa rtial ity i nvolv es un discl osed relat ionsh ips betwe en anarbi trato r anda pa rty, see H RS § 658A12(e) ; no statu tory presu mptio n exi sts f or a
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relat ionsh ip be tweenan a rbitr ator and c ounse l fora party ; 2. Evide nt pa rtial ity c ould only have been presu med from the r elati onshi p wit h cou nsel, whic h is contr ary to th e gov ernin g sta tute and h ighlyprej udici al to [LPIH GC]; 3. [The Arbit rator ] dis close d tha t he had relat ionsh ips w ith c ounse l forall parti es an d inv ited couns el to seekmore info rmati on iftheywere conce rned, but Nordi c’s c ounse l cho se no t to reque st furth er de tails unti l onl y aft er th e Awa rd wa s ent ered a yea r anda ha lf la ter; 4. Neith er [T he Ar bitra tor] nor t he GC ’s co unsel even knew about one of th e rel ation ships withcoun sel and a bsent suchknow ledge this coul d not have impa cted [The Arbit rator ]’s i mpart ialit y; 5. There was no fa ctual evid ence in th e rec ord t o suppo rt pa rtial ity, and n o Haw ai # i sta te ca se la w suppo rts t he re troac tive appli catio n of the I CA’s new presu mptiv e sta ndard ; 6. The I CA’s creat ion o f a n ew pr esump tive stand ard for e viden t par tiali ty no t onl y unf airlyvaca ted t he well- consi deredand well- suppo rted Awardin t he prese nt ca se, b ut wi ll al so un dermi ne an d cas t dou bt upon count less otherpend ing o r complete d arb itrat ion award s? B. Did t he IC A errin f indin g tha t Nor dic h ad no t wai ved its a bilit y to vacat e the Awar d foralle ged e viden t parti alityinvo lvingcoun sel w here, befo re th e iss uance of the Award: 1. Nordi c cho se no t to reque st an y add ition al infor matio n aft er re ceivi ng [T he Ar bitra tor]’ s gen eral discl osure s abo ut hi s rel ation ships withall couns el, despi te No rdic beinginvi ted t o do so; a nd 2. Nordi c’s c ounse l fai led t o dem onstr ate o r sta te underoaththat it d id no t kno w or couldnot have knownabou t the rela tions hip w ith o ne ofthe couns el at th e out set o f the arbi trati on, s ince this infor matio n was a ma tter of pu blic recor d on Ho # ohiki , and o therw ise w as av ailab le th roughNord ic’s lead couns el’s own f amili al co nnect ion w ith t he su bject trust enti ty? 

### We do not address all of the issues in detail, but provide guidance on remand in the Discussion section below. LPIHGC first argues that the ICA gravely erred in finding

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### evident partiality based on the mere existence and nondisclosure of specific details about unrelated, allegedly contemporaneous cases and “because it felt that ‘it was incumbent upon [the Arbitrator]’ to disclose a ‘relationship’ with Carlsmith due to his role as a QLT trustee.” Specifically, LPIHGC argues that the ICA mischaracterized the Arbitrator’s relationships with LPIHGC counsel, and ignored (1) the broad, general disclosure that invited further inquiry, (2) Nordic’s similar, undisclosed relationships with the Arbitrator, and (3) the Arbitrator’s lack of actual knowledge of the QLT’s relationship with Carlsmith Ball. Second, LPIHGC argues that the ICA created a per se rule or presumption of evident partiality that is contrary to legislative intent, which presumes evident partiality only when based on an arbitrator’s known, undisclosed relationship with parties. (citing HRS § 658A-12(a)(2)). Finally, LPIHGC argues that the ICA gravely erred in holding that Nordic did not waive its claim because LPIHGC failed to make a showing that Nordic knew or should have known about the undisclosed circumstances before the Arbitration Award was issued. LPIHGC argues that “[g]iven the policies favoring finality in arbitrations, the party seeking to vacate an Award should be required to prove why it did not know or could not have

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### known before the Award was entered, or else be deemed to have waived the ability to seek vacatur.”

2. Nordic’s Response In response, Nordic argues that the ICA correctly vacated the award because the Arbitrator failed to disclose multiple, ongoing relationships with LPIHGC’s law firms. Nordic argues 1 4 

### that the ICA did not apply a per se rule, but rather, applied the standard in HRS § 658A-12(a) and the test for evident partiality to conclude that the “undisclosed relationships were (1) not trivial; (2) ongoing throughout the parties’ arbitration; (3) numerous; and (4) the nature of which was the cause for vacatur in another decision” this court cited in Daiichi. In addition, Nordic contends that the initial disclosure did not sufficiently disclose the relationships to put Nordic on notice of the facts and trigger waiver of the claim. Nordic therefore argues that it is hardly reasonable to charge it with knowledge of the

14 Altho ugh N ordic did not a pply for c ertio rari, it p resen ts quest ions in it s res ponse , as follo ws:

1. Arbit rator ’s Fa ilure To D isclo se Re latio nship s. Ar e an arbit rator[sic ] ong oing fiduc iary and f inanc ial r elati onshi ps with the l awyer s forone partyto a n arb itrat ion—i nclud ing t he fact that one o f the part y’s l aw fi rms w as al so th e arb itrat or’s lawye rs—“f acts that a rea sonab le pe rson wouldcons ider likel y to affec t the impa rtial ity o f the arbi trato r” un der H aw. R ev. S tat. § 658A- 12? 2. Inqui ry No tice. Does a ne utral arbi trato r sat isfy the statu tory duty to di sclos e by makin g gen eral state ments that omit speci fic f acts regar ding ongoi ng ti es, a nd mu st th e par ties assum e incomplete disc losur e andinve stiga te fu rther , or be de emed to have waive d the righ t to an un biase d dec ision maker ? 26*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### relationships when LPIHGC lawyers and the Arbitrator claim that they were not aware, and the information was not available until October 2010.

3. LPIHGC’s Reply In reply, LPIHGC argued that (1) the Arbitrator provided the statutorily required disclosures and “no evidence exists that [the Arbitrator] did not disclose what he knew about the relationships with the parties or counsel[;]” (2) a reasonable person would not consider the Arbitrator’s role as neutral in other proceedings and as trustee of the QLT to be likely to affect “a well-respected, career Judge and arbitrator[’s]” obligation of neutrality; (3) Nordic must “prove evident partiality as a result of the relationship with counsel”; and (4) Nordic’s argument that it did not waive its claim is not supported by the facts or law. III. Discussion This court has yet to address a motion to vacate based on evident partiality governed by the Uniform Arbitration Act enacted by the Hawai # i legislature in 2001, see 2001 Haw. Sess. Laws Act 265, §1 at 810-19, and codified under HRS chapter 658A. In this section, we therefore provide a general framework of legal principles under HRS chapter 658A relevant to Nordic’s motion to vacate. We also address some common law principles that remain relevant to this case. After general discussion of

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### various legal principles, we analyze them in the context of this

case. A. Standard of Review

1. In General Daiichi’s “Standards of Review” section provides as follows:

A. Review Of AnArbi trati on Award Where a pa rty c halle nges an ar bitra tion award , the follo wing prece pts a re ap plica ble. Firs t, be cause of t he legis lativ e pol icy t o enc ourag e arb itrat ion a nd th ereby disco urage liti gatio n, ar bitra tors have broaddisc retio n in resol ving the d isput e. U pon s ubmis sion of anissu e, th e arbit ratorhas autho rity to de termi ne th e ent ire q uesti on, inclu ding the l egal const ructi on ofterm s of a con tract or lease , as well as th e dis putedfact s. I n fac t, wh ere t he parti es ag ree t o arb itrat e, th ey th erebyassu me al l the hazar ds ofthe arbit ratio n pro cess, incl udingthe risk that the a rbitr ators may make mista kes i n the appl icati on oflaw and i n the ir fi nding s of fact. Secon d, co rrela tivel y, ju dicia l rev iew o f an arbit ratio n awa rd is conf ined to th e str ictes t pos sible limit s. A n arb itrat ion a ward may b e vac ated only on th e four groun ds sp ecifi ed inHRS § 658 –9 an d mod ifiedand corre cted only on th e thr ee gr ounds spec ifiedin H RS § 658–1 0. M oreov er, t he co urts have no bu sines s wei ghingthe merit s of the a ward. Third , HRS §§ 6 58–9 and – 10 al so re stric t the autho rity of ap pella te co urts to re view judgm ents enter ed by circu it co urts confi rmingor v acati ng th e arb itrat ion award s. B. Fi nding s Of Fact And C onclu sions Of L aw We re view a tri al co urt’s find ings of fa ct un der t he clear ly er roneo us st andar d. A fin ding of fa ct is clea rly e rrone ous w hen, despi te evide nce t o sup port the f indin g, th e app ellat e cou rt is left with the d efini te an d fir m con victi on inrevi ewingthe entir e evi dence that a mi stake has been commi tted. A findi ng offact is a lso c learl y err oneou s whe n the reco rd lacks subs tanti al ev idenc e to suppo rt th e fin ding. We h ave defin ed ‘s ubsta ntial evid ence’ as c redib le ev idenc e whi ch is of su ffici ent q ualit y andprob ative valu e to enabl e a p erson of re asona ble c autio n to suppo rt a concl usion
. Hawai # i app ellat e cou rts r eviewconc lusio ns oflaw de novo, unde r the righ t/wro ng st andar d. U nder the r ight/ wrong

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stand ard, this court exam ines the f acts and a nswer s the quest ion w ithou t bei ng re quire d to give any w eight to t he trial cour t’s a nswerto i t. 

### 103 Hawai # i at 336-37, 22 at 422-23 (internal citations, ellipses, brackets, and quotation marks omitted). The promulgation of HRS chapter 658A has not materially changed this standard of review. Judicial review of arbitration awards remains limited to the statutory grounds for confirmation, vacatur, modification, and correction. See HRS § 658A-28(a)(3)- (5) (Supp. 2010) (permitting appeal from an order confirming or denying confirmation of an award, an order modifying or correcting an award, or an order vacating an award). As indicated supra, in reviewing an arbitration award, circuit courts are powerless to correct an arbitrator’s findings of fact even if clearly erroneous, or an arbitrator’s rulings on the law, even if wrong. See, e.g., Tatibouet v. Ellsworth, 99 Hawai # i 226, 236, 54 P.3d 397, 407 (2002) (“It is well settled that arbitration awards may not be vacated . . . if the arbitrators commit a legal or factual error in reaching its final decision.”); Gadd v. Kelley, 66 Haw. 431, 443, 667 P.2d 251, 259 (1983) (“[E]ven if the arbitrators had erred . . . , the court is powerless to vacate the award as long as the arbitrators’ actions did not rise to the level of the grounds specified in HRS § 658- 9(4)[.]”); Mars Constructors, Inc. v. Tropical Enters., Ltd., 51 Haw. 332, 336, 460 P.2d 317, 319 (1969) (“[A]ssuming that the

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### arbitrators [] erred in construing the construction contract, a mistake in the application of law and in their findings of fact, this mistake is not one of the three grounds specified in HRS [§] 658-10, and the circuit court correctly ruled that it was powerless to modify or correct the award.”); see also Thomas v. Trustees of Lunalilo Estate, 5 Haw. 39, 40 (Terr. 1883) (“[I]t is well settled that the award, if made in good faith, is conclusive upon the parties, and that [they] can[not] be permitted to prove that the arbitrators decided wrong either as to the law or the facts of the case.”) (internal quotation marks and citations omitted); Richards v. Ontai, 20 Haw. 198, 201 (Terr. 1910) (“[N]either the circuit court . . . nor this court on appeal can review the findings of fact or the rulings of law made by the arbitrator any further than may be necessary to determine the questions specifically mentioned in the statute[.]”). Appellate review of a motion to vacate, however, does not involve review of an arbitrator’s findings of fact or conclusions of law. Rather, it involves review of a circuit court’s factual findings and conclusions of law as to whether the statutorily outlined grounds for vacatur exist. In addressing a motion to vacate based on an arbitrator’s alleged violation of duties of inquiry and disclosure, the issue of whether a duty exists is a question of law. See Doe Parents

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### No. 1 v. Dep’t of Educ., 100 Hawai # i 34, 57, 58 P.3d 545, 568 (2002) (“The existence of a duty . . . is entirely a question of law.” (quoting Ruf v. Honolulu Police Dep’t, 89 Hawai # i 315, 320, 972 P.2d 1081, 1086 (1999)). The issue of whether a duty has been violated or breached is, however, a question of fact. See 100 Hawai # i at 57-58, 58 P.3d at 568-69 (“Whether there was a breach of duty or not . . . is a question for the trier of fact.”); see also Bidar v. Amfac, Inc., 66 Haw. 547, 552, 669 P.2d 154, 159 (1983). In addition, where material facts are in dispute as to whether a valid waiver exists, the issue of waiver is generally an issue of fact. Daiichi, 103 Hawai # i at 346 n. 17, 82 p.3d at 432 n.17 (“[T]he question [of] whether a valid waiver exists is generally a question of fact[.]”). Thus, in reviewing a circuit court’s rulings on a motion to vacate for evident partiality, an appellate court is not reviewing an arbitrator’s factual findings and application of law, which it is powerless to address, but the findings of fact and conclusions of law of the circuit court as to whether a duty of disclosure exists, which is a question of law; whether it has been breached, which is a question of fact; and whether any breach has been waived, which is also a question of fact. As indicated in Daiichi, issues of law are reviewed de novo but factual issues, if any, are addressed under a “clearly erroneous”

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### standard.2. Application to This Case 1 5 

### In its Memorandum Opinion, the ICA cited the following as the applicable standard of review:

We re view the c ircui t cou rt’s rulin g on an ar bitra tion awardde n ovo , ” but are also are m indfu l tha t the circ uit court ’s re view of ar bitra l awa rds must b e ext remel y nar row and e xceed inglydefe renti al. Judic ial r eviewof a n arb itrat ion a ward is limit ed bythe follo wing prece pts: First , bec ause of th e leg islat ive p olicy to en coura ge ar bitra tion and t hereb y disco urage liti gatio n, ar bitra tors have broaddisc retio n in resol ving the d isput e. Upon submi ssionof a n iss ue, t he arbit ratorhas autho rity to de termi ne th e entir e que stion , inc ludin g the lega l const ructi on ofterm s of a con tract or lease , as well as th e dis putedfact s. I n fact, wher e the part ies a gree to arbit rate, theyther eby a ssume all the hazar ds ofthe arbit ratio n pro cess, inclu ding the r isk t hat t he ar bitra tors may m ake m istak es inthe appli catio n of law a nd inthei r fin dings of f act. Secon d, co rrela tivel y, ju dicia l rev iew o f an ar bitra tion awardis c onfin ed to the stric test possi ble l imits . Anarbi trati on awardmay be va catedonlyon t he fo ur groun ds sp ecifi ed in[HRS ] § 6 58-9 and modif ied a nd co rrect ed on ly onthe three groun ds sp ecifi ed inHRS § 658 -10. Moreo ver, the c ourts have no b usine ss weigh ing t he me rits of th e awa rd. Third , HRS §§ 6 58-9 and - 10 al so re stric t the autho rity of ap pella te co urts to re view judgm ents enter ed bycirc uit c ourts conf irmin g or va catin g arb itrat ion a wards
. Kay v .Kais er Fo und. Healt h Pla n, In c., 1 19 Ha wai # i 219 , 224 ,

15 LPIHG C didnot speci fical ly al lege an in corre ct st andar d of revie w in it s app licat ion f or ce rtior ari. It d id, h oweve r, ra ise t he is sue o f wheth er “t he IC A err [ed] by cr eatin g andretr oacti vely apply ing a new stand ard for f indin g evi dent parti ality
. . . whe re . . . [ t]her e was no f actua l evide nce i n the reco rd to supp ort p artia lity
. . . .” See s upra, Part II.E .1. 32*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER ***
194 P .3d 1 181, 1186 (App. 2008) (int ernal quot ationmark s and citat ions omitt ed) ( quoti ng Sc hmidt v. P ac. B enefi t Ser vs., Inc., 113 Hawai # i 161 , 165 -66, 150 P .3d 8 10, 8 14-15 (200 6)). 

### Nordic, mem. op. at 8. The ICA cites to Kay for the standard of review. With respect to the first sentence of the ICA’s standard of review section, Kay quotes this court’s decision in Tatibouet, 99 Hawai # i 226, 54 P.3d 397. The referenced citation in Tatibouet repeats the established precept that “[t]he interpretation of a statute is a question of law reviewable de novo.” 99 Hawai # i at 233, 54 P.3d at 404. In the instant case, the circuit court denied the motion to vacate without explaining its reasoning or entering findings of fact and conclusions of law. On appeal, the ICA ruled that the Arbitrator’s cumulative failure to “disclose his contemporaneous work as neutral in three separate matters for [LPIHGC’s] law firms[]” and “that, in the course of his service as a QLT trustee, the QLT was represented by Carlsmith in several litigation matters, including some that were contemporaneous with the arbitration proceeding” sufficiently established a reasonable impression of partiality warranting vacatur of the award. Nordic, mem. op. at 14, 15; accord id. at 18. In so ruling, it is unclear whether the ICA applied the de novo standard referenced in its Memorandum Opinion or whether it concluded that, assuming the circuit court made findings in denying the

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### motion, such findings were clearly erroneous. If the ICA’s ruling was based on the applicable clearly erroneous standard, the circuit court did not state the basis of its ruling on the record or enter findings of fact, and therefore there were no factual findings upon which an appellate court could conduct a clearly erroneous review. Material facts were in dispute as to whether the duties of inquiry and disclosure were breached, as well as whether any breach, assuming breach had been established, had been waived.
B. Requirement of Evidentiary Hearing on Motion to Vacate When Material Facts are in Dispute 1. In General HRS § 658A-5 (Supp. 2010) provides in pertinent part that “an application for judicial relief under this chapter shall be made by motion to the court and heard in the manner provided by law . . . .” With respect to the law, our appellate courts have held that “whenever material facts are in dispute in determining whether an arbitration award should be vacated, the circuit court should conduct an evidentiary hearing and render findings of fact and conclusions of law in support of granting or denying [a] motion to vacate [an] arbitration award.” See Clawson, 71 Haw. at 79, 783 P.2d at 1232. In Daiichi, this court reviewed the circuit court’s findings of fact and conclusions of law on a motion to vacate. See 103 Hawai # i at 349 n.20, 82 P.3d at 435

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### n.20 (noting that the circuit court’s findings of fact were not clearly erroneous, but that its conclusion regarding waiver “was wrong as a matter of law[.]”). In addition to Daiichi, Kay, 119 Hawai # i at 222, 194 P.3d at 1184 (holding that “an arbitrator’s failure to disclose her direct, personal involvement in ongoing fund-raising solicitations to one of the parties, while the arbitration is pending, creates an impression of partiality or possible bias”), Gadd v. Kelley, 66 Haw. 431, 442, 667 P.2d 251, 259 (1983) (holding that evidence sustained the circuit court’s written findings and conclusions in support of confirmation of an arbitration award that “at all times during the proceedings, the members of the arbitration panel acted in a fair and impartial manner[]”), and Brennan v. Stewarts’ Pharmacies, Ltd., 59 Haw. 207, 579 P.2d 673 (1978) (affirming the circuit court’s conclusions in support of vacating an arbitration award on the bases of evident partiality and exceeding authority), all involved appellate court review of a circuit court’s findings of fact and conclusions of law regarding motions to vacate arbitration awards. More recently, in Low v. Minichino, 126 Hawai # i 99, 267 P.3d 683 (App. 2011), the ICA held that a prospective home purchaser made a prima facie showing that an arbitration award was procured by fraud, warranting an evidentiary hearing on her motion to

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### vacate, and appropriately and remanded the case for an evidentiary hearing. 126 Hawai # i at 108, 267 P.3d at 692.

2. Application to This Case In this case, neither party requested an evidentiary hearing. The circuit court then denied the motion to vacate without explaining the reasons for its ruling on the record and without entering findings of fact or conclusions of law. Material facts are in dispute, as discussed below; therefore, although not requested by the parties, the circuit court should have conducted an evidentiary hearing and rendered findings of fact and conclusions of law. In addition to issues of fact regarding evident partiality that have been the focus of this appeal, the circuit court did not address whether there are disputes of material fact regarding fraud and exceeding authority, additional bases on which Nordic moved to vacate the Arbitration Award. If there are, the circuit court must also determine those issues on remand. We now turn to issues that may arise during the evidentiary hearing on remand.
C. Disclosure Requirements Under HRS § 658A-12(a) and (b) 1. In General As noted in Daiichi at footnote 5, 103 Hawai # i at 330 n.5, 22 P.3d at 416 n.5, “[t]he former HRS chapter 658 contained no express provision relating to an arbitrator’s duty to

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### disclose.” HRS § 658A-12 now specifically provides, in 1 6 

### pertinent part:

§658A -12 D isclo sure by arbitra tor. (a) Befor e acc eptin g appoi ntmen t, anindi vidua l who is r eques ted t o ser ve as an arbit rator , aft er ma king a rea sonab le in quiry , sha ll discl ose t o all part ies t o the agre ement to a rbitr ate a nd arbit ratio n pro ceedi ng an d to any o ther arbit rator s any knownfact s tha t a r eason able perso n wou ld co nside r lik ely to af fect the i mpart ialit y of the a rbitr ator in th e arbit ratio n pro ceedi ng, i nclud ing: (1) A fin ancia l or perso nal i ntere st inthe outco me of th e arb itrat ion p rocee ding; and (2) An ex istin g or past relat ionsh ip wi th an y of the parti es to the agree ment to ar bitra te orthe arbit ratio n pro ceedi ng, t heir couns el or repre senta tives , a w itnes s, oranot her a rbitr ator. (b) An ar bitra tor h as a conti nuingobli gatio n to discl ose to al l par ties to th e agr eemen t to arbit rate and a rbitr ation proce edingand to an y oth er ar bitra tors any f acts that the arbit ratorlear ns af ter a ccept ing a ppoin tment whic h a reaso nable pers on wo uld c onsid er li kely to af fect the impar tiali ty ofthe arbit rator .

. . . . 

### HRS § 658A-12(a)-(b) (emphasis added). Therefore, under HRS § 658A-12(a), an arbitrator must make a reasonable inquiry before accepting appointment. The Commentary to the Uniform Arbitration Act (UAA) (2001) (hereinafter “Commentary”), drafted by National Conference of Commissioners on Uniform State Laws, states as follows:

Secti on 12 (a) r equir es anarbi trato r to make a “re asona ble inqui ry” p rior to ac cepti ng anappo intme nt as to a ny poten tial confl ict o f int erest s. Th e ext ent o f thi s inq uiry may d ependuponthe circu mstan ces o f the situ ationand the custo m in a par ticul ar in dustr y. Fo r ins tance , an attor ney in a law f irm m ay be requ ired to ch eck w ith o ther attor neys

16 In Da iichi , a n on-ne utral arbi trato r act ed ina ma nner that did not p ortra y his clos e per sonal , pro fessi onal, and finan cial relat ionsh ips w ith a par ty an d its coun sel. See gener ally 103 H awai # i at 329-3 1, 82 P.3dat 415-1 7. 37*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER ***
in th e fir m to deter mine if ac cepta nce o f an appoi ntmen t as an ar bitra tor w ould resul t in a con flict of i ntere st onthe part of th at at torne y bec ause of re prese ntati on byan attor ney i n the same law firm of on e of the p artie s in anoth er ma tter. 

### Nat’l Conference of Comm’rs on Unif. State Laws, Uniform Arbitration Act (Last Revisions Completed Year 2000), 48 (Dec. 13, 2000), http://www.uniformlaws.org/shared/docs/arbitration/arbitration_fi nal_00.pdf (emphasis added). According to the Commentary, what constitutes a reasonable inquiry varies depending on the circumstances, and whether the duty of reasonable inquiry has been violated is a question of fact. After making a reasonable inquiry, the arbitrator must then disclose information that a reasonable person would consider likely to affect impartiality. The Commentary further provides:

Once an ar bitra tor h as ma de a “reas onabl e inq uiry” as requi red b y Sec tion 12(a) , the arbi trato r wil l be requi red to di sclos e onl y “kn own f acts” that migh t aff ect impar tiali ty. T he te rm “k nowle dge” (whic h is inten ded t o inclu de “k nown” ) is defin ed inSect ion 1 (4) t o mea n “ac tual knowl edge. ” [17] 

### Commentary, supra, at 48. The arbitrator also has a continuing obligation to disclose such facts a reasonable person would consider likely to affect impartiality after appointment under HRS § 658A-12(b). 1 8

17 It is poss ible that an ar bitra tor w ould not d iscov er fa cts a reaso nable pers on wo uld f ind l ikelyto a ffect impa rtial ity d espit e mak ing a “reas onabl e inq uiry. ” 18 We no te th at th e dim inish ed st andar d of discl osure allo wed b y thi s (cont inued ...) 38*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### HRS § 658A-12 is a culmination of case law developed from the seminal United States Supreme Court case of Commonwealth Coatings Corp. v. Continental Casualty Co., 393 U.S. 145 (1968), which we cited in Daiichi. See 103 Hawai # i at 340-41, 82 P.3d at 426-27. In Commonwealth, the United States Supreme Court addressed the circumstances under which the United States Arbitration Act § 10, 9 U.S.C. § 10(b), authorizes vacatur of 1 9 

### an arbitration award for failure to disclose the existence of a close financial relationship between a neutral arbitrator and a party to the arbitration. 393 U.S. at 146–48. The neutral member of a three-arbitrator panel failed to disclose his engagement in periodic and significant business relations with one of the parties to the arbitration for approximately six years before the arbitration. 393 U.S. at 146. The United States

(...c ontin ued) court in D aiich i fornon- neutr al ar bitra tors no lo nger appli es du e to the affir mativ e dut y of discl osure in H RS § 658A- 12. See 1 03 Ha wai # i at 349-5 0, 82 P. 3d at 435- 36 (A coba, J., disse nting ) (di sagre eing with the m ajori ty th at non-n eutra l arb itrat ors a re su bject to a diff erent stan dard of di sclos ure t hat permi ts th em to prov ide a broa d, ge neral disc losur e, an d opi ning that an aw ard shoul d be set a side when the d isclo sure is mi slead ing a nd in adequ ate). 19 At th e rel evant time , 9 U .S.C. § 10 (b) p rovid ed, i n per tinen t part: In ei ther of th e fol lowin g cas es th e Uni ted S tates cour t in

and f or th e dis trict wher ein t he aw ard w as ma de ma y mak e an ordervaca ting the a ward upon the a pplic ationof a ny pa rty to th e arb itrat ion--

. . . (b) W here there was evide nt pa rtial ity o r cor rupti on inthe arbit rator s, oreith er ofthem
. . . . See C ommon wealt h, 39 3 U.S . at 147 n .1 (i ntern al qu otati on ma rks o mitte d). 39*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### Supreme Court reversed the decision of the United States Court of Appeals for the First Circuit, which had affirmed the district court’s refusal to set aside the arbitration award. 393 U.S. at 150. The Commentary discusses Commonwealth as follows:

Membe rs ofthe Court diff ered, howe ver, on th e sta ndard s for discl osure . Jus tice Black , wri ting for a four -judg e plura lity, conc ludedthat disc losur e of “any deali ngs t hat might crea te animpr essio n of possi ble b ias” or cr eatin g “evenan a ppear ance of bi as” w ould amoun t to evide nt parti ality . Id. at 14 9. Ju stice Whit e, ina co ncurr ence joine d by Justi ce Ma rshal l, su pport ed a more limit ed te st whichwoul d req uire discl osure of “ a sub stant ial i ntere st in a fir m whi ch ha s don e mor e tha n tri vial busin ess w ith a party .” Id
. at 15 0. Th ree d issen ting justi ces f avore d an appro ach u nder whichan a rbitr ator’ s fai lure to di sclos e certa in re latio nship s est ablis hed a rebu ttabl e pre sumpt ion of pa rtial ity. The s plit of op inionin C ommon wealt h Coa tings is r eflec ted in ma ny su bsequ ent d ecisi ons a ddres sing motio ns to vaca te award s on groun ds of“evi dent parti ality ” und er fe deral and state law. A nu mber of de cisio ns ha ve ap pliedtest s aki n to Justi ce Bl ack’s “app earan ce ofbias ” tes t. Se e, e. g., S .S. Co. v . Coo k Ind us., Inc., 495 F.2d 1260, 1263 (2d Cir. 1973) (appl ying FAA; failu re to disc lose relat ionsh ips t hat “ might creat e an impre ssionof p ossib le bi as”). Some cour ts ha ve intro ducedan o bject ive e lemen t int o the stan dard – tha t is, viewi ng th e fac ts fr om th e sta ndpoi nt ofa re asona ble p erson appri sed o f all the circu mstan ces. See, e.g., Ceri ale v
. AMCO Ins. Co., 48 Ca l. Ap p.4th500, 55 C al. Rptr. 2d 68 5 (1996 )(fin ding that quest ion i s whe ther recor d rev eals facts whichmigh t cre ate a n imp ressi on ofposs ible bias in ey es of hypot hetic al, r eason able perso n). A gre ater numbe r of othercour ts, m indfu l of the t radeo ff betwe en imparti alityand exper tise inher ent i n arb itrat ion, have place d a h igherburd en onthos e see king to va cate award s on groun ds ofarbi trato r int erest s or relat ionsh ips. See, e.g., Meri t Ins . Co. v. L eathe rby I ns. C o., 7 14 F. 2d 673, 681 ( 7th C ir. 1 983), cert . den ied, 464 U .S. 1 009, 104 S. Ct . 529 , 78 L. Ed .2d 7 11, m odifi ed, 7 28 F. 2d 94 3 (7t h Cir. 1984) (app lyingFAA; circ umsta nces must be “p owerf ully sugge stive of b ias”) ; Art ists & Cra ftsme n Bui lders , Ltd . v. Schap iro, 232 A .D.2d265, 648 N.Y.S .2d 5 50 (1 996) (stat ing that thoug h awa rd ma y be overt urnedon p roof of ap peara nce of bi as orpart ialit y, pa rty s eekin g to vacat e has heav y burde n andmust showprej udice ). 

### Commentary, supra, at 46-47.
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### As noted by the Commentary, there was no majority in Commonwealth regarding standards for disclosure, and subsequent case law has varied on disclosure requirements. The former HRS chapter 658 also contained no disclosure requirement, and the common law tension noted in the Commentary is similarly reflected in Hawai # i cases on disclosure standards, as evidenced by the conflicting disclosure standards argued by Nordic and LPIHGC throughout this litigation. Regardless of any confusion that may have existed, the Hawai # i legislature adopted Section 12 of the UAA in its entirety. Compare HRS § 658A-12 with Commentary, supra, at 44-45 (UAA section 12 is identical to HRS § 658A-12). Thus, arbitrators in arbitrations governed by HRS chapter 658A are nowrequired to follow the disclosure requirements of HRS § 658A12(a). In this regard, according to the Commentary to UAA Section 12(a):

2. Inviewof t he cr itica l imp ortan ce ofarbi trato r

discl osure to p arty choic e andperc eptio ns offair ness and the n eed f or mo re co nsist ent s tanda rds t o ens ure expec tatio ns inthis vita l are a, Se ction12 s ets f orth affir mativ e req uirem ents to as sure that parti es sh ould [have ] acc ess t o all info rmati on th at mi ght r eason ably affec t the pote ntial arbi trato r’s n eutra lity. Sect ion 1 2 is the AAA/AB A Cod e of Ethic s forArbi trato rs inComm ercia l Dispu tes ( 1977) , whi ch embodie s the prin ciple that “arbi trato rs sh ould discl ose t he ex isten ce ofany inter ests or re latio nship s whi ch ar e lik ely t o aff ect t heir impar tiali ty orwhic h mig ht re asona bly c reate the appea rance of pa rtial ity o r bia s.” .
. . The D rafti ng Co mmitt ee de cidedto d elete the requi remen t of discl osing“any ” fin ancia l or perso nal inter est i n the outc ome o r “an y” ex istin g or past relat ionsh ip an d sub stitu ted t he te rms “ a” fi nanci al or
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perso nal i ntere st inthe outco me or“an” exis ting or pa st relat ionsh ip. T he in tent was n ot to incl ude de mi nimis inter ests or re latio nship s. Fo r exa mple, if a n arb itrat or owneda mu tual fund whichas p art o f a l arge portf olio of inves tment s hel d som e sha res o f sto ck ina co rpora tion invol ved a s a p arty in anarbi trati on, i t mig ht no t be reaso nable to e xpect the arbit ratorto k now o f suc h inves tment and in an y eve nt th e inv estme nt mi ght b e of such an in subst antia l nat ure s o as not t o rea sonab ly af fect the impar tiali ty ofthe arbit rator . 3. Th e fun damen tal s tanda rd ofSect ion 1 2(a) is an objec tive one: discl osure is r equir ed offact s tha t a reaso nable pers on wo uld c onsid er li kely to af fect the arbit rator ’s imparti alityin t he ar bitra tion proce eding
. 

### Commentary, supra, at 47-48. Thus, pursuant to HRS § 658A-12(a), although disclosure of de mininis interests or relationships is not required, arbitrators must at the outset disclose, then continually disclose throughout the course of an arbitration proceeding, any known facts that a reasonable person would consider likely to affect the arbitrator’s impartiality. With respect to the duty of disclosure, we also address several subissues of law.

a. “Counsel” Under HRS § 658A-12(a)(2) Does Not Include All Attorneys in a Law Firm The ICA’s ruling vacating the Arbitration Award cited to HRS § 658A-12(a)(2), which requires disclosure of relationships with a party’s “counsel.” Nordic, mem. op. at 9. The ICA construed “counsel” under HRS § 658A-12(a)(2) to include all attorneys within the law firms of attorneys representing parties to the arbitration. In doing so, the ICA relied heavily on VMI, 105 F. Supp. 2d
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### 1118. Nordic, mem. op. at 11-13. VMI held that an arbitrator demonstrated a “reasonable impression of partiality” where he engaged in undisclosed ex parte discussions with VMI’s attorney that led to his role as a mediator in an unrelated matter involving that attorney during the pendency of the arbitration. 105 F. Supp. 2d at 1120. Although the federal district court stated that it was “convinced that . . . both VMI’s counsel and the Arbitrator were acting in good faith[,] . . . the nondisclosure of the discussion and appointment . . . was clearly a serious failing that warrants vacating the Arbitration Award.” 105 F. Supp. 2d at 1123-24. Although VMI was decided under HRS chapter 658, which contained no specific disclosure requirements, if decided now, the arbitrator’s nondisclosure of ex parte communications with a party’s attorney regarding his retention asa mediator in another case would clearly trigger HRS § 658A12(a)(2), which requires disclosure of “relationship[s] with any of the parties to the agreement . . . [and] their counsel . . . [,]” as well as the continuing obligation of disclosure under HRS § 658A-12(b). The issue of law in this case, however, is whether “counsel” under HRS § 658A-12(a)(2) includes all attorneys in a law firm representing a party to the arbitration. For the reasons below, we hold it does not.

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### No definition of “counsel” is provided in HRS chapter 658A. Black’s Law Dictionary, however, defines “counsel,” inter alia, as “[o]ne or more lawyers who represent a client[.]” See Black’s Law Dictionary 401 (9th ed. 2009). Thus, “counsel” under HRS § 658A-12(a)(2) means the attorney representing the party. In addition, the Commentary to UAA Section 12 distinguishes its use of the terms, “attorney,” “law firm,” and “counsel, and includes the phrase “[i]f the parties are represented by counsel or other authorized persons, the arbitrators can make such representations to those individuals.” Commentary, supra, at 49 (emphasis added). Thus, “counsel” in this context does not mean all attorneys in a law firm. Moreover, construing “counsel” to include all attorneys within a law firm would contravene “the effectiveness of arbitration as a vehicle for the resolution of disputes[,]” which “depends in part upon the predictability of its efficiency.” Daiichi, 103 Hawai # i at 339, 82 P.3d at 425. Many law firms now have multiple offices throughout the United States and also worldwide, with over 1000 attorneys. Defining “counsel” to include all attorneys in a law firm would require arbitrators to ascertain and review the names of all attorneys of a law firm, and would most likely result in excessive preemptive disclosures of relationships with attorneys in the firm. The continuing duty

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### of disclosure would also require an arbitrator to keep up with attorneys entering or leaving such law firms in order to satisfy the continuing duty of disclosure. Thus, as a matter of law, “counsel” under HRS § 658A-12 does not include all attorneys in the law firm of an attorney representing a party to an arbitration.

b. Pursuant to HRS § 658A-12(a), an Arbitrator Must Still Disclose Any Relationships that a Reasonable Person Would Consider Likely to Affect the Arbitrator’s Impartiality Although “counsel” refers only to the attorneys representing parties to an arbitration and not all attorneys in their firms, HRS § 658A-12(a) requires that an arbitrator disclose facts that a reasonable person would consider likely to affect the arbitrator’s impartiality. Depending on the circumstances, such facts could include an arbitrator’s relationships with other attorneys within a law firm of counsel representing a party to the arbitration. As the ICA stated in Kay, an “arbitrator’s failure to disclose to the parties any dealings that might create ‘an impression of possible bias’ is sufficient to support vacatur.” 119 Hawai # i at 226, 194 P.3d at 1188 (emphasis added) (citations omitted). In this regard, the Texas Supreme Court held “that a neutral arbitrator selected by the parties or their representatives exhibits evident partiality . . . if the arbitrator does not

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### disclose facts which might, to an objective observer, create a reasonable impression of the arbitrator’s partiality.” Burlington Northern R. Co. v. TUCO Inc., 960 S.W.2d 629, 630 (Tex. 1997). In that case, a neutral arbitrator sitting on a panel of three failed to disclose his acceptance, during the course of the arbitration, of a substantial referral from the law firm of a non-neutral co-arbitrator appointed by one of the parties to the arbitration. 960 S.W.2d at 630. The neutral arbitrator had disclosed that the co-arbitrator’s law firm had twice retained him as an expert witness in relatively small matters that had concluded, but continued serving on the panel without disclosing the subsequent substantial referral. 960 S.W.2d at 630-31. 2 0 

### Even though the co-arbitrator whose firm referred the matter to the arbitrator did not know about the referral and had no involvement in procuring it, and despite the argument that the relationship was “too indirect” because the law firm was neither a party to the arbitration nor counsel for a party, the Texas Supreme Court held “that a party who could have vetoed the arbitrator at the time of selection may disqualify the arbitrator

20 The t rial court had denie d the moti on to vaca te. 960 S .W.2dat 632. The court of a ppeal s con clude d tha t a f actua l iss ue re gardi ng ev ident parti alityexis ted, and r emand ed fo r a t rial on th at is sue. Id. The Texas Supre me Co urt f ound evide nt pa rtial ity, effec tivel y act ing a s fac tfind er, a proce dure we de cline to a dopt. 960 S.W. 2d at 639. In addit ion, altho ugh Burli ngtonis f actua lly d istin guish able, we r efer to it to o utlin e pos sible facts to c onsid er. 46*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### during the course of the proceedings based on a new conflict which might reasonably affect the arbitrator’s impartiality.” 960 S.W.2d at 637. In reaching this holding, the court explained that “[a]n objective observer could still reasonably believe that a person in [the arbitrator’s] position, grateful for the referral, may have been inclined to favor [the law firm] as an entity (and thus [the party it represented] indirectly) in the arbitration proceedings by siding with [the co-arbitrator whose firm referred him].” Id. (noting that the arbitrator was moved to thank the co-arbitrator for the referral in the midst of the arbitration proceeding). The majority in Burlington further opined that “the fact that a reasonable person could conclude that the referral might affect [the arbitrator’s] impartiality triggers the duty of disclosure[]” such that his failure to disclose the referral constitutes evident partiality. 960 S.W.2d at 639 (The court also “fully recognize[d] that reasonable people could debate whether the referral was likely to affect [the arbitrator’s] impartiality.”).

2. Application to This Case

a. The Arbitrator’s Retention as a Neutral By Attorneys of Law Firms Representing LPIHGC The Arbitrator knew of his retention as a neutral by attorneys of law firms representing LPIHGC. Applying the law outlined above, on remand, the circuit court must address whether

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### a reasonable person would view the three referrals for contemporaneous work as neutral by members of LPIHGC’s law firms likely to affect the Arbitrator’s impartiality. If so, the Arbitrator had a duty to disclose this information.

b. Carlsmith Ball’s Representation of the Arbitrator as Trustee of QLT LPIHGC asserts that the Arbitrator did not know of Carlsmith Ball’s representation of him in his capacity as trustee of the QLT. In order to satisfy the duty of disclosure, however, HRS § 658A-12(a) requires that an arbitrator “mak[e] a reasonable inquiry.” Thus, if the circuit court finds that this relationship is of the nature that a reasonable person would consider likely to affect the Arbitrator’s impartiality, the Arbitrator had a duty of reasonable inquiry to ascertain and disclose the information. In this case, there is no question that such information would have become “known” had an inquiry been made, as evidenced by the Arbitrator’s subsequent disclosure. With respect to whether there was a duty of disclosure, the ICA stated that “it was incumbent upon [the Arbitrator] to disclose this relationship with Carlsmith” because “[o]nly then could Nordic have evaluated whether Carlsmith’s representation of the QLT would affect Nordic’s decision on whether to select [the Arbitrator] . . . or sought further information . . . .” Nordic,

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### mem. op. at 15 (citing Schmitz v. Zilveti, 20 F.3d 1043, 1047 (9th Cir. 1994) (“The parties can choose their arbitrators intelligently only when facts showing potential partiality are disclosed.”)). Haitsuka, the Carlsmith Ball attorney who directly handled the QLT matters, declared that he never communicated with the Arbitrator on any trustee issues or anything related to the arbitration, and had only spoken to the QLT’s executive officers and managers. He also stated that Carlsmith Ball has not represented the Arbitrator in his individual capacity. In addition, since 2002, the QLT apparently retained at least thirty-one law firms or attorneys, including Carlsmith Ball, and Carlsmith Ball apparently also represented parties with interests adverse to the QLT. Nordic raises questions, however, regarding the extent of the Arbitrator’s role and involvement in the QLT-Carlsmith litigation matters. In general, a trustee does not have any 2 1 

### personal financial gain from trust litigation and has no personal

21 For e xampl e, No rdic cites to H awai # i Pro bate Rule 42(a) as t he type of in forma tion it mi ght h ave c onsid ered in it s eva luati on, w hich provi des: An at torne y emp loyedby a fidu ciaryfor an es tate,

guard iansh ip, o r tru st re prese nts t he fi ducia ry as clie nt as defin ed inRule 503( a) ofthe Hawai # i Rul es ofEvid ence and shall have all the r ights , pri vileg es, a nd ob ligat ions of the a ttorn ey-cl ient relat ionsh ip wi th th e fid uciar y ins ofar as th e fid uciar y is actin g in a fid uciar y rol e forthe benef it ofone or mo re be nefic iarie s or a war d. 49*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### liability when sued as a trustee. Nordic asserts, however, 2 2 

### that in determining whether an impression of partiality exists, a reasonable person might also consider the impact of a law firm’s representation of the trust in assuring continuation of the Arbitrator’s compensation as trustee. See Beebe Med. Ctr., Inc. v. InSight Health Servs. Corp., 751 A.2d 426, 432-33 (Del. Ch. 1999) (holding that an arbitrator’s failure to disclose that the same attorneys who were representing the arbitrator in unrelated litigation, which “he had over $100,000 riding on,” were also representing a party to the arbitration “is, in itself, sufficient to constitute evident partiality”). 2 3 

### The Arbitrator had a duty to disclose Carlsmith Ball’s representation of him as a QLT trustee if a reasonable person

22 Resta temen t (Th ird) of Tr usts § 106 (201 2) pr ovide s: A tru stee is pe rsona lly l iable : (1) o n a c ontra ct en teredinto in t he co urse of tr ust admin istra tion only if: (a) i n so doing , the trus tee c ommit ted a brea ch of tr ust; or (b) t he tr ustee ’s re prese ntati ve ca pacit y was undis close d andunkn own t o the thir d par ty; o r (c) t he co ntrac t so provi des; (2) f or a tort commi tted in th e cou rse o f tru st admin istra tion, or f or anobli gatio n ari sing from the trust ee’s owner ship or co ntrol of t rust prope rty, only if th e tru stee is pe rsona lly a t fau lt. 23 There is n o adm issib le ev idenc e to subst antia te No rdic’ s alleg ationthat the Arbit ratorrece ives a sixfigu re an nual compe nsati on as trust ee ofthe QLT t rust. 50*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### would consider the actual relationship between the Arbitrator and Carlsmith Ball likely to affect his impartiality. In other words, it is possible that facts discovered after an inquiry would not trigger the duty of disclosure, if a reasonable person would not consider such facts likely to affect an arbitrator’s impartiality. Thus, upon remand, the circuit court must determine whether the Arbitrator’s duty of reasonable inquiry included a duty to ascertain the identities of attorneys and/or law firms representing the QLT. If so, the circuit court must also determine whether a reasonable person would consider the actual relationship between the Arbitrator and Carlsmith Ball likely to affect his impartiality such that the Arbitrator violated his duty of disclosure by not disclosing Carlsmith Ball’s representation of him as trustee.
D. Effect of an Arbitrator’s Failure to Disclose 1. In General If an arbitrator fails to disclose facts that a reasonable person would consider likely to affect his impartiality, pursuant to HRS § 658A-12(d), “upon timely objection by a party, the court under section 658A-23(a)(2) may vacate an award.” 2 4 

### HRS § 658A-23 provides in relevant part as follows: (a) Upon motio n to the c ourt by a partyto a n arb itrat ion

24 The i ssue of wh ether“may ” act uallygive s the circ uit c ourt discr etionto d eny v acatu r aft er fi ndingevid ent p artia lity is ad dress ed in Part III.F , bel ow. 51*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER ***

proce eding , the cour t sha ll va cate an aw ard m ade i n the arbit ratio n pro ceedi ng if : (1) The a ward was p rocur ed bycorr uptio n, fr aud, or otherundu e mea ns; (2) There was: (A) Evide nt pa rtial ity b y an arbit rator appoi nted as a neutr al ar bitra tor; (B) C orrup tion by anarbi trato r; or (C) M iscon duct by anarbi trato r pre judic ing t he right s of a par ty to the arbit ratio n pro ceedi ng

. . . (4) An ar bitra tor e xceed ed th e arb itrat or's power s;

. . . . 

### As noted in Daiichi, HRS § 658A-23(a)(2)(A) now limits the ground for vacating an award on the basis of “evident partiality” to the “arbitrator appointed as a neutral arbitrator.” 103
Hawai # i at 339, 82 P.3d at 425. At first glance, it may seem that after a determination that an arbitrator failed to disclose a fact a reasonable person would consider likely to affect his impartiality, there must also be a separate finding that the arbitrator acted with “evident partiality” or bias before an award can be vacated. As explained below, however, a failure to meet disclosure requirements under HRS § 658A-12(a) or (b) is equivalent to, or constitutes, “evident partiality” as a matter of law. The Commentary to UAA Section 23 merely states that “Section 23(a)(2) is based on UAA Section 12(a)(2). The reason ‘evident partiality’ is a grounds for vacatur only for a neutral arbitrator is because non-neutral arbitrators, unless otherwise agreed, serve as representatives of the parties appointing them.” Commentary, supra, at 79. The Commentary’s discussion of what
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### constitutes “evident partiality” occurs entirely in the comments regarding disclosure requirements under Section 12(a). As reflected in the Commentary, quoted above in Part III.C.1, the differing views on the standards of disclosure parallel the differing views on what constitutes “evident partiality. This correlation between the standards of disclosure and “evident partiality” is also reflected in our case law. As this court stated in Daiichi:

Insof ar as sect ion 1 0(b) of th e Fed eral Arbit ratio n Act (9 U.S.C . § 1 et s eq.) is th e fed eral count erpar t of HRS § 658–9 (2), this juris dicti on’s appel late court s hav e consi stent ly re lied on fe deral case law in as certa iningwhat const itute s “ev ident part ialit y” un der H RS § 658–9 (2). What const itute s “ev ident part ialit y” su ffici ent t o vacat e an arbit ratio n awa rd is a di fficu lt qu estio n. UnderHawa i # i law , “ev ident part ialit y” su ffici ent t o vacat e an arbit ratio n awa rd ma y be demon strat ed wh en a confl ict o f int erest exis ts wi th th e arb itrat or. T hat is, w hen a n arb itrat or ha s a p erson al, p rofes siona l, or bu sines s rel ation ship with a par ty, i ts co unsel , princ ipal, or a gent, a co nflic t of inter est m ay ar ise suffi cient to j ustif y vac atingthat arbi trati on aw ard. Hawai # i cou rts h ave e xplai ned t hat e viden t par tiali ty not o nly e xists whenther e is actua l bia s on the p art of th e arb itrat or, b ut al so wh en un discl osed facts demon strat e a “ reaso nable impr essio n of parti ality .” 

### 103 Hawai # i at 339-40, 82 P.3d at 425-26 (quoting VMI, 105 F. Supp. 2d at 1124) (emphasis added) (internal citations omitted). HRS § 658A-12 has explicitly adopted a requirement to disclose facts a reasonable person would find likely to affect an arbitrator’s impartiality. Pursuant to Daiichi, “evident partiality” exists not only when there is actual bias on the part of an arbitrator, “but also when undisclosed facts demonstrate a

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### reasonable impression of partiality.” 103 Hawai # i at 340, 82 P.3d at 426 (internal quotation marks and citations omitted). Therefore, a failure to disclose facts a reasonable person would consider likely to affect the arbitrator’s impartiality constitutes “evident partiality” under HRS § 658A-23(a)(2). We also point out a few additional sections within HRS chapter 658A that may become relevant in the circuit court’s evidentiary hearing on remand. First, “[t]he burden of proving facts which would establish a reasonable impression of partiality rests squarely on the party challenging the award.” 103 Hawai # i at 339, 82 P.3d at 425 (quoting Sheet Metal Workers Int’l Ass’n Local Union 420 v. Kinney Air Conditioning Co., 756 F.2d 742, 745 (9th Cir. 1985)). Also, HRS § 658A-12(e) provides, in relevant part:

An ar bitra tor a ppoin ted a s a n eutra l arb itrat or wh o doe s not

discl ose a know n, di rect, and mater ial i ntere st inthe outco me ofthe arbit ratio n pro ceedi ng ora kn own, exist ing, and s ubsta ntial rela tions hip w ith a part y is presu med t o act with evide nt pa rtial ity u nder secti on 65 8A-23 (a)(2 ). 

### Finally, HRS § 658A-14(d)(2) (Supp. 2010) provides, in pertinent part:

In a judic ial, admin istra tive, or s imila r pro ceedi ng, a n

arbit ratoror r epres entat ive o f an arbit ratio n org aniza tion is no t competen t to testi fy, a nd sh all n ot be requ ired to produ ce re cords as t o anystat ement , con duct, deci sion, or rulin g occ urrin g dur ing t he ar bitra tion proce eding , to the same exten t as a jud ge ofa co urt o f thi s Sta te ac ting in a judic ial c apaci ty. This subse ctiondoes not apply :

. . . (2) To a heari ng ona mo tion to va cate an aw ard u nder secti on 65 8A-23 (a)(1 ) or (2) i f the mova nt es tabli shes
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### Thus, an arbitrator can be called to testify at an evidentiary hearing only if a party establishes prima facie that a ground for vacatur exists.

2. Application to This Case LPIHGC repeatedly cites to the following excerpt from Daiichi: [t]he mere fact of a prio r rel ation ship is no t in and o f

itsel f suf ficie nt to disq ualif y arb itrat ors. The relat ionsh ip be tweenthe arbit ratorand the p arty’ s princ ipal must be so inti mate– perso nally , soc ially , profe ssion ally, or f inanc ially—as t o cas t ser ious doubt on the a rbitr ator’ s imp artia lity. If a ll ar bitra tors’ relat ionsh ips c ame i nto q uesti on, f indin g qua lifie d arbit rator s wou ld be a di fficu lt, s ometi mes i mposs ible, task. 

### (quoting 103 Hawai # i at 342, 82 P.3d at 428 (alteration in original) (quoting Washburn, 895 F. Supp. at 399)). This principle is, however, inapplicable to this case as Daiichi addressed non-neutral arbitrators under a statutory scheme that contained no explicit disclosure requirements. Although non-neutral arbitrators are now held to the same standard of disclosure as neutral arbitrators, vacatur for evident partiality under HRS § 658A-23(a)(2)(C) applies only when a neutral arbitrator fails to make the required disclosures. 2 5

25 Accor ding to th e Commenta ry to UAA Secti on 12 , “[a ] par tyappoi nted, non- neutr al ar bitra tor’s fail ure t o dis close woul d be cover ed un der the c orrup tion and m iscon duct provi sions of S ectio n 23( a)(2) beca use i n mos t cases it i s pre sumedthat a pa rty a rbitr ator is in tende d to be pa rtial to t he side whichappo intedthat pers on.” Comm entar y, su pra, at 49
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### Thus, upon remand, Nordic bears the burden of proving evident partiality, i.e., the failure to disclose facts that a reasonable person would consider likely to have affected the Arbitrator’s impartiality. We note that LPIHGC’s assertion that the ICA improperly applied the presumption under HRS § 658A-12(e) in vacating the award lacks merit. Contrary to LIPHGC’s assertion, the ICA’s Memorandum Opinion expressly states that “[t]his presumption . . . does not apply where the failure to make required disclosures concerns the arbitrator’s relationship to a party’s counsel.” Nordic, mem. op. at 10 n.4 (citing HRS §§ 658A-12(d), 658A23(a)(2)(A)).
E. Timeliness and Waiver of Objections 1. In General As noted earlier, HRS § 658A-12(d) provides “[i]f the arbitrator did not disclose a fact as required by subsection (a) or (b), upon timely objection by a party, the court under section 658A-23(a)(2) may vacate an award.” In addition, a party who has actual or constructive knowledge of a relationship of the arbitrator requiring disclosure but “fails to raise a claim of partiality . . . prior to or during the arbitration proceeding is deemed to have waived the right to challenge the decision based on ‘evident partiality.’” Daiichi, 103 Hawai # i at 345-46, 82

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### P.3d at 431-32 (“In the arbitration context, waiver has been defined as consisting of knowledge, actual or constructive, in the complaining party of the tainted relationship or interest of the arbitrator and the failure to act on that knowledge.”) (internal quotations and citations omitted). As noted in Daiichi at footnote 17, “the question [of] whether a valid waiver exists is generally a question of fact, [however] ‘when the facts are undisputed it may become a question of law.’” 103 Hawai # i at 346 n.17, 82 P.3d at 432 n.17 (quoting Hawaiian Homes Comm’n v. Bush, 43 Haw. 281, 286 (Terr. 1959)).

2. Application to This Case To determine whether the initial disclosure put the parties on notice of the relationships, the ICA analyzed the Arbitrator’s use of the present perfect tense in his disclosure, in which he stated, “[s]ince retirement, I have served as a neutral for counsel and members of their law firms[,]” and found that it referred only to “engagements completed in the past.” Nordic, mem. op. at 17. The ICA also found the following:

[W]hi le [t he Ar bitra tor’s ] ini tial discl osure prov ided some notic e of his r ole a s a n eutra l arb itrat or incase s invol ving the p artie s’ co unsel , it faile d to make any refer ence, or p rovid e anynoti ce, o f his role as a trus tee of th e QLT and Carls mith Ball’ s rep resen tatio n of the Q LT. Thus, unli ke th e iss ue of[the Arbi trato r’s] work as an arbit ratorin u nrela ted a rbitr ation s inv olvin g the Carl smith Ball and S tarn O’Too le fi rms, the i ssue of [t he Arbit rator ’s] r ole a s a t ruste e of the Q LT an d Car lsmit h Ball’ s rep resen tatio n of the Q LT wa s not rais ed at all in [the Arbit rator ’s] i nitia l dis closu re. 

### LPIHGC argued, however, that the Arbitrator’s initial
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### disclosure (“Since retirement, I have served as a neutral . . . .”) “is in present-perfect tense[]” and “denotes that the Arbitrator’s work as a neutral began in the past, continued thereafter, and may still be continuing.” (emphasis omitted). The ICA concluded that “[t]o the extent that there is no showing that Nordic was aware of [the Arbitrator’s] contemporaneous work as a neutral with Carlsmith Ball and Starn O’Toole prior to issuance of the Award, Nordic has not waived its right to claim evident partiality.” Nordic, mem. op. at 17. The meaning of the initial disclosure is a disputed question of fact that can be addressed by the circuit court on remand if appropriate. In addition, this court has recognized that “[a] respectable number of federal jurisdictions have invoked the waiver principle under circumstances in which the complaining party knew or should have known of the potential partiality of an arbitrator but failed to raise an objection to the arbitrator’s appointment prior to the arbitration decision.” 103 Hawai # i at 346, 82 P.3d at 432 (citing cases from the 1st, 2nd, 3rd, and 8th circuits). In addition, courts do not endorse the “wait and see approach.”
103 Hawai # i at 348, 82 P.3d at 434 (citing Hobet Mining, Inc. v. Int’l Union, United Mine Workers of Am., 877 F. Supp. 1011, 1019 (S.D.W.Va. 1994) (“[W]here information about an arbitrator is not known in advance, but could have been ascertained by more

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### thorough inquiry or investigation, a post-award challenge suggests that nondisclosure is being raised merely as a ‘tactical response to having lost the arbitration’ or an inappropriate attempt to seek a ‘second bite at the apple’ because of dissatisfaction with the outcome.”) (citations omitted)). Nordic never responded to LPIHGC’s questions regarding when its representatives or its attorneys discovered Carlsmith Ball’s representation of the Arbitrator as trustee of the QLT. Notably, only Oshiro’s declaration asserting lack of knowledge was submitted with Nordic’s motion to vacate; declarations were not submitted by Nordic’s other counsel in the arbitration hearings. Due to the lack of an evidentiary hearing, there are no findings regarding the actual or constructive knowledge of Nordic’s representatives or counsel, including when Nordic’s representatives or other counsel actually discovered the Arbitrator’s position as a trustee of the QLT, and Carlsmith Ball’s representation of him in that capacity, assuming the Arbitrator’s duty of reasonable inquiry required disclosure of such facts, as discussed previously. There are also no findings as to when Nordic or its other attorneys learned of the Arbitrator’s additional retention as a neutral by other attorneys in LPIHGC’s counsel’s law firms. Therefore, on remand, if necessary, the circuit court can determine the sufficiency of the

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### initial disclosure, Nordic’s actual or constructive knowledge, and the timeliness of Nordic’s objection to determine whether Nordic waived its right to claim evident partiality.
F. Circuit Court Discretion Under HRS § 658A-12(d) 1. In General Finally, HRS § 658A-12(d) provides that “(i)f the arbitrator did not disclose a fact as required by subsection (a) or (b), upon timely objection by a party, the court under section 658A-23(a)(2) may vacate an award.” As noted by the Commentary to UAA Section 12(d), “[c]ourts also are given wider latitude in deciding whether to vacate an award under Section 12(c) and [ 2 6 ] 

### (d) that is permissive in nature (an award “may” be vacated) rather than Section 23(a) which is mandatory (a court “shall” vacate an award).” Commentary, supra, at 50.

2. Application to This Case Nordic brought its motion to vacate under HRS § 658A-23(a), citing its mandatory “shall vacate an award” language. If the circuit court reaches this point of the analysis on remand, it has discretion under HRS § 658A-12(d) to decide whether or not to grant the motion to vacate. Any such ruling of the circuit court

26 HRS § 658A -12(c ) pro vides : If anarbi trato r dis close s a f act r equir ed bysubs ectio n (a) or (b ) to be di sclos ed an d a p arty timel y obj ects to th e appoi ntmen t or conti nued servi ce ofthe arbit ratorbase d upon the f act d isclo sed, the o bject ion m ay be a gr ound under secti on 65 8A-23 (a)(2 ) forvaca ting an aw ard m ade b y the arbit rator . 60*** FOR PUBLICATION IN WE ST’S HAWAI # I REPORTS AND PACIFI C REPORTER *** 

### under HRS 658A-12(d) will be reviewed under an abuse of discretion standard.
IV. Conclusion This court stated in Daiichi:

It is gene rallycons idere d tha t par ties resor t to arbit ratio n to settl e dis putes more expe ditio usly and inexp ensiv ely t han b y a c ourt actio n; an d als o tha t the objec tive is to have disp utes consi deredby a rbitr ators , who are f amili ar wi th th e pro blem, in a less form al an d comba tive envir onmen t. T hus, it mu st be deem ed th at th e prima ry pu rpose of a rbitr ationis t o avo id li tigat ion. 

### 103 Hawai # i at 339, 82 P.3d at 425 (quoting Mars Constructors, Inc., 51 Haw. at 334, 460 P.2d at 318-19). As further noted in Daiichi,

The a rbitr ationproc ess f uncti ons b est w hen a n ami cable and trust ing a tmosp here is pr eserv ed an d the re is volu ntary compl iance withthe decre e, wi thout needfor judic ial enfor cemen t. T his e nd is best serv ed byesta blish ing a n atmos phere of f rankn ess a t the outs et, t hroug h dis closu re by the a rbitr ator of an y fin ancia l tra nsact ions whichhe h as had o r is negot iatin g wit h eit her o f the part ies. In m any cases the arbit ratormigh t bel ieve the b usine ss re latio nship to be so i nsubs tanti al th at to make a po int o f rev ealin g it wouldsugg est h e is indee d eas ily s wayed , andperh aps a parti san o f tha t par ty. But i f the law requi res t he discl osure , no such imput ationcan arise . Andit i s far bette r tha t the rela tions hip b e dis close d at the o utset , when the p artie s are free to r eject the arbit ratoror a ccept him w ith k nowle dge o f the rela tions hip a nd co ntinu ing f aith in hi s obj ectiv ity, than to ha ve th e rel ation ship come to light afte r the arbi trati on, w hen a susp iciou s or disgr untle d par ty ca n sei ze onit a s a p retex t for inval idati ng th e awa rd. 

### 103 Hawai # i at 341, 82 P.3d at 427 (quoting Commonwealth Coatings, 393 U.S. at 150-52 (White, J., concurring)). HRS chapter 658A now imposes clear standards for disclosure. Prompt and continuous disclosures, whether or not required, will better serve the efficiency goals of arbitration by helping to

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### avoid motions to vacate and lengthy judicial review, as in this

case. In the instant case, however, it is for the circuit court as factfinder, not an appellate court, to determine whether reasonable inquiry and disclosure standards were met, and if not, whether the Arbitration Award should be vacated for this or any other reason alleged. Although entry of findings of fact and conclusions of law are not required on all motions to vacate as long as the circuit court’s reasoning is clearly stated on the record, due to the numerous issues in this case, to allow appropriate appellate review, the circuit court is to conduct an evidentiary hearing and render findings of fact and conclusions of law. Accordingly, we vacate the ICA’s Judgment on Appeal and remand to the circuit court for further proceedings consistent with this opinion. Terence J. O’Toole, /s/ Paula A. Nakayama Judith Ann Pavey, and John P. Manaut /s/ Sabrina S. McKenna for petitioner /s/ Richard W. Pollack Kenneth R. Kupchak, Anna H. Oshiro, /s/ Steven S. Alm Robert H. Thomas, and Mark M. Murakami /s/ Karl K. Sakamoto for respondent

62