Arbitration Ruling Is Vacated over Lack of Disclosure

The U.S. Court of Appeals for the Ninth Circuit upheld the vacating of an arbitrator's ruling in a film-industry dispute, due to the arbitrator's 'evident partiality.' New Regency Productions Inc. v. Nippon Herald Films Inc., 05-55224. ('Evident partiality' is based on an arbitrator's lack of disclosure of his or her dealings that could result in potential bias in the arbitration.) Entertainment attorney William Immerman had ruled as arbitrator that producer New Regency owed Japanese distributor Nippon Herald $440,000, plus interest, for a film Nippon Herald had paid for but New Regency failed to deliver under a multi-picture deal. Immerman went on to side with New Regency in that, under a cross-collateralization provision, New Regency should receive recoupment funds, plus interest, that totaled $2.341 million. Immerman hadn't disclosed that, during the arbitration, he had taken a job as senior vice president and chief administrative officer of Yari Film Group, which was negotiating to finance and co-produce a movie being produced by Alexandra Milchan, a New Regency executive and daughter of New Regency CEO Arnon Milchan.

The appeals court noted in part: 'Immerman had a duty to investigate potential conflicts when he accepted a high-level executive position at Yari Film Group while the arbitration was ongoing ' The conflict alleged by Nippon Herald is real and nontrivial.'

The U.S. Court of Appeals for the Ninth Circuit upheld the vacating of an arbitrator's ruling in a film-industry dispute, due to the arbitrator's 'evident partiality.' New Regency Productions Inc. v. Nippon Herald Films Inc., 05-55224. ('Evident partiality' is based on an arbitrator's lack of disclosure of his or her dealings that could result in potential bias in the arbitration.) Entertainment attorney William Immerman had ruled as arbitrator that producer New Regency owed Japanese distributor Nippon Herald $440,000, plus interest, for a film Nippon Herald had paid for but New Regency failed to deliver under a multi-picture deal. Immerman went on to side with New Regency in that, under a cross-collateralization provision, New Regency should receive recoupment funds, plus interest, that totaled $2.341 million. Immerman hadn't disclosed that, during the arbitration, he had taken a job as senior vice president and chief administrative officer of Yari Film Group, which was negotiating to finance and co-produce a movie being produced by Alexandra Milchan, a New Regency executive and daughter of New Regency CEO Arnon Milchan.

The appeals court noted in part: 'Immerman had a duty to investigate potential conflicts when he accepted a high-level executive position at Yari Film Group while the arbitration was ongoing ' The conflict alleged by Nippon Herald is real and nontrivial.'