Setting aside for apparent bias Brian Doctor QC Fountain Court Chambers

Classic English law test for apparent bias Whether “the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” Lord Hope in Porter v Magill [2002] AC 357 [103]

Reflected in s 24 Arbitration Act (1) A party to arbitral proceedings may …. apply to the court to remove an arbitrator on any of the following grounds – (a) that circumstances exist that give rise to justifiable doubts as to his impartiality…

Fair-minded Lord Hope in Helow v Sec of State for Home Dept [2008] 1 WLR 2416 [2]: The observer who is fair-minded is the sort of person who always reserves judgment on every point until she has seen and fully understood both sides of the argument. She is not unduly sensitive or suspicious, She knows that fairness requires that a judge must be, and must be seen to be, unbiased. She knows that judges, like anybody else, have their weaknesses. She will not shrink from the conclusion, if it can be justified objectively, that things that they have said or done or associations that they have formed may make it difficult for them to judge the case before them impartially

Informed [3]: before she takes a balanced approach to any information she is given, she will take the trouble to inform herself on all matters that are relevant, to read the text of an article as well as the headlines. She is able to put whatever she has read or seen into its overall social, political or geographical context. She is fair-minded, so she will appreciate that the context forms an important part of the material which she must consider before passing judgment.

2014 IBA Guidelines on Conflicts of Interest in International Arbitration Part 1 General Standards Regarding Impartiality, Independence, Disclosure: (2) Conflicts of interest: (a) if she has any doubt as to her ability to be impartial or independent; (b) if facts or circumstances exist.. which, from the point of view of a reasonable third person having knowledge of the relevant facts and circumstances, would give rise to justifiable doubts as to the arbitrator's impartiality or independence.

Doubts Unless the parties have accepted the arbitrator in accordance with GS 4 (3) doubts are justifiable if reasonable person, having knowledge of relevant facts, would consider it a likelihood that arbitrator may be influenced by factors other than the merits of the case as presented by the parties. (d): Justifiable doubts necessarily exist as to the arbitrator's impartiality or independence in any of the situations described in the Non-Waivable Red List

GS 3: Disclosure by Arbitrator Advance disclosure by arbitrator required: If facts or circumstances exist that may, in the eyes of the parties, give rise to doubts as to the arbitrator’s impartiality or independence, the arbitrator shall disclose such facts…

GS 4: Waiver by parties “(a) If, within 30 days after the receipt of any disclosure by the arbitrator, or after a party otherwise learns of facts or circumstances that could constitute a potential conflict of interest for an arbitrator, a party does not raise an express objection with regard to that arbitrator, subject to paragraphs (b) and (c) of this General Standard, the party is deemed to have waived any potential conflict of interest in respect of the arbitrator based on such facts or circumstances and may not raise any objection based on such facts or circumstances at a later stage.

Part II: Practical Application of the General Standards Non-Exhaustive Application Lists Waivable and Non-waivable red list: circumstances giving rise to justifiable doubts re arbitrator’s impartiality. Non-waivable read list: includes situations deriving from overriding principle that no person can be his or her own judge. Waivable Red list: situations that are serious but not as severe; Waivable but only if parties, with full knowledge of the conflict, expressly agree

Lists cont. Orange list: depending on the facts, may, in the eyes of the parties, give rise to doubts as to arbitrators impartiality or independence. Green list: no appearance and no actual conflict of interest exists from an objective point of view No duty to disclose situations falling within Green list

Non-waivable red list GS (3)(b) However, if facts or circumstances exist as described in the Non-Waivable Red List, any waiver by a party (including any declaration or advance waiver, such as that contemplated in General Standard 3(b)), or any agreement by the parties to have such a person serve as arbitrator, shall be regarded as invalid.

English Courts willing to give effect to IBA Guidance Sierra Fishing Co v Farran [2015] EWHC 140 (Comm) GS 6: arbitrator is in principle considered to bear the identity of her law firm. Depends on the circumstances: not all dealings automatically give rise to conflict

Facts which met the test Farran [56]: Real possibility that law firm, in which the arbitrator had a financial interest, has through his father (a partner in the firm) been instructed by the Respondent (Dr Farran), and that it acts for the bank of which Dr Farran is chairman.

Farran Followed IBA Guidelines: held the facts fell within para 1.4, 2,3.1 and Also held relevant that arbitrator said it was not for him to do due diligence on his connections with party. Court held it was, and recognised duty in GP 3 Also, his refusal to postpone award and “content and tone” of his communications

Cofely Ltd v Bingham [2016] EWHC 240 (Comm) Arbitrator was a favourite of a firm of claims consultants: over the past 3 years, 18% of his appointments and 25% of his income as arbitrator/ adjudicator came from that firm. Claims consultants fell out with their employer/client, and sued them for fees. Discovered firm negatively influenced choice by falsely stating most others had a conflicts of interest.

Cofely Arbitrator dealt with the matter in a high- handed way, and refused to disclose information about his appointments Even though only 3 of the 25 cases involved the claims consultants as a party, held that was sufficient to trigger disclosure under the Orange List [3.1.3: appointed in past 3 years by party on 2 or more occasions] [109]

W Limited v M SDN BHD [2016] EWHC 422 (Comm)] Canadian sole arbitrator made two awards Partner in a law firm but worked almost exclusively as an arbitrator with little or no involvement in the running or decision-making of the firm. The firm had provided substantial legal services in the past to company “Q”, and derived significant income

W Limited Respondent was a subsidiary of “P” company. During 2012, “Q” was purchased by “P” so “Q” became an affiliate of Respondent. Arbitrator appointed in 2012, shortly before take-over. He did not disclose. He did not know, even though it was widely publicised. He would have disclosed if he had known

W Limited Knowles J held no apparent bias on the facts. But clearly fell within non-waivable red list para 1.4: “The arbitrator or his or her firm regularly advises the party, or an affiliate of the party, and the arbitrator or his or her firm derives significant financial income therefrom.” Affiliate includes all companies in a group

W Limited Judge critical of the inclusion of this in a non- waivable list. “The situation is classically appropriate for a case-specific judgment.” [36] Critical of GS (2)(d) which states that justifiable doubts “necessarily exist” in examples in this list. GS (6)(a) relationship of arbitrator with the law firm “should be considered in each individual case”; activities with party or its affiliates “shall not necessarily” constitute source of conflict[39]

W Limited Nevertheless Para 1 of Part II says “in all cases” General Standards “should control the outcome”. Pointed out that some situations in Waivable red list potentially more serious: – Necessary for court to explain why IBA Guidelines not correct, not just ignore them

ICC Note to Parties and Arbitral Tribunals on Conduct of Arbitration Issued 22 February 2016 Paras 15 – 26 deal with disclosure needed to ensure arbitrators act “in an impartial and independent manner” [18] any circumstance calling into question her independence in the eyes of any party or give rise to reasonable doubts as to her impartiality

ICC Note [20] arbitrators should “pay attention” to the following [not limited] circumstances” Arbitrator or her law firm represents or advises or has represented or advised, one of the parties or one of its affiliates” Acts or Acted against Business relationship Previously been appointed arb by a party or affiliate, or by counsel to party or counsel’s law firm

ICC Note [24] for disclosure: arbitrator will be considered as bearing the identity of her law firm. Court will consider activities and relationship in each individual case Arbitrators should in each case consider disclosing relationships with another arbitrator or counsel who is a member of the same barristers’ chambers.

IBA Guidelines and Barristers chambers IBA Guidelines recognise that they “should not be equated with law firms for the purposes of conflicts” but disclosure may be warranted in view of the relationships between barristers, parties or counsel [GS 3(6)(a)]