AT&T Corporation & Anor v Saudi Cable Company

English law applies the real danger test to allegations of apparent or unconscious bias against arbitrators, as it does to judges and other decision-makers. The court assesses all relevant circumstances objectively and asks whether there was a real possibility that the decision-maker might have unfairly favoured or disadvantaged a party. Automatic disqualification requires a direct pecuniary interest or a sufficiently close connection amounting to acting as judge in one’s own cause. An arbitrator’s failure to comply with an arbitration agreement may constitute misconduct under section 23 of the Arbitration Act 1950, even without blameworthy conduct, but removal or setting aside remains discretionary. Inadvertent non-disclosure, without bias, breach of confidence or demonstrated disadvantage, did not justify intervention.

AT&T Corporation and Lucent Technologies Inc appealed from Longmore J’s dismissal of their application to remove Mr Fortier QC as chairman of an ICC arbitral tribunal and set aside three partial awards. The arbitration arose from a pre-bid agreement concerning cable supplies for a Saudi telecommunications project. Mr Fortier was a non-executive director of Nortel, a competitor of AT&T and an unsuccessful bidder for the project, but that connection was omitted from his curriculum vitae through secretarial error. The ICC rejected AT&T’s challenge without reasons. The central issues were whether Mr Fortier was disqualified for bias, whether his non-disclosure constituted misconduct, and whether the ICC Rules’ finality provision excluded court supervision.

Longmore J dismissed the application on the basis that there was no real danger of bias. The Court of Appeal considered both bias and misconduct.

1. Appeal dismissed. The Court of Appeal upheld the refusal to remove Mr Fortier or set aside the partial awards.
2. The applicable test for apparent or unconscious bias in an arbitrator is the same real danger test laid down in [1993] AC 646. The court must determine the relevant circumstances from the evidence and ask objectively whether there was a real danger that the arbitrator might unfairly regard a party’s case with favour or disfavour. The test applies equally to international arbitration governed by English law.
3. There was no automatic disqualification. Nortel was not a party to the arbitration, Mr Fortier had no material direct or indirect pecuniary interest in the outcome, and his non-executive role was limited. The court was entitled to conclude that there was no real danger of bias, having regard to his professional experience, lack of knowledge of the relevant projects before the arbitration, the minimal benefit to Nortel, his limited involvement with Nortel and his conduct during the arbitration.
4. Under section 23 of the Arbitration Act 1950, misconduct may include a procedural mishap and need not involve culpable or blameworthy conduct. Non-compliance with an express or implied term of the arbitration agreement may therefore amount to misconduct. The obligation to disclose under Article 2.7 of the ICC Rules was continuing.
5. The ICC Rules’ provision making an ICC decision on a challenge final did not exclude the English court’s jurisdiction under section 23. The court retained power to determine whether the Rules had been breached, although it would pay close attention to any reasoned interpretation by the ICC.
6. The majority held that Article 2.7 concerned independence, principally meaning absence of a connection or interest capable of leading the arbitrator to favour a party. It did not itself address confidentiality. Any disclosure of confidential information to a competitor would be misconduct on a different basis, namely breach of the arbitrator’s duty of confidence. On the facts, no such breach or substantial risk was shown.
7. Even if the omission from the statement of independence amounted to a procedural mishap, removal and setting aside were discretionary remedies. The inadvertent omission, absence of bias, absence of demonstrated disadvantage and advanced stage of the arbitration made intervention unjustified.

• Court of Appeal (Civil Division): Appeal from the order of Longmore J dated 29 October 1999 dismissed.
• Queen’s Bench Division, Commercial Court: Longmore J dismissed AT&T’s application to remove Mr Fortier and set aside the partial awards, with costs, and granted permission to appeal.