H v L & Ors

For apparent bias, the question is whether the fair-minded and informed observer would conclude that there is a real possibility of bias. In London international arbitration, an arbitrator is not representative of the appointing party and may generally sit in separate arbitrations arising from the same event, even where parties or issues overlap. The arbitrator must decide each reference on the material properly before that tribunal.

A failure to disclose a circumstance which does not itself create apparent bias does not ordinarily create apparent bias by omission. An unsuccessful challenge cannot itself justify removal because the arbitrator may have been criticised or may prefer to avoid further unpleasantness. A court appointment under the Arbitration Act 1996 cannot be revoked under CPR rule 3.1(7) merely because the appointment was made using the CPR’s procedural machinery.

H applied under section 24(1)(a) of the Arbitration Act 1996 to remove M, the third arbitrator and chairman in H’s arbitration against L, and to appoint a replacement. M had subsequently accepted appointments in two related arbitrations brought by R against insurers, one involving L, arising from the same underlying incident.

H relied on M’s acceptance of the appointments, his failure to disclose them, and his responses to H’s complaint. H alternatively sought to revoke or vary the earlier order appointing M under CPR rule 3.1(7). The central issues were whether those circumstances created justifiable doubts about M’s impartiality and whether the court had jurisdiction to revisit the statutory appointment.

1. Application under section 24. The application to remove M was dismissed. The statutory question under section 24(1)(a) applied the common-law test of apparent bias: whether the fair-minded and informed observer, having considered the facts in their proper context, would conclude that there was a real possibility of bias.
2. Related appointments. M’s appointment by L in another arbitration did not confer a relevant financial benefit or make him L’s representative. Under section 33, every arbitrator is independently required to act fairly and impartially. It is a regular and desirable feature of international arbitration that the same arbitrator may sit in different references arising from one casualty or overlapping circumstances. Each tribunal must decide its reference on the material available in that reference, while preserving confidentiality and giving each party a fair opportunity to address material relied upon.
3. The factual and legal overlap between the R references and the H reference was limited. The disputes concerned different settlements, parties, liabilities and allegations. The fair-minded and informed observer would regard M’s expertise and reputation as enabling him to approach the H reference with an open mind. The fact that he was chairman did not impose a heightened or different test.
4. Non-disclosure and response. Since the appointments did not themselves create apparent bias, there was no obligation to disclose them for the purposes of section 24. Disclosure might nevertheless be prudent. Even assuming disclosure would have been preferable, M’s honest explanation and measured response did not create a real possibility of bias. A party cannot create a ground for removal by making an unsuccessful challenge and then relying on the arbitrator’s reaction to it.
5. CPR rule 3.1(7). The alternative application also failed. Flaux J’s appointment was made under the statutory power in section 18 of the Arbitration Act 1996, not under the CPR. The CPR provisions governed only the procedure by which the statutory power was invoked. Section 18(4) deemed the appointment to have been made with the parties’ agreement, and the statutory removal provisions were exhaustive. Rule 3.1(7) therefore gave no jurisdiction to revoke or vary the appointment.