Dadoun v Biton

For an arbitral challenge based on apparent bias, the applicant must establish a serious irregularity causing, or likely to cause, substantial injustice. The common-law test is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias.

Non-disclosure is a factor in that assessment, but it cannot by itself establish apparent bias where the undisclosed matter was not itself probative of bias. A brief administrative enquiry about when an award will be delivered is not improper. Failure to disclose correspondence recording such an enquiry may be regrettable, but does not establish apparent bias where it resulted from administrative failure and there was no sinister context.

The claimant appealed under section 68 of the Arbitration Act 1996 against an award made by the Beth Din of the Federation of Synagogues. The appeal alleged apparent bias by the head of the Beth Din arising from a private discussion with the defendant’s brother and the subsequent non-disclosure of that discussion and related letters.

The claimant contended that the discussion must have concerned the merits of the arbitration. The court also considered whether, assuming the discussion was limited to the timing of the award, non-disclosure could establish apparent bias. A separate appeal under section 69 of the Act was stayed and was not determined.

1. Challenge under section 68. Section 68 permits a challenge for serious irregularity affecting the tribunal, proceedings or award. The irregularity must have caused, or be likely to cause, substantial injustice. Apparent bias would breach the tribunal’s general duty under section 33 and would constitute such an irregularity. A finding of apparent bias will ordinarily satisfy the substantial-injustice requirement.
2. Test for apparent bias. The applicable test, including in arbitration, is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. The observer is neither unduly suspicious nor complacent.
3. Non-disclosure. Non-disclosure is relevant to the assessment of apparent bias, but is not independently sufficient. Something more is required before non-disclosure can support a finding of apparent bias.
4. Application. The court accepted the evidence that the discussion between Dayan Lichtenstein and Rabbi Biton concerned only the timing of the award. An enquiry by one party about when an award or judgment will be available is not improper and is not evidence of apparent bias. Non-disclosure of an insignificant conversation could not itself create doubts about impartiality.
5. The failure to disclose the letters was regrettable, particularly in relation to the letter of 23 July 2013, but was attributable to administrative failure rather than concealment. It did not provide evidence supporting apparent bias. The section 68 challenge was dismissed. The section 69 appeal remained stayed, subject to agreement or further directions.

• Beth Din of the Federation of Synagogues: arbitral award dated 4 April 2014, largely finding for the defendant.
• High Court (Chancery Division): the section 68 challenge to the award was dismissed. The section 69 appeal remained stayed.