V & Anor v K

In an LMAA arbitration, apparent bias is assessed objectively by asking whether the fair-minded and informed observer would conclude that there was a real possibility of bias. The assessment must take account of the arbitration’s context, including established customs and practices in the relevant market, the arbitrator’s reputation and experience, the nature and extent of professional connections, the arbitrator’s response to disclosure requests, and any tactical character of the challenge.

In the London maritime market, repeated appointments by the same specialist law firm in unrelated arbitrations ordinarily do not require disclosure absent a special feature. Defective service of an arbitration claim form will not be retrospectively validated merely because the defendant knew its contents. The claim was dismissed.

The claimants challenged an LMAA partial final award under sections 67 and 68 of the Arbitration Act 1996. They alleged that the tribunal lacked substantive jurisdiction because the arbitrators’ contracts had been repudiated and that there had been serious irregularity through apparent bias, principally arising from Mr H’s professional connections with Reed Smith and his disclosures about them.

The claimants also sought retrospective validation of defective service of the arbitration claim form under CPR 6.15(2) and CPR 3.9. The defendant applied to set aside service and challenged the extension of time previously granted for bringing the claim. The central issues were whether apparent bias or a disclosure failure had been established and whether the defective service should be validated.

1. Substantive challenges. The section 67 and section 68 challenges failed on their merits. The claimants abandoned five of the six alleged grounds of apparent bias, leaving only the allegation concerning Mr H’s disclosures.
2. Apparent bias. The applicable test was whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias. The observer was objective and detached, neither complacent nor unduly suspicious. Context was important, including the customs and practices of LMAA arbitration, the arbitrator’s professional reputation and experience, and the possibility of tactical challenges.
3. Disclosure. Mr H had no duty to disclose his previous appointments in unrelated LMAA arbitrations by Reed Smith. The established custom and practice of the London maritime market recognised repeated appointments from a relatively small pool of specialist firms and arbitrators. The LMAA Advice on Ethics supported that conclusion. Even if disclosure had been required, the information disclosed, the ambiguity of the requests, Mr H’s prompt and courteous responses, the tribunal’s fair procedural conduct, the proportion and financial significance of the appointments, and the claimants’ failure to pursue a section 24 application meant that the apparent-bias test was not met.
4. Aiteo. Aiteo Eastern E&P Co Ltd v Shell Western Supply was materially distinguishable. It concerned ICC arbitration rules containing a subjective element, a successful institutional challenge, and particularly close professional engagements during the arbitration.
5. Service. The claimants had not taken reasonable steps to serve the claim form in accordance with the rules. Knowledge of the claim form’s contents was necessary but insufficient for CPR 6.15(2). CPR 3.9 was not an alternative route to validating defective service of originating process. Relief would in any event have been refused because the default was serious, careless and unexplained by countervailing circumstances.
6. Result. Permission to amend the claim form to add the section 67 challenge was refused as the proposed challenge was unarguable. Service was not retrospectively validated, and the arbitration claim was dismissed.