Commercial Arbitration Panel Chairman Cleared of ‘Apparent Bias’ Claim


Commercial arbitrators are not Trappist monks and are likely to have extensive personal and trade contacts in their fields of expertise. The High Court made that point in rejecting claims that the highly experienced chairman of an arbitration panel gave an appearance of bias.

The case concerned a dispute between commodity traders that came before an appeal panel established by an international trade association. The panel found that the arbitration had been applied for some two years outside a 56-day time limit which applied to the matter and declined to exercise its discretion to extend time.

In challenging that decision, two trading companies asserted that there were a number of circumstances which gave rise to justifiable doubts as to the panel chairman’s impartiality. On grounds of apparent bias, it sought to remove him from the chair and have the matter reconsidered by a freshly constituted panel.

Ruling on the case, the Court noted that the chairman had over 30 years’ experience as a commodities trader and more than 20 years as an arbitrator. The companies’ opponent in the arbitration was a member of the association, whilst the companies were not. The opponent’s CEO and the chairman both served on the association’s ruling council and they had known each other for around 15 to 20 years.

Although they had never sat on the same committees, they had seen each other at meetings, industry social events, workshops and council meetings. However, the Court found that their acquaintance was a professional one, formed through their work. They were not friends and did not know each other well.

Dismissing the companies’ application, the Court noted that trade associations commonly draw on their members when appointing arbitrators. This has the twin advantage of bringing their members’ particular expertise to the table and greatly reducing the costs of arbitration. It is to be expected that such members are likely to know, or at least know about, others involved in the relevant market.

The Court found that none of the circumstances relied on by the companies would or might reasonably give rise to an appearance of bias on the chairman’s part. There was no serious irregularity in the relevant arbitration process, nor had the companies suffered a substantial injustice. There was, the Court found, no reason to believe that the outcome of the arbitration would have been different had the chairman not participated.

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