A dispute arose over a project in Iraq between a British Virgin Island claimant and a Malaysian defendant with a sole Canadian QC arbitrator. The claimant’s challenge of the arbitrator’s award was based upon bias because of the arbitrator’s purported conflict of interest. The basis of the conflict was that members of the arbitrator’s firm regularly represented the claimant’s affiliate, deriving substantial financial income from the representation. The arbitrator neither advised nor received income from the firm’s representation of the affiliate. Further, for the past dozen years or so, the arbitrator served almost solely as an international arbitrator, did not participate in partnership matters, nor really represented clients and is treated by the firm as a sole practitioner. In accepting the appointment, the arbitrator never disclosed that his firm represented the affiliate because the firm’s conflict system never disclosed the representation and he was not aware of it.
In finding that there was no possibility of bias, the court considered these facts: (i) the arbitrator was a partner in a law firm; (ii) the law firm earns a substantial amount of money from another entity that has the same corporate parent as the party in the arbitration; (iii) the party in the arbitration was not advised by the firm or the arbitrator; (iv) the arbitrator operated as a sole practitioner only using the firm for secretarial and administrative support; and (v) the arbitrator made all disclosures of which he was advised, although the firm’s conflict system had not advised him of its representation of the affiliate. The court then examined the 2014 International Bar Association Guidelines on Conflicts of Interest in International Arbitrations, pointing out that these were only guidelines and not the force of law. While the Guidelines contain a section entitled “Non-Waivable Red List” which encompassed this situation, the court took issue with them since he believed that this situation was clearly one that should be waivable. Finding that the challenge must fail, the award was confirmed. In the High Court of Justice Queen’s Bench Division Commercial Court, W Limited v. M SDN BHD, Neutral Citation Number  EWHC 422 (Comm).