Stephenson Harwood for claimant, Browne Jacobson and Wheelers for defendants
The Claimant sought an order that Mr Bingham be removed as arbitrator from an ongoing arbitration between it and the second defendant ("Knowles"), pursuant to section 24(1)(a) of the Arbitration Act 1996 ("the Act"), on the ground that circumstances exist that give rise to justifiable doubts as to his impartiality. Those doubts about his impartiality are alleged to involve apparent bias, not actual bias.
Following a dispute between the parties, Knowles sought the appointment of Mr Bingham and his appointment was approved by the Chartered Institute of Arbitrators ("CIArb). No prior involvement with Knowles was mentioned by Mr Bingham on his acceptance of nomination form. Subsequently, a decision was handed down by the TCC in which it was found that a fraudulent misrepresentation had been made by an employee of Knowles in a separate appointment of Mr Bingham. Further evidence was sought and it subsequently came to light that over the last 3 years, 18% of Mr Bingham's appointments and 25% of his income as an arbitrator derived from cases involving Knowles.
Hamblen J found that a case of apparent bias had been made out.
It was held in A v B (see Weekly Update 33/11 ) that regular appointments by the same party can amount to apparent bias, particularly if it raises questions of material financial dependence. The CIArb acceptance of nomination form calls for disclosure of "any involvement, however remote" over the last 5 years and it was held that acting as an arbitrator in which Knowles was either a party or a representative of a party was a form of involvement. Even though the evidence showed that Knowles had not directly appointed the arbitrator in many of the earlier cases, it had influenced and "steered" the appointment process. In particular, the existence of Knowles' appointment "blacklist" was significant: "It means that the arbitrator/adjudicator's conduct of the reference may lead to him/her falling out of favour and being placed on that list and thereby effectively excluded from further appointments involving Knowles. That is going to be important for anyone whose appointments and income are dependent on Knowles related cases to a material extent, as is the case for Mr Bingham". Furthermore, even though only 3 out of 24 prior cases in which Mr Bingham had acted as an arbitrator involved Knowles as a party, that was sufficient to trigger disclosure under both the acceptance of nomination form and the "Orange List" included in the IBA Guidelines on Conflicts of Interest in International Arbitration (which calls for disclosure where "the arbitrator has, within the past three years, been appointed as an arbitrator on two or more occasions by one of the parties, or an affiliate of one of the parties"; or "the arbitrator currently serves, or has served within the past three years, as arbitrator in another arbitration involving one of the parties, or an affiliate of one of the parties"). Furthermore, the aggressive manner with which Mr Benjamin had dealt with the claimant's concerns meant that "cumulatively" these grounds raised a real possibility of apparent bias.