Cofely Limited v Anthony Bingham and Knowles Limited  EWHC 240
The claimant, Cofely, brought an application under s 24(1)(a) of the Arbitration Act 1996 for the removal of a well-known construction arbitrator on the ground of apparent bias. Any party to arbitral proceedings may apply to remove an arbitrator if circumstances exist that give rise to justifiable doubts as to their impartiality.
Cofely appointed Knowles to advise on and progress claims against Stratford City Developments Ltd. Knowles alleged that Cofely had acted in breach of their success fee agreement. The Chartered Institute of Arbitrators appointed Mr Bingham as arbitrator and some time into his appointment (following the Eurocom Limited v Siemens Plc decision) Cofely requested information from Knowles as to the relationship between Mr Bingham and Knowles.
It was discovered that the arbitrator, a barrister and surveyor, received in the previous 3 years 19% of his appointments and 25% of his income from cases involving Knowles. This amounted to acting for them in 25 cases and out of those 25, Bingham found for Knowles or Knowles’ clients 75% of the time. An order for his removal on the ground of bias was made as the court was satisfied that there were grounds of apparent bias.
The Court said that Bingham’s lack of objectivity led to a risk of unconscious bias. Interestingly, the fact raised by Bingham that many of his appointments were not made directly by Knowles but by an appointing body was rejected as not a valid excuse. It was established that Knowles was able to influence who was appointed by putting forward certain criteria to be met by the arbitrator in terms of qualifications. This may not be the case anymore, following the Eurocom decision, unless justified grounds to suggest a conflict of interest could be made out.
- This decision builds on the previous Eurocom decision on dealings between parties to arbitrations and the arbitrator.
- As is very common in the property industry, arbitrators and independent experts often have close relationships with some of the parties and their advisors. This decision may well affect future appointments of previously appointed arbitrators/experts and potentially limit choice for parties.
- The decision also gives hope to potentially disgruntled parties that a seemingly hostile arbitrator could be removed on grounds of apparent bias.
- It also serves as a warning to parties and their advisers who seek to influence the choice of an appointment.