Hill Dickinson<\/strong><\/a> \u2013 \u2013\u00a0Iain Sharp<\/a>,\u00a0Bhieman Anandakumar<\/a>\u00a0and\u00a0Reema Shour<\/a><\/p>\n\n\n\n United Kingdom \/ March 11 2024<\/p>\n\n\n\n In most cases where a party to an arbitration seeks to have an arbitrator removed on the grounds that there are justifiable doubts as to their impartiality, the allegation is usually that the arbitrator has demonstrated apparent, not actual, bias.<\/p>\n\n\n\n The applicable test, an objective one, was laid down by the\u00a0Supreme Court in Halliburton -v- Chubb<\/em>\u00a0[2021] AC 1083 and is whether a fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.<\/p>\n\n\n\n In this case, the English Commercial Court removed a sole arbitrator under s.24 of the Arbitration Act 1996 (the Act). The Court found that there could be no reasonable objection to the fact that the sole arbitrator knew a number of the factual witnesses and all three of the expert witnesses on one side. That was to be expected in a relatively small and specialist industry. However, the Court agreed that there was an appearance of bias, based on the arbitrator\u2019s remarks about the parties\u2019 expert witnesses generally, and in particular the remarks made towards the assured\u2019s experts, which suggested that the arbitrator did not have an open mind on one of the central issues in dispute.<\/p>\n\n\n\n The background facts<\/strong><\/p>\n\n\n\n This was an arbitration relating to a claim under a policy of film production insurance issued by the claimant insurer in connection with the filming of a television series. A serious injury on set was sustained by the lead actor and filming in Sweden was delayed. The assured (a film company and film production guarantor) sought to claim the associated expenses of about \u00a33 million under the policy. The insurer denied the claim, contending it was excluded under the policy because the injury arose out of a hazardous activity and\/or there was a breach of condition due to a failure to exercise due diligence.<\/p>\n\n\n\n The policy was governed by English law and provided for London arbitration by a sole arbitrator who was to be \u2018an experienced practitioner in film or television programme production, as appropriate.\u2019 If agreement could not be reached on a suitable arbitrator, one would be chosen by the chairperson or president of the relevant film or television production industry body.<\/p>\n\n\n\n There was an initial difference of opinion between the parties as to whether to appoint a lawyer with media production experience, senior counsel with experience of acting as an arbitrator in media disputes, or a non-lawyer with expertise of the film and media industry.<\/p>\n\n\n\n The assured\u2019s solicitors then nominated five candidates for sole arbitrator. The arbitrator (W) was one of the candidates. His expertise was stated to be in film or television programme production. The insurer was also expressly told that the arbitrator did not have experience sitting as an arbitrator, having only been involved in three arbitration proceedings, presumably as a witness.<\/p>\n\n\n\n The parties could still not agree on choice of arbitrator, so the British Film Institute was asked to step in and it appointed W as the arbitrator. The parties then agreed the arbitrator\u2019s terms of reference and also expressly confirmed that they waived any objection to his appointment on the grounds of potential conflict of interest and\/or lack of independence or impartiality in respect of any matters known to them at the date of the agreement.<\/p>\n\n\n\n The arbitration<\/strong><\/p>\n\n\n\n A central issue was whether, according to Swedish market practice, the stunt coordinator or the assured had ultimate responsibility for safety on set. Both parties submitted a number of expert reports. The assured had three experts, who disclosed the extent of their relationship with the arbitrator in witness statements at the time of a first procedural hearing. At that stage, the insurer did not request any further details of these relationships.<\/p>\n\n\n\n At the second procedural hearing, however, an oral exchange was said to have taken place whereby the arbitrator essentially indicated that he did not need to hear the evidence of the assured\u2019s expert witnesses or to hear their cross-examination because he knew them very well, they were exceptional in their fields, they were the best and he knew what they would be saying. He added that he did not know the insurer\u2019s expert witnesses and he did not think their underwriter expert added much. He later also stated that while he would reserve judgment, he knew the professionals involved very well and already knew what he thought.<\/p>\n\n\n\n The arbitrator further expressed the view that it was inappropriate for the insurer to call a particular witness who had been brought in to investigate the cause of the accident because that witness had originally been retained on behalf of the assured but was now working for the insurer. The Court said that he did so because he was\u00a0\u201cunfortunately egged on by the insured\u2019s representative\u201d<\/em>\u00a0and that this showed the arbitrator\u2019s inexperience.<\/p>\n\n\n\n The insurer subsequently sought further information as to the arbitrator\u2019s relationship with the assured\u2019s experts and also the factual witnesses. One of the factual witnesses stated that the relationship was\u00a0\u201cexactly what one would expect from two senior professionals working within a relatively tight-knit industry.\u201d<\/em><\/p>\n\n\n\n The challenge<\/strong><\/p>\n\n\n\n The insurer sought an order under s.24(1)(a) of the Act to have the arbitrator removed on the ground that there were justifiable doubts about the arbitrator\u2019s ability to assess the witness evidence impartially. Specifically, the arbitrator\u2019s statements concerning his knowledge of the insured\u2019s factual and expert witnesses gave rise to an apprehension that he had predetermined favourable views of those witnesses and predetermined negative views of the insurer\u2019s witnesses.<\/p>\n\n\n\n The Commercial Court decision<\/strong><\/p>\n\n\n\n The Court clarified that the test for disqualification for apparent bias was not discretionary. Either there was a real possibility of bias or there was not. If there was any doubt, the doubt should be resolved in favour of recusal.<\/p>\n\n\n\n The Court also highlighted that the context of the industry in which the appointment took place was relevant. Specifically:<\/p>\n\n\n\n If there was a real possibility that extraneous factors had played a part in the arbitrator\u2019s decision, by the arbitrator taking into account something that should not legitimately be part of the decision-making process at all, then the fair minded and informed observer would consider that there was a real possibility of bias.<\/p>\n\n\n\n The Court did not think that there were any justifiable doubts as to the arbitrator\u2019s impartiality based on his professional relationships with the various factual and expert witnesses. Such commercial dealings were to be expected, and the parties must be taken to have had this in mind when they entered into the arbitration agreement. Furthermore, the remarks he made about an expert witness \u2018switching sides\u2019 were unfortunate but did not reasonably indicate bias.<\/p>\n\n\n\n However, the arbitrator\u2019s comments about knowing the assured\u2019s expert witnesses very well and not needing to hear them being cross-examined, coupled with his observation that he did not know the insurer\u2019s expert witnesses would have looked to the fair-minded observer as though the arbitrator was saying that he would accept the assured\u2019s expert evidence at face value, because he knew the experts and he thought they were exceptional people in their fields. He was thereby pre-judging the merits of the dispute. The fact that the arbitrator ultimately reluctantly agreed that they could be cross-examined would not assuage the concern that after cross examination he would still be materially influenced (in their favour) by this extraneous consideration.<\/p>\n\n\n\n This was not a case where the arbitrator was merely expressing a predisposition towards a particular outcome, giving the parties an opportunity to persuade him that his initial assessment was wrong. Rather, it was a case where the arbitrator gave the firm impression of having already allowed extraneous factors to influence his assessment of evidence which he had not yet heard and, moreover, of not even realising that that was an unfair approach to adopt. The arbitrator\u2019s conduct gave rise to a real possibility of bias and that the arbitrator had pre-judged the merits of the dispute.<\/p>\n\n\n\n The arbitrator\u2019s duty is to determine the dispute fairly and impartially, and the Court found that the arbitrator\u2019s observations concerning the way he would assess the expert evidence fell well short of compliance with that duty. The arbitrator should, therefore, be removed pursuant to s.24(1) of the Act.<\/p>\n\n\n\n Comment<\/strong><\/p>\n\n\n\n This was perhaps an unfortunate case of having an inexperienced arbitrator being appointed by default. The Court emphasised that it was the first time the arbitrator had been appointed as arbitrator and had never held himself out as having a long-established reputation as an arbitrator. He had not been appointed to an arbitral body or panel and this arbitration was effectively a \u2018one-off\u2019. Accordingly, there was no public interest in revealing his identity.<\/p>\n\n\n\n Nonetheless, it does highlight the importance of choosing the right arbitrator, particularly where he will act as sole arbitrator. Parties should carefully consider the terms of any arbitration agreement including the number of arbitrators, characteristics and mechanics for appointment of the tribunal.<\/p>\n","protected":false},"excerpt":{"rendered":" Treading a fine line H1 & another -v- W & others [2024] EWHC 382 (Comm) Hill Dickinson \u2013 \u2013\u00a0Iain Sharp,\u00a0Bhieman Anandakumar\u00a0and\u00a0Reema Shour United Kingdom \/ March 11 2024 In most cases where a party to an arbitration seeks to have an arbitrator removed on the grounds that there are justifiable […]<\/p>\n","protected":false},"author":1,"featured_media":2122,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":false,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-2120","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trainings","col-lg-4 col-md-6"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/blog.nicarb.org\/wp-content\/uploads\/2024\/03\/bias.jpeg?fit=323%2C156&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pcb80P-yc","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/2120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/comments?post=2120"}],"version-history":[{"count":1,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/2120\/revisions"}],"predecessor-version":[{"id":2125,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/posts\/2120\/revisions\/2125"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/media\/2122"}],"wp:attachment":[{"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/media?parent=2120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/categories?post=2120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.nicarb.org\/index.php\/wp-json\/wp\/v2\/tags?post=2120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n