Recent University of Otago law school graduate Sarah is currently working as a Clerk with the New Zealand Dispute Resolution Centre (NZDRC)
Justice Knowles considered such an observer would have concluded that this was an arbitrator who simply did not know about the issue, rather than one whose credibility was to be doubted, and that such an observer would not conclude that there was a real possibility of bias or lack of independence or impartiality.
Despite reaching his conclusion without hesitation, Justice Knowles went on to consider the IBA Guidelines, which were of assistance, but ultimately not binding on the Court. Justice Knowles suggested two apparent weaknesses in the IBA Guidelines identified by the present case. First, that it was difficult to understand why a situation in which advice is being given to an affiliate, and the arbitrator is not involved in that advice (particularly without reference to that arbitrator’s awareness or lack of awareness of the advice) should automatically be categorised under the Non-Waivable Red List. The Court considered determining whether there is a conflict required case-specific judgment. Second, it was also suggested that should such a situation arise, and a disclosure is made by the arbitrator, it should be open to the parties themselves to consider a waiver.
The Court also considered situations categorised under the ’Waivable Red List’, which included situations where the arbitrator had given legal advice on the dispute to a party. Justice Knowles’ observed, these situations would seem potentially more serious than the circumstances of the present case; again suggesting that the circumstances of the present case do not sit well within a “Non-Waivable Red List. The Court concluded that the claimant’s challenges to the awards must fail, as examination of the IBA Guidelines did not alter Justice Knowles’ determination under English common law that there was no apparent bias and that a fair minded and informed observer, having considered the facts, would not conclude that there was a real possibility the Arbitrator was biased or lacked independence or impartiality.
Comment
This is an important decision, confirming that the English Court will not consider itself bound by the IBA Guidelines. The decision identifies potential weaknesses in the IBA Guidelines, particularly the absence of case-specific judgment in conflict situations currently categorised under the ’Non-Waivable Red List’. The decision may also give arbitrators some encouragement to consider challenging any assertion that they would automatically be conflicted out in a case falling within the ‘Non-Waivable Red List’, where they did not consider that the situation had any real impact on their actual or perceived independence or impartiality. The decision also confirms the limited ability of parties to challenge arbitration awards. Challenges on the grounds of serious irregularity and bias will likely be difficult to uphold, despite purported support by international guidelines such as the IBA Guidelines.
______________________________ 1 Porter v Magill [2002 AC 357 at [103] per Lord Hope.