March 10, 2017

Arbitration - Symbion Power v Venco (High Court)

Judge warns against party-appointed arbitrator communicating only with the party which appointed him

The claimant unsuccessfully challenged an award under section 68 of the Arbitration Act 1996. Jefford J then considered whether, had she had accepted the challenge, she ought to have set aside the award (as the claimant sought), rather than have remitted it to the tribunal. The claimant argued that it would not be fair to remit in this case because, after the tribunal had been constituted, the claimant-appointed arbitrator had written a confidential email to the claimant's counsel complaining about the conduct of the chairman (who had been appointed by the two party-nominated arbitrators).

The judge rejected the argument that it would be inappropriate to remit the award after the email came to the chairman's notice. She said that although it would have created "a somewhat awkward working environment", that was something that experienced, professional people could deal with.

Although the argument was not pleaded, she went on to express her view that the email could have given rise to an appearance of bias and a breach of the arbitrator's duty to act fairly and impartially: "The party-appointed arbitrators patently do not represent the party that appointed them... Any communication by one arbitrator with one party which concerns the arbitration may give rise to concerns that that arbitrator is not acting fairly or impartially for the simple reason that it creates the impression of a close relationship between the arbitrator and the party and raises the spectre of other such communications. Requiring the communication to be kept confidential does not remedy the problem: if anything, it highlights the arbitrator's awareness that this is communication he should not be having. Whether in any individual case there is the appearance of bias will, of course, turn on its particular facts but I have no doubt that such communications between one arbitrator and one party should be avoided".