Arbitrator's bias

Citation

Waterson, G. and Lee, R. (2000), "Arbitrator's bias", Property Management, Vol. 18 No. 5. https://doi.org/10.1108/pm.2000.11318eab.005

Arbitrator's bias

Arbitrator's bias

In AT&T Corporation v. Saudi Cable Co. (2000), The Times, 23 May, the Court of Appeal was asked to consider the test for apparent or unconscious bias in an arbitrator conducting an international arbitration governed by English law.

It is a basic rule of natural justice that "no man can be a judge in his own case". AT&T did not allege that the arbitrator in this case was actually biased. It alleged that there was an appearance of bias or at least a risk that he was unconsciously biased against them by virtue of his being a non-executive director of a business rival of AT&T, Nortel of Canada, which had unsuccessfully bid for the same contract with Saudi Cable that was eventually awarded to AT&T. Thus, the important question for the court to answer was: what is the test for unconscious bias?

In R v. Sussex Justices ex parte McCarthy (1924) LB 256 Lord Hewart CJ stated "It is not merely of some importance but it is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done". The approach of Lord Hewart is usually referred to as the "reasonable apprehension of bias" or the "reasonable appearance of bias" test. However, in R v. Gough (1993) AC 646, R v. Inner West London Coroner ex parte Dallaglio and R v. Bow Street Metropolitan Stipendiary Magistrate ex parte Pinochet (No. 2) (2000) 1 AC 119, the House of Lords held that the correct test was whether there was a "real danger of bias". This test has not been popular with other common law jurisdictions such as Scotland, Australia and South Africa which have all preferred the "reasonable apprehension of bias" test.

AT&T argued that the test in Gough was not strictly binding on an arbitrator conducting an arbitration. This was rejected by their Lordships. As Lord Woolf MR stated, even if one accepted that the "reasonable suspicion" test provides a lower standard than the "real danger" test, it would be surprising if the lower standard applied to arbitration rather than to a court. The courts are responsible for the provision of public justice and therefore if there are two standards one would expect the lower to apply to the courts of law rather than to a private tribunal whose judges are selected by the parties themselves.

The House of Lords followed its own ruling in R v. Gough, stating that when considering whether bias had been established the court personified the "reasonable man" and considered whether there was any real danger of unconscious bias on the part of the decision maker. In this case his Lordship considered that the judge had been entitled to come to the decision which he did. The appeal was dismissed.

Geoffrey WatersonRosalind Lee

The law is stated as it is understood to be up to 1 August 2000.