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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> AT&T Corporation & Anor v Saudi Cable Company [2000] EWCA Civ 154 (15 May 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/154.html Cite as: [2000] EWCA Civ 154 |
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Case No: QBCMF 1999/1200/A3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
COMMERCIAL COURT (MR JUSTICE LONGMORE)
Royal Courts of Justice
Strand, London, WC2A 2LL
Monday 15 May 2000
(1)
AT&T CORPORATION |
Appellants | |
- and - |
||
SAUDI CABLE COMPANY |
Respondent |
38. As was pointed out in Locabail (at p.74) the Gough approach has not commanded universal approval elsewhere. In Scotland, Australia and South Africa, there has been preference for the reasonable suspicion or reasonable apprehension test, "which may be more closely in harmony with the jurisprudence of the European Court of Human Rights" (see Locabail at p.74f). While Gough is binding on courts in this jurisdiction, Sir Sydney Kentridge argues that the test laid down in Gough is not strictly binding where it is an arbitrator conducting an arbitration, particularly an international arbitration, who is involved. Sir Sydney Kentridge urges this court not to extend an approach which has been rejected in other jurisdictions in relation to arbitrators when there is no need to do so. He contends that reasonable apprehension or suspicion of bias provides a better test. He points out that the test in the new Arbitration Act of 1996, s.24, was introduced in order to conform with article 12 of the Uncitral Model Law (it omits the word "independent"). In addition, he submits that the test of "justifiable doubt" contained in section 24 of the 1996 Act is closer to the concept of "reasonable suspicion" than the "real danger" Gough test.
39. In Laker Airways Inc v FLS Aerospace Limited [1999] 2 Lloyds
Report 45 at pp.48/49, Rix J applied the Gough test in an arbitration
case. He was right to do so. Lord Goff had stated in categoric terms that the
real danger test should apply to bias on the part of arbitrators (see
p.669H-670D). He had indicated that it was desirable that that test should be
applicable to all cases of apparent bias, "whether concerned with justices or
members of other inferior tribunals, or with jurors or with arbitrators".
Lord Goff did not deal separately with international arbitrations, but there
is no principle on which it would be right in general to distinguish
international arbitrations from the other categories of situations to which
Lord Goff referred, when the arbitration is, as here, governed by English
Law.
40. Sir Sydney Kentridge's arguments for applying what he argued was a lower
threshold to arbitrations lacked conviction. Assuming, without accepting,
that the reasonable suspicion test provides a lower threshold than the real
danger test, it would be surprising if a lower threshold applied to arbitration
than applied to a court of law. The courts are responsible for the provision
of public justice. If there are two standards I would expect a lower threshold
to apply to courts of law than applies to a private tribunal whose "judges"
are selected by the parties. After all, there is an over-riding public interest
in the integrity of the administration of justice in the courts. It is justice
in the courts to which Lord Hewart CJ was referring in R v Sussex Justices,
ex parte McCarthy [1924] 1 KB 256, 259, when stating his famous aphorism,
which is accepted throughout the common law world, that it is "of fundamental
importance that justice should not only be done, but should manifestly and
undoubtedly be seen to be done".
41. The different phrases which have been used to describe the correct test
are all trying to give effect to this principle identified by Lord Hewart. This
is why the application of any of the different descriptions of the threshold
are likely, in practice, to produce the same result. The word "real" is linked
to "danger" so as to distinguish between a real and a fanciful danger. The
word "reasonable" is linked to the word "suspicion" for the same reason. In
both cases it is appreciated that there is a need to avoid quashing or
invalidating decisions when there is no reason to do so. As is apparent from
the facts of this case, where millions of dollars have already been incurred in
the costs of the arbitration and there have been three decisions, it would
achieve injustice not justice if the arbitration awards were to be set aside if
such a course were not justified. It is not to be forgotten that SCC is an
entirely innocent party and it is entitled to have its interests considered
when deciding whether to set aside the awards. In ex parte Dallaglio
Simon Brown LJ helpfully identified nine propositions which are relevant to the
application of the Gough test. In the seventh he indicated that the
court "is no longer concerned strictly with the appearance of bias but rather
with establishing the possibility there was actual although unconscious bias"
(at p.152). In the same case Sir Thomas Bingham MR, at p.162 stated that the
Gough decision shows:
"that the description `apparent bias' traditionally given to this head of bias
is not entirely apt, for if despite the appearance of bias the court is able to
examine all the relevant material and satisfy itself there was no danger of the
alleged bias having in fact caused injustice, the impugned decision will be
allowed to stand. The famous aphorism of Lord Hewart CJ .... is no longer, it
seems, good law, save of course in the case where the appearance of bias is
such as to show a real danger of bias".
42. Sir Sydney Kentridge criticised both of these statements. Mr Pollock is
more accurate when he submits that both the real danger and the reasonable
suspicion tests subsume the test laid down by Lord Hewart. Unless there is
some foundation for saying that justice has not been done, it is seen to be
done. We do not understand the statements in ex parte Dallaglio which
are criticised to be seeking to say anything different. The important point
for this appeal which Simon Brown LJ identified is that, when deciding whether
bias has been established, the court personifies the reasonable man. The court
considers on all the material which is placed before it whether there is any
real danger of unconscious bias on the part of the decision maker. This is the
case irrespective of whether it is a judge or an arbitrator who is the subject
of the allegation of bias.
43. Was there a real danger here, viewing the matter objectively, that Mr
Fortier was predisposed or prejudiced against AT&T because he was a
non-executive director of Nortel? As to this, adopting our role of
personifying the reasonable man, I consider that Longmore J was entitled to
come to the decision which he did for the reasons he gave. In coming to my
conclusion, I take into account that:
(a) Mr Fortier is an extremely experienced lawyer and arbitrator who, like a
judge, is both accustomed and who can be relied on to disregard irrelevant
considerations. In saying this we make it clear we do not attach any
importance to the fact that Mr Fortier at all times believed himself to be
acting appropriately. He must be judged by objective standards.
(b) There is no reason to reject Mr Fortier's statements in the letter of 20
September 1999 that he was entirely unaware of the TEP-8 project until December
1998 and the TEP-6 project until he became involved in the arbitration process.
Until he was aware of the projects there could, of course, be no possibility
that they could prejudice him and so no obligation to disclose his connections
with Nortel.
(c) Any benefit which could indirectly accrue to Nortel as a result of the
outcome of the arbitration would be of such minimal benefit to Mr Fortier that
it would be unreasonable to conclude that it could influence him.
(d) Mr Fortier's involvement with Nortel as a result of his non-executive
directorship was limited. It was accurately described as an incidental part of
his professional life. The role of non-executive directors can differ but the
nature of Mr Fortier's directorship is well illustrated by his letter of 20
September 1999.
(e) Mr Fortier did not attach importance to his involvement with Nortel. This
is illustrated by his readiness to resign his directorship when he was
challenged by AT&T.
(f) Mr Fortier conducted himself in the course of the arbitration in a manner
which provided no support for any suggestion that he was prejudiced and the
contrary has not been suggested.
44. It was extremely unfortunate that the mistake about the directorship meant
that it was not disclosed, but, on the evidence which is available, that
innocent non-disclosure provides the flimsiest of arguments that the indirect
interest of Mr Fortier in Nortel would or might affect the way he performed his
responsibilities as an arbitrator. I therefore reject the criticism of the
judge's decision on bias.
Misconduct
45. S.23(1) and (2) Arbitration Act 1950 provide:
(1) "Where an arbitrator or umpire has misconducted himself or the proceedings
the High Court may remove him.
(2) Where an arbitrator or umpire has misconducted himself or the
proceedings, or an arbitration or award has been improperly procured, the High
Court may set the award aside."
46. It will be noted from the terms of s.23, that the High Court is given a
discretion to remove an arbitrator and to set aside an award subject to
it being established that the arbitrator has misconducted himself or the
proceedings. Misconduct can take many forms. For there to be the necessary
misconduct to enable the court to exercise its powers under s.23, there need
not be any culpable or blameworthy behaviour on the part of the arbitrator. It
can be sufficient if there is a "procedural mishap".
47. What is relied upon here by AT&T is an asserted non-compliance by Mr
Fortier with the terms of the arbitration agreement. In particular the failure
to comply with Article 2.7 of the ICC Rules, to which we have already referred.
Non-compliance with the terms of an arbitration agreement can amount to
misconduct. (See the judgment of Diplock J in Margulies Brothers Limited v
Dafnis Thomaides & Co (UK) Limited [1958] 1 Lloyds Rep 250 at 253 where
he reiterated that "misconduct" of an arbitrator includes any failure by the
arbitrator to comply with the terms, express or implied, of the arbitration
agreement.)
48. It is arguable that s.23 refers only to "misconduct" after the arbitrator
has been appointed. Here the initial complaint of non-disclosure relates to Mr
Fortier's conduct before he was appointed. However, this is of no practical
significance because the obligation to disclose is a continuing obligation and
AT&T is entitled to rely on non-disclosure at any one of the three stages
to which I have already referred identified by Sir Sidney Kentridge.
49. Turning to the express provision of the ICC Rules which provides that a
decision of the ICC Court should be final, I do not accept the view of Longmore
J that the finality provision means that the English courts have no power to
review the decision of the ICC Court. The finality provision does not operate
to exclude the English court's jurisdiction under s.23 of the 1950 Act.
Accordingly, Longmore J was entitled to consider whether there had been
"misconduct" by breaching the terms of the arbitration agreement. When doing so
the court, if required to interpret the ICC Rules, would naturally pay the
closest attention to any interpretation of the ICC Rules adopted by the ICC
Court, but the English courts retain their jurisdiction to determine whether
the ICC Rules have been breached when entertaining an application to remove for
alleged misconduct.
50. In this case, the decision of the ICC Court provides no assistance because
the decision was not a reasoned one. We do not know the basis upon which the
complaint of AT&T was dismissed.
51. Article 2.7 and the arbitrator's declaration refer to "independence" and do
not refer to "impartiality". This is in contrast to the Unicitral Model Law on
international commercial arbitration as adopted by the United Nations
Commission International Trade Law of 21 June 1985. Article 12 of the Model
Law requires the person approached with regard to a possible appointment as an
arbitrator to "disclose any circumstances likely to give rise to justifiable
doubts as to his impartiality or independence". In most situations it will be
because of a connection or other relationship with a party that the appointment
of an arbitrator will be capable of challenge on the grounds of a lack of
impartiality. Where this is the situation, the potential arbitrator will not
be independent of the parties and will therefore clearly be subject to the
express requirement of Article 2.7. I do not consider that it would be right
to approach the interpretation of Article 2.7 in a narrow and restrictive
manner. However, in this case it is not necessary to express any concluded
view as to the application of Article 2.7 to a potential arbitrator whose
alleged lack of independence is due to a connection with a third party. If, as
I consider the position to be here, Mr Fortier is not disqualified from acting
as an arbitrator on the grounds of bias at common law, I cannot see how he can
be said to lack the necessary independence to which Article 2.7 refers.
52. AT&T's primary complaint about Mr Fortier is that they would not have
selected him as an arbitrator because they would not have wished to disclose
confidential information to even a non-executive director of a competitive
rival. Sir Sydney Kentridge stressed in his submissions the dangers to
AT&T of information being made available to Mr Fortier when he owed the
duties of a non-executive director to Nortel. If an arbitrator disclosed
confidential information to a competitor of a party to an arbitration in the
course of the proceedings, he would certainly be open to a charge of
misconduct. But this misconduct would not involve a breach of any obligation
to be 'independent'. As Sir Sydney developed his submissions, it became
increasingly clear that, while AT&T were complaining of bias, their
concerns were equally, if not more strongly, focused on their need to preserve
confidentiality. Article 2.7 and the arbitrator's declaration are not
addressing this need. The need for confidentiality, which can be critical in
an arbitration, does not depend on Article 2.7, but on the duty of any
arbitrator not to breach the obligations of confidence which he owes to the
parties to the arbitration.
53. Mr Fortier was under the impression he had given a complete CV. Because of
the error AT&T was not aware of his connection with Nortel. This
connection was obviously a matter of which AT&T would have wished to be
aware before it agreed to Mr Fortier's appointment. If it had been, it would
have been perfectly reasonable for AT&T to indicate that it would prefer an
arbitrator who was not a non-executive of Nortel because of its concerns as to
confidentiality. AT&T was deprived of this opportunity, but the ICC Rules
do not provide any support for an allegation that Mr Fortier was guilty of
misconduct because of the error in the CV.
54. In any event, Mr Fortier having been appointed an arbitrator and the
arbitration having reached the stage it has, it would be inappropriate, in the
absence of bias, to set aside the awards or to remove Mr Fortier. Furthermore,
although AT&T's concerns as to the need to preserve confidentiality are
understandable, in the case of an arbitrator as experienced as Mr Fortier, the
risk of his actually making disclosure of confidential information to Nortel,
consciously or unconsciously, is sufficiently remote to be ignored. In any
event, Mr Fortier offered to resign his non-executive directorship but, no
doubt recognising the reality of the situation, AT&T did not accept this
offer. That being so, I find this allegation to be lacking in conviction.
55. AT&T is unable to show any grounds for setting aside the awards or
removing Mr Fortier based on bias or misconduct. This appeal is, accordingly,
dismissed.
LORD JUSTICE POTTER :
56. Save in the minor respect referred to at paragraphs 67-71 below, I agree
with the judgment of the Master of the Rolls and would merely add some
observations of my own.
Bias
57. The question has been raised on this appeal as to whether in English law
the test to be applied on a complaint of bias against an arbitrator in respect
of an award should be different from that applied to judges and tribunals in
respect of decisions made by them in the course of the public administration of
justice. So far as I am aware, it is the first time that an argument that the
tests should diverge has ever been advanced. It arises following the decision
of the House of Lords in Gough which considered the question of bias in
the context of the public administration of justice, but in which Lord Goff of
Chieveley expressed the firm opinion that "the same test should be applicable
in all cases of apparent bias, whether concerned with justices or members of
inferior tribunals, or with jurors or with arbitrators."
58. I respectfully agree with that opinion. It seems to me that, whatever the
test should be, and it is clearly laid down in Gough in terms of the
"real danger" test, it is desirable that it should apply universally in cases
before the English court, where such cases fall to be decided according to
English law and no different statutory or contractual test is applicable.
Adjudication upon an application to the English court brought under its
statutory powers of supervision and intervention in relation to the conduct of
arbitrators is itself an aspect of the public administration justice. The fact
that the tribunal over which the supervision is being exercised is one whose
appointment depends upon the agreement of the parties does not deprive it of
that character. There are many persons or bodies who adjudicate in matters of
discipline or private dispute, or who otherwise resolve complaints, whose
jurisdiction depends on agreement, whether under bilateral agreements, or
multilateral agreements such as the rules of clubs, associations, sporting
bodies, etc. All such persons or bodies, whether performing judicial or
quasi-judicial functions, have a duty to act without bias and, in principle,
there seems to me every reason why, absent some differing test or formula
expressly or impliedly agreed between the parties, a universal test of bias
should be applicable.
59. We have not been referred to any reported decision prior to Gough
which suggests that the English court, when faced with an allegation of bias or
apparent bias on the part of an arbitrator, has considered that a different
test from that said to be appropriate in the case of publicly constituted
courts or tribunals should be applied. It is true that, for the reasons, and
having regard to the decisions, which troubled the House of Lords in
Gough, judges dealing with applications to set aside arbitrations for
misconduct on the grounds of bias have faced difficulty in formulating the
objective test to be applied: see, for instance, The "Elissar" [1984] 2
Lloyd's LR 84 per Ackner LJ at 89; Bremer Handelsgesellschaft -v- Ets Soules
et Cie [1985] 1 Lloyd's LR 160 per Mustill J at 164-5 and [1985] 2 Lloyd's
LR 199 per Ackner LJ at 201-2; Tracomin S.A. -v- Gibbs [1985] 1 Lloyd's
LR 586 per Staughton J at 595-6.
60. In that last-mentioned case, following a review of the relevant
authorities, Staughton J observed:
"In many if not most cases it will make no difference which test is applied.
That is so in the present case, and I am content to adopt real likelihood,
which appears to lay the heaviest burden on the person alleging bias. But I do
not, with great respect share the view of Lord Justice Cross (in
Hannam's case) and Lord Justice Ackner (in the Liverpool City
Justice's case) that there is little if any difference between the two
tests. If it had been necessary to decide the point, I would have followed
what was said by Lord Justice Edmund-Davies in the Metropolitan
Properties case [1969] 1 QB at p.606:
With profound respect to those who have propounded the "real likelihood" test I
take the view that the requirement that justice must manifestly be done
operates with undiminished force in cases where bias is alleged and that any
development of the law which appears to emasculate that requirement should be
strongly resisted. That the different tests, even when applied to the same
facts, may lead to different results is illustrated by Reg. -v- Barnsley
Licensing Justices itself, as Devlin LJ made clear in the passage I have
quoted. But I cannot bring myself to hold that a decision may properly be
allowed to stand even although there is reasonable suspicion of bias on
the part of one or more members of the adjudicating body."
61. I am bound to say I agree with the observations of Staughton J in relation
to the authorities as they then stood and it seems to me that, in propounding
the `real danger' test in Gough, Lord Goff was seeking so far as
possible to strike the right balance between the `real likelihood' and
`reasonable suspicion' tests. Sir Sydney Kentridge argues that in that respect
Lord Goff has not avoided a practical dilution of the principle proclaimed by
Lord Hewart CJ that justice must manifestly be seen to be done, whereas to have
adopted the test of reasonable apprehension or suspicion would not have had
such effect.
62. It may well be that adoption of the reasonable suspicion test would afford
more comfort to those concerned to preserve the sanctity of Lord Hewart's
dictum. However, as it seems to me, the real danger test is intended to be a
working test designed to give effect to that dictum, while having regard to
substance as well as appearance. In that respect, the remarks of Slade J in
R -v- Camborne Justices ex parte Pearce [1955] 1 QB 41 at 52 are
salutary:
"Whilst endorsing and fully maintaining the integrity of the principle
reasserted by Lord Hewart, this court feels that the continued citation of it
in cases to which it is not applicable may lead to the erroneous impression
that it is more important that justice should appear to be done that it should
in fact be done."
Whether or not that is so, I agree with the realism of the post-Gough
assessment of Sir Thomas Bingham MR in Ex parte Dallaglio at 162, that
the famous aphorism of Lord Hewart now requires qualification in the light of
the real danger test. Equally, however, I consider that the need for concern
in that respect is more illusory than real.
63. It is not in dispute that reasonable apprehension of bias is a test in
which reasonableness is judged by the standards of the reasonable objective
observer. That is, in reality, the court itself, embodying the standards of
the informed observer viewing the matter at the relevant time, which is
of course the time when the matter comes before the court. That last
qualification is important because, in judging whether there is bias or
apparent bias, the court approaches the matter on the basis of an observer
informed as to the facts upon which, and the context in which, the allegation
of bias is made. As Lord Goff observed in Gough:
"The law has first to ascertain the real circumstances from the available
evidence, knowledge of which would not necessarily be available to an observer
at court".
64. This, enables the court to consider the matter on the basis of whether or
not the particular matters relied on in support of an allegation of bias were
or were not known to the person or tribunal against whom the allegation of bias
is made. In observing as he did, Lord Hewart was deploying a maxim which is
predominantly concerned with principles of openness and fairness in connection
with trial procedures, which entitle a party to impugn the proceedings if
breach of such procedures can be demonstrated. If a party alleges reasonable
suspicion or real danger of bias as similarly affording a reason to set aside a
decision, it is right that the court should investigate the factual basis for
the allegation in order to see whether there is any real cause for concern.
The time at which to judge whether there is real danger or reasonable suspicion
of bias is the time at which the investigating (appellate) court sets out the
facts upon which its conclusion is based. It is only by that process that the
objective observer, who may earlier have been suspicious for what appeared to
be good reason at the time, is in a position to judge whether real danger or
reasonable grounds for suspicion in fact exist.
65. Upon that basis I have no doubt that the allegation of apparent bias or the
possibility that there was actual, though unconscious, bias (see ex parte
Dallaglio at 152) on the part of Mr Fortier fails.
Misconduct
66. Having failed to establish a case of bias or apparent bias, it was
necessary for AT&T to establish some other ground of misconduct on the part
of Mr Fortier if it wished to invoke the court's jurisdiction to order his
removal. In this respect, Sir Sydney relied upon an asserted failure by Mr
Fortier to comply with Articles 2.7, 2.8 and 2.9 of the ICC Rules and a
separate act of non-disclosure by putting his cross in the first box of the
signed Statement of Independence.
67. So far as those three Articles are concerned I do not consider that any
breach of them has been established. The only matters which they require the
arbitrator to declare are matters going to his "independence" of the parties,
or anything which might call that independence into question in the eyes of any
of the parties. (Sir Sydney conceded that the word "reasonably" needed to be
read in, as qualifying any calling into question of such independence.)
"Independence" connotes an absence of connection with either of the parties in
the sense of an absence of any interest in, or of any present or prospective
business or other connection with, one of the parties which might lead the
arbitrator to favour the party concerned. It is the most frequent and obvious
ground upon which the court will infer the possibility of antecedent bias, but
it is by no means co-extensive with it. The suggestion that, by reason of some
other event or circumstance unrelated to independence, the arbitrator has or
may have an antecedent predisposition against one of the parties may give rise
to a sustainable allegation of bias but it is not one based on absence of
independence.
68. Nor, in my view, is there reason to suppose that the ICC intended to
impose a specific obligation of disclosure on a wider basis than that of
independence: c.f. the wording of Article 12 of the UNCITRAL Rules relating to
disclosure which provides:
"(i) When a person is approached in connection with his possible appointment as
an arbitrator, he shall disclose any circumstances likely to give rise to
justifiable doubts as to his impartiality or independence." (emphasis
added)
69. It is also of interest to note that s.24(1)(a) of the Arbitration Act 1996
provides that a party to arbitral proceedings may apply to the court to remove
an arbitrator on the ground that:
"Circumstances exist that give rise to justifiable doubts as to his
impartiality"
70. In that respect the draftsman appears to have followed the wording of the UNCITRAL Rules but omitting any reference to independence, no doubt on the grounds that the greater includes the less. The question of whether, by that provision in the 1996 Act, the legislature has introduced a statutory definition of bias different in effect from the real danger test in relation to applications brought under s.24(1)(a) remains for future argument.
71. I consider that, outside the field of "independence" covered by the
disclosure obligations in Article 2.7, 2.8 and 2.9 and the form of the
Statement of Independence, the ICC should be taken as having left the question
of disclosure of any matter of possible concern, and in particular the
possibility of bias, to the good faith and judgement of the arbitrator. The
recognition of antecedent bias or partiality is well recognised as a
disqualifying factor going much wider than the issue of independence and is no
doubt one which would be recognised by the ICC if any challenge to an
arbitrator's impartiality were mounted on that ground. Article 8 permits
challenge of an arbitrator to the Secretary-General of the ICC "whether for an
alleged lack of independence or otherwise". Thus, it is not in my view
necessary to interpret Article 2.7 as extending to a complaint of bias in any
wider sense than lack of independence for the purpose of enabling a challenge
to be made to the Secretary-General under Article 8 and for the arbitrator to
be disqualified by the ICC if such challenge is accepted. Thus, insofar as
AT&T invites the court to find misconduct or procedural mishap on the basis
of a breach by Mr Fortier of the ICC Rules, I consider it has failed to make
out its case.
72. Nonetheless, if I am wrong in that respect, and breach can be demonstrated,
it does not seem to me to be one which could possibly justify the removal of
Mr Fortier as an arbitrator, or the setting aside of any of the awards made.
So far as the non-disclosure of Mr Fortier's directorship of Nortel was
concerned, it was entirely inadvertent. Furthermore, as we have held, no
suggestion or real danger of partiality arises or has been substantiated. Nor
has any disadvantage in the course of the arbitration been demonstrated.
73. Pressed upon the question of what prejudice AT&T had in fact suffered
as a result of the non-disclosure, Sir Sydney was obliged to assert what he
called the "general prejudice" of having had the matter arbitrated by an
arbitrator whom AT&T would not have chosen had it been aware of the matter
inadvertently not disclosed. While, no doubt, the purpose of the disclosure
rules is designed to enable the parties to confirm their choice of arbitrator
on a fully informed basis, the fact that such purpose may have been
inadvertently defeated is not in itself sufficient to justify removal of the
arbitrator once appointed or the setting aside of awards duly made and
untainted by bias. In such cases the court will only take such a step where
justice demands it. In my view, no such consideration arises in this case.
There is no suggestion that Mr Fortier has acted or would act in breach of
confidence, which, as the Master of the Rolls has pointed out, appears to be
the principal basis (as opposed to the likelihood of bias), on which AT&T
would have objected to Mr Fortier. To set aside the partial awards or to
replace Mr Fortier at this stage would be both a costly inconvenience and a
substantial injustice to the respondents.
74. I too would dismiss this appeal.
LORD JUSTICE MAY :
75. I agree that this appeal should be dismissed for the reasons given by Lord
Woolf M.R. Essentially and in short, the reasons which lead me to this
conclusion are that, in my judgment:
(a) the test under English law for apparent or unconscious bias in an
arbitrator is the same as that for all those who make judicial decisions and is
that to be found in the opinion of Lord Goff of Chieveley in R. v.
Gough [1993] AC 646. On this test, bias was not established in this case
against Mr Fortier, and that by a long margin.
(b) even if the test propounded by Sir Sydney Kentridge were to be applied,
bias would not be established in this case against Mr Fortier, and that by a
long margin.
(c) if there was a procedural mishap such as to enable the court to consider
whether to exercise its discretion under section 23 of the Arbitration Act
1950, the case on the facts for removing Mr Fortier as arbitrator, or setting
aside the awards which he and his fellow arbitrators unanimously made, was so
weak that I consider that the court should not do so.
76. I express the third of these reasons in the way that I have, because I
thought at one stage during the submissions that the academic case that there
was a procedural mishap was quite strong. Lord Woolf M.R. has set out the
terms of Article 2.7 of the ICC rules in paragraph 11 of his judgment and the
text of the printed Statement of Independence in paragraph 13. I agree that Mr
Fortier's non-executive directorship of Nortel may be seen as not calling in
question his independence. I also agree that a main plank of AT&T's case
concerned the possible disclosure of confidential information to a
non-executive director of a competitor, rather than Mr Fortier's independence
as arbitrator. But it did seem to me that there was a reasonably persuasive
general case that his non-executive directorship "might be of such a nature as
to call into question [his] independence in the eyes of [one] of the
parties". If AT&T had known of this directorship at the outset, an
objection by them to his acting as arbitrator would, in my view, probably have
been regarded as reasonable and would have been sustained. They did not know,
and I was inclined to think that his unwitting failure to tick the second box
in the Statement of Independence could be seen as a procedural mishap. But I
do not think that it is necessary to reach a conclusion on this point because,
even if it were a procedural mishap, I do not consider that the court should
now exercise a discretion in AT&T's favour under section 23 of the 1950 Act.