We previously blogged about the Supreme Court ruling in Halliburton Co v Chubb Bermuda Insurance Ltd which addressed arbitrator's duties and related principles against bias. The recent English Commercial Court decision in Newcastle United Football Company Limited v. (1) The Football Association Premier League Limited, (2) Michael Beloff QC, (3) Lord Neuberger, (4) Lord Dyson, provides some insight into the application of these principles in practice.
Newcastle United Football Company Limited (NUFC) made an application to the court to have an arbitrator removed. The basis of that application was apparent bias.
The test for whether there is apparent bias is objective. It asks whether a fair-minded and informed observer, having considered all of the facts, would conclude that there was a real possibility that the arbitrator was biased. Arbitrators also have a duty to disclose matters which may give rise to a perception of bias. We have discussed these duties in a previous blog.
An arbitration arose in relation to NUFC's selling of shares in The Football Association Premier League Limited (PLL) to a company ultimately owned by a Saudi Arabian sovereign wealth fund. A dispute arose on whether the wealth fund was controlled by the Saudi Arabian government. If it was, this would affect whether the government would become a director and what PLL was required to do under its own rules.
Each party nominated their own arbitrators and agreed the appointment of Michael Beloff QC as chair. In accepting the nomination, Mr Beloff was required to certify that there were no circumstances which existed which might give rise to justifiable doubts to his impartiality.
NUFC subsequently became aware of various circumstances which, it submitted, would give rise to doubts about Mr Beloff's impartiality. Accordingly, it made an application to the court for Mr Beloff to be removed.
NUFC advanced 4 arguments in its application to remove the arbitrator:
- He had not disclosed that he had previously given advice to the PLL on four separate occasions over two years before his appointment in the arbitration;
- PLL had previously been party to twelve separate arbitrations in which he had been arbitrator; in three of which he had been expressly appointed by PLL;
- He had not disclosed his involvement in the previous arbitrations involving PLL; and
- The arbitrator had sought PLL's view on whether he should recuse himself (step down due to any lack of impartiality or conflict of interest).
The court reiterated the test for establishing arbitrator bias and stated that the arbitrator had a duty to disclose any matters which could arguably lead to a fair minded and informed observer concluding there was a real possibility of bias. It ultimately rejected the application on each ground.
Specifically, the court considered that:
- The advice Mr Beloff had previously given to PLL had no overlap with the issues currently in dispute.
- The mere fact that an arbitrator had previously been appointed as an arbitrator in a large number of previous arbitrations involving a party (in the current dispute) was not enough for a conclusion of bias. This was particularly so when applied to the context of a sports arbitration in which the pool of appropriate arbitrators was small. Nor did that arbitrator have a duty to disclose the appointments in these circumstances. His non-disclosure was in accordance with the International Bar Association Guidelines.
- Specifically with regard to disclosure, the court considered it relevant that in this case Mr Beloff was not PLL's appointment and had instead been agreed between parties. It was further considered that there was no continuing relationship between Mr Beloff and PLL. Accordingly, in the circumstances, the non-disclosure did not give rise to a conclusion that there was a real possibility of bias.
- The judge considered the private email exchange between Mr Beloff and PLL (discussing whether he should recuse himself) to be "an error of judgement". However, this was weighed against his experience and reputation together with his willingness to subsequently disclose the communications. The court reached the conclusion that a fair-minded observer would not conclude there was any real risk of bias
This case is the first in England to apply the principles of Halliburton. It shows that parties will find it difficult to succeed in an application to have an arbitrator removed on the basis of apparent bias. Clearly, each case will turn on its own facts but it is clear that the bar is high. The court will not lightly intervene and is willing to be guided by the practicalities on the ground – by considering the International Bar Association Guidelines, the circumstances of appointment and the size of the pool of appropriately qualified prospective arbitrators.