• Andrew Davis

Apparent Bias

Hunt ADR Associate Arbitrator, Andrew Davis, reviews apparent bias in light of the recent decision of HHJ Pelling QC in Newcastle United v The Premier League

Arbitrators should already be familiar with the Supreme Court’s decision in Halliburton v Chubb, which arose out of the Deepwater Horizon oil spill. The arbitrator in question had accepted other arbitration appointments related to this incident but failed to disclose them. Whilst the arbitrator was not removed by the court on the facts, the Supreme Court confirmed that in English law, there is a duty to disclose facts and circumstances known to an arbitrator that might reasonably give rise to allegations of bias. If the information is subject to an arbitrator’s duty of privacy and confidentiality, disclosure is subject to the consent of all parties. This is particularly relevant to appointments in multiple references with overlapping subject matter and one common party.

Following on in the slipstream of this judgment has been the recent decision of HHJ Pelling QC in Newcastle United FC v The Premier League. The case concerns a potential takeover of Newcastle by a Saudi Arabian sovereign wealth fund, which the Premier League did not approve under its Rules on the ground that the fund was controlled by the government of Saudi Arabia. Newcastle contest this in a continuing arbitration. The Premier League’s solicitors, Bird & Bird LLP (“Bird”) informed Newcastle’s solicitors that the appointed chairman of the panel by the other two arbitrators, Michael Beloff QC (“Beloff”), had in 2017 advised the Premier League in respect of an amendment to parts of its Rules, more than three years prior to this appointment. Bird also disclosed that in the last three years it had been involved in twelve arbitral proceedings in which Beloff had been an arbitrator, including three where he had been appointed by Bird.

In the ongoing arbitration, Newcastle applied to remove Beloff pursuant to s.24(1)(a) of the Arbitration Act 1996 on the grounds that he had previously advised the Premier League on an aspect of its Rules and because of the other arbitral appointments. Under this section, sometimes referred to as “apparent bias”, what is tested is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. This is objectively assessed on the facts. The court decided that if Beloff’s advice had been concerned with the very issue that arose in this arbitration, then a reasonable bystander might have thought there was a possibility of bias. However, the previous advice on the Rules was not concerned with the issue in the arbitration. Additionally, only three of the twelve appointments relied upon were made by Bird, and two of those were made after Beloff had accepted his appointment. Newcastle’s Application for removal therefore failed.

The case highlights the importance of arbitrators addressing questions of disclosure and apparent bias early on in any arbitration proceedings. Though cases are fact specific, erring on the side of disclosure can save much time and expense later on, and does not necessarily result in recusal.

Andrew Davis, Hunt ADR Associate Arbitrator

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