Key takeaways
Apparent bias requires clear, objective evidence
The commercial court confirmed that allegations of apparent bias must be supported by facts not assumptions or strategic timing.
Repeat appointments don’t prove partiality
In specialist arbitration settings like maritime disputes, arbitrators often receive repeat appointments. This alone doesn’t show impartiality or require disclosure.
Disclosure duties depend on arbitration norms
Under LMAA rules, arbitrators aren’t required to disclose previous unrelated appointments unless there’s a real risk of conflict of interest.
V & another -v- K [2025] EWHC 1523 (Comm)
In a detailed judgment, the Commercial Court has reconfirmed the high threshold for successfully challenging a maritime arbitration award on the basis of apparent bias.
The background facts
The dispute arose under a memorandum of agreement (MOA) for the sale and purchase of a vessel. Buyer 1 subsequently nominated Buyer 2 to accept and take delivery of the vessel.
When Buyer 1 became subject to US sanctions, the Seller terminated the MOA on the grounds of sanctions and also claimed to be entitled to the deposit that was held in escrow. The Buyers contended that the termination was a repudiatory beach of the MOA, which they accepted. The Buyers counterclaimed for the deposit and damages.
In LMAA arbitration, the tribunal found that the Seller was entitled to receive the deposit. The Buyers appealed to the Court.
The Buyers initially brought a number of challenges against the tribunal’s award but ultimately withdrew all but one: that the tribunal was guilty of apparent bias because the Seller’s arbitrator did not give adequate disclosure of his relationship with the solicitors who had appointed him on behalf of the Seller.
The law
The established test for apparent bias under English law 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”.
The reverse side of the same coin is the arbitrator’s obligation to disclose to the parties in the arbitration facts or circumstances which may give rise to an inference of apparent bias.
The key case is the Supreme Court decision in Halliburton Co -v- Chubb Bermuda Insurance Ltd [2021] AC 1083, an insurance-coverage dispute under a Bermuda Form insurance policy.
In that case, an arbitrator was appointed as third arbitrator and chairman by the Court in one arbitration. That arbitrator subsequently accepted appointment as arbitrator in two related arbitrations, in one of which he was appointed by a defendant in the first arbitration. These appointments were not disclosed to the claimant, who sought to have the arbitrator removed on the grounds that circumstances existed that gave rise to justifiable doubts as to the arbitrator’s impartiality.
While the test for actual or apparent bias is to be applied with thorough objectivity and detachment, as the Supreme Court stated in Halliburton, context is important. In LMAA (and other specialist) arbitrations, it is common to have the same arbitrators acting in multiple arbitrations, often arising out of the same events. Parties who agree to submit their disputes to these specialist arbitrations are taken to have agreed to this practice and to have accepted that an arbitrator need not disclose such multiple appointments. The exception to this rule in specialist arbitrations is where there are additional factors that could give rise to the appearance of bias.
The Commercial Court decision
The Court stated that while a failure by an arbitrator to make disclosure of e.g. multiple appointments was a relevant consideration when deciding whether there was a real possibility of apparent bias, other factors might point the other way.
This was not a case of multiple appointments in related cases. Rather, it concerned repeated instructions in unrelated arbitrations by the same law firm over a number of years. However, law firms specialising in maritime law will naturally act for many different clients, such that the inevitability of repeat appointments of individual LMAA arbitrators was greatly magnified.
The Court highlighted that the custom or practice of the London maritime market to frequently appoint the same arbitrator in different cases was expressly stated in the LMAA Advice on Ethics.
The Court concluded that it would be understood by regular participants in the London maritime market, such as the solicitors acting for the parties in this case, that disclosure of previous appointments in this case would not be thought necessary. If, as the Supreme Court held in Halliburton, there was no duty of disclosure in the case of overlapping LMAA arbitrations, it was even less likely that there was a duty to disclose appointments in unrelated LMAA arbitrations.
Accordingly, the arbitrator in question was found not to have been under a duty to disclose his previous appointments by the Seller’s solicitors.
Comment
Allegations of apparent bias, particularly in specialist arbitrations, will need to be properly substantiated. The Court will frown upon opportunistic and tactical challenges and will need some convincing that a respected and experienced arbitrator has demonstrated actual or apparent bias. In the event that such a challenge is to be made, the party bringing the challenge should do so promptly rather than wait until the award has been published and then seek to challenge it.
It should also be kept in mind that other arbitration rules may have an established expectation that, before accepting appointment in a reference, an arbitrator will disclose earlier relevant appointments to the parties and is expected similarly to disclose subsequent appointments occurring in the course of the reference.