Aiteo Eastern E & P Company Limited v Shell Western Supply and Trading Limited & Ors
[2024] EWHC 1993 (Comm)
Africa Sourcing Cameroun Limited v LMBS Société Par Actions Simplifiée
27 January 2023
[2023] EWHC 150 (Comm)
High Court
Two cocoa companies argued a court decision was unfair because the judge knew too much about one side. The judge who heard the appeal said the first decision was fair and that the complaining company should have spoken up sooner, so the first decision stood.
Key Facts
- •Africa Sourcing (Claimants) challenged an arbitration award by the Federation of Cocoa Commerce (FCC) Board of Appeal (Rockwinds, Defendant).
- •The challenge was based on apparent bias of the Board's chair, Mr. Bourgeois.
- •The Award dismissed Africa Sourcing's claims due to a time bar, refusing to exercise discretion to extend the time.
- •Africa Sourcing argued that Mr. Bourgeois failed to disclose several circumstances that could raise justifiable doubts about his impartiality.
- •These circumstances included Mr. Bourgeois' presence at an FCC council meeting discussing Africa Sourcing's membership application, where Mr. Stolz (Rockwinds) raised concerns about Africa Sourcing's conduct.
- •Other alleged undisclosed circumstances included dinners attended by Mr. Bourgeois, Mr. Stolz, and other industry figures, a prior business transaction between Mr. Bourgeois' employer and Rockwinds, and a long-standing acquaintance between Mr. Bourgeois and Mr. Stolz.
- •Africa Sourcing contended that these undisclosed factors caused substantial injustice, leading to a biased award.
Legal Principles
Section 68 of the Arbitration Act 1996 allows challenging an award based on serious irregularity affecting the tribunal, proceedings, or award.
Arbitration Act 1996, Section 68
Serious irregularity includes a tribunal's failure to comply with its duty to act fairly and impartially (Section 33).
Arbitration Act 1996, Section 33
Section 73 of the Arbitration Act 1996 states that a party may lose the right to challenge an irregularity if they didn't object earlier and could have discovered the grounds with reasonable diligence.
Arbitration Act 1996, Section 73
The test for apparent bias is objective: would a fair-minded and informed observer conclude there's a real possibility of bias?
Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48
Arbitrators have a duty to disclose facts and circumstances that might reasonably give rise to the appearance of bias.
Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48
Substantial injustice must be established for a serious irregularity to be grounds for setting aside an award; the outcome might have been different if the irregularity hadn't occurred.
RAV Bahamas v Therapy Beach Club Inc [2021] UKPC 8
Outcomes
The application to set aside the arbitration award was dismissed.
The court found that Mr. Bourgeois had no duty to disclose the alleged circumstances, and even if there was a failure to disclose, the irregularity wasn't serious enough to infer substantial injustice. Furthermore, the claimants failed to act with reasonable diligence in raising the bias point earlier.