Key Facts
- •Claimants (insurer) sought removal of sole arbitrator (W) for apparent bias in an arbitration concerning a film production insurance policy.
- •The underlying dispute involved a claim of approximately £3m for extra expenses due to a stunt accident delaying filming.
- •The insurer alleged that arbitrator W made remarks indicating pre-determined views on witness credibility and a predisposition towards the insured.
- •Arbitrator W had prior professional relationships with several witnesses for the insured.
- •The insurer argued that a fair-minded observer would conclude there was a real possibility of bias.
- •The court considered the arbitrator's comments on witness evidence, particularly the insured's expert witnesses, and the arbitrator's handling of a witness who had previously worked for the insured.
Legal Principles
Apparent bias test: Would a fair-minded and informed observer conclude there was a real possibility of bias?
Halliburton Co v Chubb Bermuda Insurance Ltd [2021] AC 1083
Arbitration Act 1996, section 24(1)(a): Grounds for removing an arbitrator – circumstances giving rise to justifiable doubts as to impartiality.
Arbitration Act 1996
Arbitration Act 1996, section 33: Duty of impartiality – acting fairly and impartially between parties.
Arbitration Act 1996
In applying the apparent bias test, the court must consider the context of arbitration, including limited discovery and the arbitrator's financial interests.
Halliburton Co v Chubb Bermuda Insurance Ltd [2021] AC 1083
Expressing preliminary views is not automatically biased, but it could indicate bias if it suggests a final decision before hearing all evidence.
Bubbles & Wine Ltd v Lusha [2018] EWCA Civ 468
An arbitrator can use personal knowledge of the industry to evaluate evidence, but this cannot replace actual evidence.
Fox v Wellfair Ltd [1981] Lloyd's Rep 514
Outcomes
Arbitrator W was removed.
The court found that the arbitrator's remarks about the insured's expert witnesses demonstrated a real possibility of bias, as a fair-minded observer would conclude he had prejudged the evidence based on his prior knowledge of the witnesses. His comments about a witness 'switching sides' were deemed misguided but not sufficient to demonstrate bias on their own.
Arbitrator W was entitled to fees and expenses up to the conclusion of the Second Procedural Hearing.
This was determined pursuant to section 24(4) of the Arbitration Act 1996.
The judgment was published with the parties', witnesses', and arbitrator's names anonymised.
This was done to balance open justice with the confidentiality expected in arbitration, particularly given the small, close-knit nature of the industry involved.