LMH v EGK
[2023] EWHC 1832 (Comm)
Aiteo Eastern E & P Company Limited v Shell Western Supply and Trading Limited & Ors
1 August 2024
[2024] EWHC 1993 (Comm)
High Court
A company challenged some court decisions because one of the judges had secret ties to a law firm involved in the case. The judge was removed, and a higher court decided that one decision needed to be re-examined, but the others were okay.
Key Facts
- •Aiteo Eastern E&P Company Limited (Aiteo) challenged four partial awards made by an ICC arbitration tribunal.
- •The challenge was based on alleged apparent bias of tribunal member Dame Elizabeth Gloster (DEG).
- •The ICC Court upheld the challenge against DEG.
- •Aiteo sought to set aside the awards under section 68 of the Arbitration Act 1996 and applied for an extension of time under section 80(5).
- •The alleged bias stemmed from undisclosed professional connections between DEG and Freshfields Bruckhaus Deringer LLP, the solicitors representing the parties who nominated DEG.
- •Aiteo argued res judicata or issue estoppel based on the ICC Court's decision.
Legal Principles
Apparent bias test: Would a fair-minded and informed observer consider there was a real possibility of bias?
Halliburton Co v Chubb Bermuda Insurance Ltd [2020] UKSC 48
Arbitrator's duty of disclosure: Must disclose facts or circumstances that might call into question independence or impartiality in the eyes of the parties.
Article 11 of the ICC Rules of Arbitration
Section 68 of the Arbitration Act 1996: Allows setting aside an award for serious irregularity affecting the tribunal, provided substantial injustice is shown.
Arbitration Act 1996
Section 80(5) of the Arbitration Act 1996: Allows the court to extend time limits for applications.
Arbitration Act 1996
Substantial injustice: A separate requirement under section 68, even in cases of apparent bias; normally inferred but rebuttable.
RAV Bahamas v Therapy Beach Club [2021] UKPC 8; Africa Sourcing Cameroun Ltd v LMBS [2023] EWHC 150 (Comm)
Outcomes
Time extension granted under section 80(5) of the Arbitration Act 1996.
The court found that the delay was largely due to the late disclosures by DEG, and that Aiteo acted reasonably. The importance of impartiality under the Act outweighed concerns about delay.
Onshore Jurisdiction Award remitted to the reconstituted tribunal for reconsideration under section 68(3).
Apparent bias was found, and substantial injustice was inferred as inherently likely due to the bias. The court deemed it appropriate for the tribunal to reconsider the award.
Application dismissed for the remaining three awards.
While apparent bias was found regarding DEG, Aiteo failed to demonstrate substantial injustice in relation to the Offshore Jurisdiction Award (due to a de novo rehearing before Foxton J) and the Consolidation Award (due to unusual circumstances showing independent decision-making by the other arbitrators).
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