The rules of natural justice dictate that a party that is to be bound by the decision of a Judge, Arbitrator or Adjudicator is entitled to have its dispute decided by an unbiased tribunal.Decisions from a tribunal which are proven to have been actually biased are not enforceable. So, for example, where a Judge, Arbitrator or Adjudicator has a direct or indirect financial interest in his or her decision and this is proven to have influenced the tribunal’s award then it will be obvious to all that such a decision cannot be allowed to stand.
Apparent bias is a more difficult concept and is perhaps best described as a situation in which there is a real concern that a Judge, Arbitrator or Adjudicator may have been biased towards one of the parties in its decision-making function.
In A and others -v- B and another  the Commercial Court had to consider an application to remove an Arbitrator on the grounds that there were justifiable doubts as to his impartiality, under section 24 of the Arbitration Act 1996, and to set aside an arbitration award on the grounds of serious irregularity, under section 68 of the Act.
The background to this case is that the Arbitrator had been instructed by party B’s solicitors to act as counsel in a completely unrelated case. The Arbitrator did not disclose this fact until a year later when drafting his award in favour of party B and party A then applied to Court to have the Arbitrator removed and the award set aside.
The Court found that it had to consider the facts as they appeared at the hearing and not at the time of disclosure or non-disclosure. It was further obliged to apply the test set out in the case of Porter -v-Magill , namely “whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” [Emphasis added]
In applying this test the Court dismissed the application, finding that a “fair-minded and informed observer” would not conclude that there was a real possibility of apparent or unconscious bias on the part of the Arbitrator in this case. There was no serious irregularity to justify removing the Arbitrator and/or setting aside the award.
What is a “fair-minded and informed observer”?
From reviewing some of the relevant case law on this subject, including R -v- Gough , Locabail (UK) Ltd -v- Bayfield Properties Ltd and another , R v Bow Street Metropolitan Stipendiary Magistrate Ex Parte Pinochet Ugarte No 2, Porter -v-Magill  and A & S Enterprises Ltd -v- Kema Holdings Ltd  it would seem that a “fair-minded and informed observer” is someone that would have the following attributes:
- He or she would reserve judgement on every issue until he or she had seen and fully understood both parties’ arguments on the issue.
- Before taking a balanced approach to any information given, he or she would inform himself or herself on all matters that were relevant.
- A “fair-minded and informed observer” would not be regarded as a lawyer, but be expected to be someone who would understand how the legal profession works in practice.
So, in summary, and in applications to remove a tribunal based on an allegation of apparent bias, a Court will put itself in the position of a “fair-minded and informed observer” and judge whether there is a real possibility of apparent bias at the time the application is heard, on the basis of the material available to the Court at the time of the application.
Peter Vinden is a practising arbitrator, adjudicator and mediator. He is Managing Director of Vinden and can be contacted by email at firstname.lastname@example.org