BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
COMMERCIAL COURT (QBD)
IN AN ARBITRATION CLAIM
B e f o r e :
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MANCHESTER CITY FOOTBALL CLUB LIMITED |
Claimant |
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- and - |
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THE FOOTBALL ASSOCIATION PREMIER LEAGUE LIMITED PHILIP HAVERS QC JOHN MACHELL QC DANIEL ALEXANDER QC |
Defendants |
____________________
ADAM LEWIS QC and ANDREW HUNTER QC (instructed by BIRD & BIRD LLP) for the First Defendant
Hearing dates: 1 and 2 March 2021
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Crown Copyright ©
Mrs Justice Moulder:
Evidence
Hearing
Background
The application
i) an order under Section 67 of the Act on the basis that the tribunal erred in concluding that it had jurisdiction to hear the arbitration;
ii) an order under Section 68 of the Act on the basis that there was apparent bias on the part of the tribunal and under Section 24 of the Act removing the tribunal members.
Grounds of challenge
i) that on a proper construction of the Rules, the PL had no power to institute arbitral proceedings under Rule X (the "Construction Objection"). This challenge to the jurisdiction of the tribunal under Section 67 of the Act is thus one of the construction of the relevant contract, that is the Rules.
ii) that the disciplinary and dispute resolution proceedings are unfair and in breach of the principles of impartiality and independence due to the process for appointment and reappointment of potential arbitrators to the PL's Panel. This challenge is thus one of apparent bias under Section 68 of the Act (paragraph 26 of the Club's skeleton).
Section 67 challenge
Relevant legislative framework
"67.— Challenging the award: substantive jurisdiction.
(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court—
(a) challenging any award of the arbitral tribunal as to its substantive jurisdiction; or
(b) for an order declaring an award made by the tribunal on the merits to be of no effect, in whole or in part, because the tribunal did not have substantive jurisdiction.
A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).
…
(3) On an application under this section challenging an award of the arbitral tribunal as to its substantive jurisdiction, the court may by order—
(a) confirm the award,
(b) vary the award, or
(c) set aside the award in whole or in part.
Nature of hearing
"…[t]he award of the arbitrators has no automatic legal or evidential weight. Nevertheless, and given that the arbitral tribunal has considered the same issues, the Court will examine the award with care and interest. If and to the extent that the reasoning is persuasive, then there is no reason why the Court should not be persuaded by it." (Korea v Dayyani [2019] EWHC 3580 (Comm).)
Relevant Rules (as in force prior to the amendments in February 2020)
"Section W: Disciplinary
Power of Inquiry
W.1. The Board shall have power to inquire into any suspected or alleged breach of these Rules and for that purpose may require:
W.1.1. any Manager, Match Official, Official or Player to appear before it to answer questions and/or provide information; and
W.1.2. any such Person or any Club to produce documents.
W.2. …
Board's disciplinary powers
W.3. The Board shall have power to deal with any suspected or alleged breach of these Rules by either:
W.3.1. issuing a reprimand;
W.3.2. imposing a fixed penalty or other sanction where such provision is made in these Rules;
W.3.3. exercising its summary jurisdiction;
W.3.4. referring the matter to a Commission appointed under Rule W.21;
W.3.5. referring the matter to The Football Association for determination under The Football Association Rules; or
W.3.6. concluding an agreement in writing with that Person in which it accepts a sanction (which may include any of the sanctions referred to at Rule W.55) proposed by the Board.
W.4…
…
Appointing a Commission
W.21. A Commission shall be appointed by the Board and shall comprise three members of the Panel of whom one, who shall be legally qualified, shall sit as chairman of the Commission.
…
Commission's Powers
W.54. …
W.55. Having heard and considered such mitigating factors (if any) the Commission may:
W.55.1.reprimand the Respondent;
W.55.2. impose upon the Respondent a fine unlimited in amount and suspend any part thereof;
W.55.3.in the case of a Respondent who is a Manager, Match Official, Official or Player, suspend him from operating as such for such period as it shall think fit;
W.55.4. in the case of a Respondent which is a Club:
W.55.4.1. suspend it from playing in League Matches or any matches in competitions which form part of the Games Programmes or Professional Development Leagues (as those terms are defined in the Youth Development Rules) for such period as it thinks fit;
W.55.4.2. deduct points scored or to be scored in League Matches or such other matches as are referred to in Rule W.55.4.1;
W.55.4.3. recommend that the Board orders that a League Match or such other match as is referred to in Rule W.55.4.1 be replayed;
W.55.4.4. recommend that the League expels the Respondent from membership in accordance with the provisions of Rule B.7;
W.55.5. order the Respondent to pay compensation unlimited in amount to any Person or to any Club (or club);
W.55.6. cancel or refuse the registration of a Player registered or attempted to be registered in contravention of these Rules;
W.55.7. impose upon the Respondent any combination of the foregoing or such other penalty as it shall think fit;
W.55.8. order the Respondent to pay such sum by way of costs as it shall think fit which may include the fees and expenses of members of the Commission paid or payable under Rule W.53; and
W.55.9. make such other order as it thinks fit
…
Appeal Board's Powers
W.79…
W.80 Subject to the provisions of Section X of these Rules (Arbitration), the decision of an Appeal Board shall be final.
Section X: Arbitration
X.1. …
Agreement to Arbitrate
X.2 Membership of the League shall constitute an agreement in writing between the League and Clubs and between each Club for the purposes of section 5 of the Act in the following terms:
X.2.1. to submit all disputes which arise between them (including in the case of a Relegated Club any dispute between it and a Club or the League, the cause of action of which arose while the Relegated Club was a member of the League), whether arising out of these Rules or otherwise, to final and binding arbitration in accordance with the provisions of the Act and this Section of these Rules;
…
X.3 Disputes under these Rules will be deemed to fall into one of three categories, being:
X.3.1. disputes arising from decisions of Commissions or Appeal Boards made pursuant to Rules W.1 to W.83 (Disciplinary) of these Rules ("Disciplinary Disputes");
X.3.2. disputes arising from the exercise of the Board's discretion ("Board Disputes"); and
X.3.3. other disputes arising from these Rules or otherwise.
X.4 In the case of a Disciplinary Dispute, the only grounds for review of a decision of a Commission or Appeal Board by way of arbitration under this Section X shall be that the decision was:
X.4.1. reached outside of the jurisdiction of the body that made the decision;
X.4.2. reached as a result of fraud, malice or bad faith;
X.4.3. reached as a result of procedural errors so great that the rights of the applicant have been clearly and substantially prejudiced;
X.4.4. reached as a result of a perverse interpretation of the law; or
X.4.5. one which could not reasonably have been reached by any Commission or Appeal Board which had applied its mind properly to the facts of the case.
…
Remedies
X.27. The tribunal shall have power to:
X.27.1. determine any question of law or fact arising in the course of the arbitration;
X.27.2. determine any question as to its own jurisdiction;
X.27.3. make a declaration as to any matter to be determined in the proceedings;
X.27.4. order the payment of a sum of money;
X.27.5. award simple or compound interest;
X.27.6. order a party to do or refrain from doing anything;
X.27.7. order specific performance of a contract (other than a contract relating to land); and
X.27.8.order the rectification, setting aside or cancellation of a deed or other document…" [emphasis added]
Submissions
i) on a proper construction of the Rules, the PL had no power to institute arbitral proceedings under Rule X as the Rules properly construed required the dispute to be resolved through Rule W and not by a Rule X arbitration (although a Rule X arbitration may occur at the end of the Rule W process) (paragraph 15 of the Club's skeleton).
ii) the dispute relates to a disciplinary matter expressly within the scope of Rule W; the PL is enquiring into a suspected or alleged breach of the rules (paragraph 16 (a) of the Club's skeleton); Rule W applies in the circumstances of the dispute and that implicitly excludes the application of Rule X.
iii) Rule X concerns arbitration and the PL has sought impermissibly to use Rule X as an additional procedure (paragraph 16 (c) of the Club's skeleton).
iv) there are safeguards in Rule W inter alia, a right of appeal from a Commission to an Appeal Board and the chairman of the Appeal Board must have held judicial office; Rule W.80 recognises arbitration as the final stage in the disciplinary process (paragraph 16 (d) of the Club's skeleton).
v) Rule X recognises that disciplinary disputes are one category of dispute in respect of which a Rule X arbitration may be commenced and Rule X.4 specifies that in such a case, the powers of an arbitral tribunal are confined to a review of the decision on limited and specified grounds (paragraph 16 (e) of the Club's skeleton).
vi) the arrangements within Rule W constitute the agreement to be followed when disciplinary matters arise (paragraph 16 (f) of the Club's skeleton).
i) Section X expressly includes at X.27.7 claims for specific performance.
ii) there is no express term in Section X or any other Rule excluding PL from bringing such a claim for specific performance (and thus the Club is forced to contend that such exclusion is "implicit").
iii) there is no basis for the implicit exclusion of Section X - it does not satisfy the test in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and another [2015] UKSC 72 at [18] that it must be "necessary to give business efficacy to the contract" and so obvious that 'it goes without saying'.
iv) there is good reason why the PL might want to pursue contractual remedies instead of or alongside disciplinary action, for example a club leaving the Premier League.
v) the implied exclusion would exclude the PL from ever seeking specific performance and would be contrary to the principle in Gilbert Ash (Northern) Ltd. v Modern Engineering (Bristol) Ltd. [1974] A.C. 689.
vi) there is express power to grant the relief sought which is not restricted to clubs.
Discussion
"[10] The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning…
11. Lord Clarke elegantly summarised the approach to construction in Rainy Sky at para 21f. In Arnold all of the judgments confirmed the approach in Rainy Sky (Lord Neuberger paras 13-14; Lord Hodge para 76; and Lord Carnwath para 108). Interpretation is, as Lord Clarke stated in Rainy Sky (para 21), a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of drafting of the clause (Rainy Sky para 26, citing Mance LJ in Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2) [2001] 2 All ER (Comm) 299 paras 13 and 16); and it must also be alive to the possibility that one side may have agreed to something which with hindsight did not serve his interest: Arnold (paras 20 and 77). Similarly, the court must not lose sight of the possibility that a provision may be a negotiated compromise or that the negotiators were not able to agree more precise terms.
12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: Arnold para 77 citing In re Sigma Finance Corpn [2010] 1 All ER 571 , para 10 per Lord Mance. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.
13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements. Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals. The correct interpretation of other contracts may be achieved by a greater emphasis on the factual matrix, for example because of their informality, brevity or the absence of skilled professional assistance. But negotiators of complex formal contracts may often not achieve a logical and coherent text because of, for example, the conflicting aims of the parties, failures of communication, differing drafting practices, or deadlines which require the parties to compromise in order to reach agreement…" [emphasis added]
The language of the clause
"X.2 Membership of the League shall constitute an agreement in writing between the League and Clubs and between each Club … in the following terms:
X.2.1. to submit all disputes which arise between them (including in the case of a Relegated Club any dispute between it and a Club or the League, the cause of action of which arose while the Relegated Club was a member of the League), whether arising out of these Rules or otherwise, to final and binding arbitration… " [emphasis added]
"[27] Of course, it is fair to say that the factors to be taken into account on an issue of construction, namely the words used in the contract, the surrounding circumstances known to both parties at the time of the contract, commercial common sense, and the reasonable reader or reasonable parties, are also taken into account on an issue of implication. However, that does not mean that the exercise of implication should be properly classified as part of the exercise of interpretation, let alone that it should be carried out at the same time as interpretation. When one is implying a term or a phrase, one is not construing words, as the words to be implied are ex hypothesi not there to be construed; and to speak of construing the contract as a whole, including the implied terms, is not helpful, not least because it begs the question as to what construction actually means in this context.
28 In most, possibly all, disputes about whether a term should be implied into a contract, it is only after the process of construing the express words is complete that the issue of an implied term falls to be considered. Until one has decided what the parties have expressly agreed, it is difficult to see how one can set about deciding whether a term should be implied and if so what term…"
"When one is implying a term or a phrase, one is not construing words, as the words to be implied are ex hypothesi not there to be construed"
"[26] I accept that both (i) construing the words which the parties have used in their contract and (ii) implying terms into the contract, involve determining the scope and meaning of the contract. However, Lord Hoffmann's analysis in the Belize Telecom case could obscure the fact that construing the words used and implying additional words are different processes governed by different rules." [emphasis added]
The relevant parts of the contract that provide the context
"X.3 Disputes under these Rules will be deemed to fall into one of three categories, being:
X.3.1. disputes arising from decisions of Commissions or Appeal Boards made pursuant to Rules W.1 to W.83 (Disciplinary) of these Rules ("Disciplinary Disputes");
X.3.2. disputes arising from the exercise of the Board's discretion ("Board Disputes"); and
X.3.3. other disputes arising from these Rules or otherwise."
Section W
"in the absence of any contrary intention, the general gives way to the specific": Bennion, Bailey and Norbury on Statutory Interpretation at [21.4].
"Where the literal meaning of a general enactment covers a situation for which specific provision is made by some other enactment within the Act or instrument, it is presumed that the situation was intended to be dealt with by the specific provision…
This principle is sometimes expressed in the [Latin] maxim …'special provisions override general ones' or the converse…, 'general provisions do not override special ones'. The principle as Lord Cooke of Thorndon said in Effort Shipping Co Ltd v Linden Management SA, The Giannis NK:
''…is not a technical rule peculiar to English statutory interpretation. Rather it represents simple common sense and ordinary usage.''"
The implications of rival constructions
"…But in construing such a contract one starts with the presumption that neither party intends to abandon any remedies for its breach arising by operation of law, and clear express words must be used in order to rebut this presumption."
Conclusion on construction
"Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements…"
"…where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of drafting of the clause…"
Impartiality challenge
The Club's case
Statutory framework
"(1) A party to arbitral proceedings may (upon notice to the other parties and to the tribunal) apply to the court challenging an award in the proceedings on the ground of serious irregularity affecting the tribunal, the proceedings or the award. A party may lose the right to object (see section 73) and the right to apply is subject to the restrictions in section 70(2) and (3).
(2) Serious irregularity means an irregularity of one or more of the following kinds which the court considers has caused or will cause substantial injustice to the applicant-
(a) failure by the tribunal to comply with section 33 (general duty of tribunal);
…
(3) If there is shown to be serious irregularity affecting the tribunal, the proceedings or the award, the court may-
(a) remit the award to the tribunal, in whole or in part, for reconsideration,
(b) set the award aside in whole or in part, or
(c) declare the award to be of no effect, in whole or in part.
The court shall not exercise its power to set aside or to declare an award to be of no effect, in whole or in part, unless it is satisfied that it would be inappropriate to remit the matters in question to the tribunal for reconsideration."
"General duty of the tribunal."
(1) The tribunal shall-
(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and
(b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.
(2) The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it."
The PL's response
i) There is no real possibility on the facts of this case that the tribunal was biased.
ii) The test for bias must be measured at the date of the hearing by reference to the circumstances at the date of the hearing: Halliburton Company v Chubb Bermuda Insurance Ltd [2020] UKSC 48.
iii) The Club had waived any right to object to the process by which individuals were appointed to the Panel from which the arbitrators were selected: Sumukan Ltd v Commonwealth Secretariat (No 2) [2007] EWCA Civ 1148.
Was there a real possibility of bias?
Decision in Halliburton
"49. Impartiality has always been a cardinal duty of a judge and an arbitrator. Thus, the first of the principles set out in section 1 of the 1996 Act is that disputes should be resolved fairly by an impartial tribunal. The duty is now enshrined within section 33 of the 1996 Act…"
"…There is no disagreement as to the relevant test. As Lord Hope of Craighead stated in Porter v Magill [2001] UKHL 67; [2002] 2 AC 357, para 103:
"The question 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 courts have given further guidance on the nature of this judicial construct, the "fair-minded and informed observer" (to whom in this judgment I also refer as "the objective observer"). Thus, in Helow v Secretary of State for the Home Department [2008] UKHL 62; [2008] 1 WLR 2416 , Lord Hope (paras 1-3) explained that the epithet "fair-minded" means that the observer does not reach a judgment on any point before acquiring a full understanding of both sides of the argument. The conclusions which the observer reaches must be justified objectively and the "real possibility" test ensures the exercise of a detached judgment. He continued:
"Then there is the attribute that the observer is 'informed'. It makes the point that, before she takes a balanced approach to any information she is given, she will take the trouble to inform herself on all matters that are relevant. She is the sort of person who takes the trouble to read the text of an article as well as the headlines. She is able to put whatever she has read or seen into its overall social, political or geographic context. She is fair-minded, so she will appreciate that the context forms an important part of the material which she must consider before passing judgment .
I have added the emphasis in this citation because the context in which the test falls to be applied in this appeal is of particular importance. "
"53. Finally, in my consideration of the characteristics of the objective observer, I adopt Kirby J's neat phrase in Johnson v Johnson (2000) 201 CLR 488 , para 53, which members of the House of Lords approved in Helow (above, Lord Hope para 2, Lord Mance para 39) that the fair-minded and informed observer is "neither complacent nor unduly sensitive or suspicious"."
"55. The objective test of the fair-minded and informed observer applies equally to judges and all arbitrators. There is no difference between the test in section 24(1)(a) of the 1996 Act, which speaks of the existence of circumstances "that give rise to justifiable doubts as to [the arbitrator's] impartiality" and the common law test above. But in applying the test to arbitrators it is important to bear in mind the differences in nature and circumstances between judicial determination of disputes and arbitral determination of disputes." [emphasis added]
Other authorities
i) there must be "sufficient guarantees to exclude any legitimate doubt about impartiality"; and
ii) the question of impartiality is "closely linked" to the question of independence.
"Evidence that a temporary judge was dependent for his appointment or its renewal to any extent on decisions taken by the Lord Advocate would be bound to lead to a suspicion that he might favour the prosecutor, albeit unconsciously."
"126. Arbitration involves the conferral of jurisdiction by contract, through the consensus of the parties to the reference. As it is a contract-based jurisdiction, the degree of the independence of the arbitrators from the parties and the extent of their prior knowledge of the circumstances of an event giving rise to the arbitration or the market in which the arbitrating parties operate may, subject to the requirements of the 1996 Act, be determined by the agreement of the parties, express or implied. The 1996 Act contains no provision which directly addresses the arbitrator's independence and prior knowledge, but it imposes the centrally important obligations of fairness and impartiality. Therefore, an arbitrator would be in breach of the requirements of the 1996 Act if his or her lack of independence compromised the duties of fairness and impartiality." [emphasis added]
Submissions
i) the PL proposed and appointed people to the Panel and there was no written policy governing the process or any selection criteria; it was an informal process based on word of mouth and personal connections;
ii) the members lacked security of tenure being appointed for renewable terms of three years and as a result were in a "subordinate position" to the PL for both appointment and reappointment; and
iii) the remuneration paid was significant and even if it was not sufficient of itself to give rise to the real possibility of bias, there were reputational benefits to being on the Panel.
i) The arbitrators in this case were very experienced practitioners and arbitrators with an impeccable reputation; that it is well established that an apparent bias challenge against such experienced arbitrators is not one that is easy to establish.
ii) The Club's case that the arbitrators on the tribunal might find for the PL against the merits presupposes that the value of appointments to the Panel or nomination for cases is consciously or unconsciously perceived by them to be worth the candle of breaching professional obligations as lawyers and of risking one's reputation and practice.
Discussion
i) The test is whether there was a real possibility that the tribunal was biased.
ii) The application of the test requires consideration of not just how the informed observer would view the process of appointment and reappointment of potential arbitrators to the Panel but whether as a result the informed observer would conclude there was a real possibility that the arbitrators in this case were biased.
iii) As stated in Halliburton the informed observer appreciates that context forms an important part of the material which the observer must consider before passing judgment. Accordingly it seems to me not determinative that in other contexts the presence or absence of certain matters have supported a finding of apparent bias. As stated in Halliburton, in applying the test it is important to bear in mind the differences in nature and circumstances between judicial determination of disputes and arbitral determination of disputes.
iv) As to the circumstances of this case, the fair minded and informed observer will appreciate that the context forms an important part of the material which she must consider and in this case the main factors to be considered in the context of this case are the following:
a) the remuneration of the arbitrators;
b) the process by which individuals were appointed to the Panel;
c) the control by the PL of reappointments;
d) the professional reputation and experience of these arbitrators;
e) the possibility that this is a tactical challenge to delay the production of documents.
The remuneration of the arbitrators
i) in Amazeedi v Penner [2018] UKPC 3 a case involving Sir Peter Cresswell, the judge had received no remuneration as a judge in the Qatar Financial Centre but the Privy Council concluded that it was inappropriate for the judge to sit in the Grand Court in the Cayman Islands without having disclosed his position in Qatar.
ii) the fees that were paid to the arbitrators in this case were "far from derisory": in a case in which the standard rates were applied the chair received £1,500 per day and the wing members £750 per day and in this case the parties agreed that the members each received £450 per hour.
"59. Thirdly, a judge is the holder of a public office, is funded by general taxation and has a high degree of security of tenure of office and therefore of remuneration. An arbitrator is nominated to act by one or both of the parties to the arbitration either directly or by submitting names to the appointing body, whether an institution or the court, for appointment. The arbitrator is remunerated by the parties to the arbitration in accordance with the terms set out in the reference, and often is ultimately funded by the losing party. He or she is appointed only for the particular reference and, if arbitral work is a significant part of the arbitrator's professional practice, he or she has a financial interest in obtaining further appointments as arbitrator. Nomination as an arbitrator gives the arbitrator a financial benefit. There are many practitioners whose livelihood depends to a significant degree on acting as arbitrators. This may give an arbitrator an interest in avoiding action which would alienate the parties to an arbitration, for example by assertive case management against the wishes of the legal teams who are presenting their clients' cases…" [emphasis added]
"32. In these circumstances, the Board is in the invidious position of having to decide whether the fair-minded and informed observer, would see a real possibility that the judgment of an experienced judge near the end of his career would be influenced, albeit sub-consciously, by his concurrent appointment which was at the outset still awaiting its completion by swearing in. The fair-minded and informed observer is in this context a figure on the Cayman Islands legal scene. But she or he is a person who will see the whole position in "its overall social, political and geographical context": see para 20 above. She or he must therefore be taken to be aware of the Qatari background, including the personalities involved, their important positions in Qatar and their relationships with each other as well as the opacity of the position relating to the appointment and renewal of members of the relatively recently created Civil and Commercial Court.
33. The key to the resolution of this appeal is not simply that the proceedings in which the judge sat concerned issues arising between investors belonging or close to the Qatari state and the appellant. It is, in the Board's view, that the disputes involved in such proceedings concerned two personalities, Mr Al-Emadi and Mr Kamal who were so closely connected with each other as to make it readily appear unrealistic to distinguish their respective attitudes; that the disputes in which the appellant was engaged up to the date of the winding-up order took place against a background of personal threats, one of which (by Mr Longmate on 8 December 2011) associated the appellant's resistance to the winding-up order with a challenge to the state of Qatar itself; and that first Mr Kamal and then from 26 June 2013 Mr Al-Emadi, was closely concerned, to an extent which remains opaque, in at least some aspects of the arrangements by or under which the judge was in the process of becoming a new part-time judge of the relatively new Qatar Civil and Commercial Court."
The process by which individuals were appointed to the Panel
"…There may also be circumstances in which because of the custom and practice of specialist arbitrators in specific fields, such as maritime, sports and commodities and maybe others, such multiple appointments are a part of the process which is known to and accepted by the participants."
"67. The fair-minded and informed observer would also be aware that in international arbitration the parties to an arbitration and their legal advisers may often have only limited knowledge of the reputation and experience of a professional who is appointed by an institution or by the court to chair their arbitration. While many parties and their advisers who are engaged in high value international arbitrations devote considerable resources to researching the background of people who might be suitable for selection as party-appointed arbitrators or as nominees for third party appointment, there is no basis for assuming that that practice is universal. The professional reputation and experience of an individual arbitrator is a relevant consideration for the objective observer when assessing whether there is apparent bias as an established reputation for integrity and wide experience in arbitration may make any doubts harder to justify. But the weight which the fair-minded and informed observer should give to that consideration will depend upon the circumstances of the arbitration and whether, objectively and as a generality, one could expect people who enter into references of that nature to be informed about the experience and past performance of arbitrators. In the context of many international arbitrations, it is likely to be a factor of only limited weight. The weight of that consideration may also be reduced if the circumstances give rise to a material risk of unconscious bias on the part of a person of the utmost integrity: Almazeedi v Penner [2018] UKPC 3 at [1], per Lord Mance JSC." [emphasis added]
The control by the PL of reappointments
The possibility that this is a tactical challenge
"68. On other hand, the objective observer is alive to the possibility of opportunistic or tactical challenges. Parties engage in arbitration to win. Their legal advisers present their cases to the best of their ability, and this pursuit can include making tactical objections or challenges in the hope of having their dispute determined by a tribunal which might, without any question of bias, be more predisposed towards their view or simply to delay an arbitral determination…"
Conclusion on apparent bias
The time for assessing impartiality
"As Lord Clarke said in Rimmer v HM Advocate (unreported) 23 May 2001, the question of impartiality, actual or perceived, has to be judged from the very moment when the judge or tribunal becomes first seized of the case."
"62. The essential point on which he based his main argument was that the question as to whether the Lord Advocate's act was unlawful had to be tested at the date when the challenge was made. This had to be done in the light of all the facts and circumstances which were known to exist at that time. All there was in this case was a perception that the temporary sheriffs lacked independence. But the reality was that they did not lack independence in fact. Their judgment was unaffected, and there were no grounds for saying that the verdicts of guilty were unsafe or the sentences imposed were excessive. The appellants were unable to show that they would derive any real benefit from being retried or sentenced again. He invited us to hold that the decisive factor in these cases was not that the right to an independent and impartial judge had been waived because no plea in bar of trial had been taken at the outset, but that the use of temporary sheriffs in these cases made no difference in fact to the result.
63. In my opinion this argument overlooks the fundamental importance of the Convention right to an independent and impartial tribunal. These two concepts are closely linked, and the appearance of independence and impartiality is just as important as the question whether these qualities exist in fact. Justice must not only be done, it must be seen to be done. The function of the Convention right is not only to secure that the tribunal is free from any actual personal bias or prejudice. It requires this matter to be viewed objectively. The aim is to exclude any legitimate doubt as to the tribunal's independence and impartiality: McGonnell v United Kingdom 30 EHRR 289 , 306, para 48, quoting Findlay v United Kingdom 24 EHRR 221 , 245, para 73. As Lord Clarke said in Rimmer v HM Advocate (unreported) 23 May 2001, the question of impartiality, actual or perceived, has to be judged from the very moment when the judge or tribunal becomes first seized of the case. It is a question which, at least in a case of perceived impartiality, stands apart from any questions that may be raised about the character, quality or effect of any decisions which he takes or acts which he performs in the proceedings." [emphasis added]
"70. An arbitrator, like a judge, must always be alive to the possibility of apparent bias and of actual but unconscious bias. The possibility of unconscious bias on the part of a decision-maker is known, but its occurrence in a particular case is not. The allegation, which is advanced in this case, of apparent unconscious bias is difficult to establish and to refute. One way in which an arbitrator can avoid the appearance of bias is by disclosing matters which could arguably be said to give rise to a real possibility of bias. Such disclosure allows the parties to consider the disclosed circumstances, obtain necessary advice, and decide whether there is a problem with the involvement of the arbitrator in the reference and, if so, whether to object or otherwise to act to mitigate or remove the problem: see Almazeedi (above) para 34; Davidson v Scottish Ministers (No 2) 2005 1 SC (HL) 7 In the latter case, Lord Hope stated (para 54):
"the best safeguard against a challenge after the event, when the decision is known to be adverse to the litigant, lies in the opportunity of making a disclosure before the hearing starts. That is the proper time for testing the tribunal's impartiality. Fairness requires that the quality of impartiality is there from the beginning, and a proper disclosure at the beginning is in itself a badge of impartiality."
That statement mutatis mutandis applies to the arbitrator as much as to the judge. In Davidson (above, para 19) Lord Bingham of Cornhill spoke with approval of the practice of judges to "disclose a previous activity or association which would or might provide a basis for a reasonable apprehension of lack of impartiality" (emphasis added). When, on being asked to accept an appointment, an arbitrator knows of a matter which ought to be disclosed to the parties to the reference, prompt disclosure to those parties of that matter provides the safeguard as the quality of impartiality is shown to have been there from the beginning. But the obligation of impartiality continues throughout the reference and the emergence during the currency of the reference of matters which ought to be disclosed means that an arbitrator's prompt disclosure of those matters can enable him or her to maintain what Lord Hope calls the "badge of impartiality"." [emphasis added]
"121. What is the time by reference to which the court must assess the question of the possibility of bias? This question is, in my view, of central importance to the outcome of this appeal. As we have seen, section 24(1)(a) empowers the court to remove an arbitrator on the ground that circumstances exist that give rise to justifiable doubts as to his impartiality. The use of the present tense ("exist") directs the court to assess the circumstances as they exist at the date of the hearing of the application to remove the arbitrator by asking whether the fair-minded and informed observer, having considered the facts then available to him or her, would conclude that there is a possibility that the arbitrator is biased.
"122. There is support for this view in the case law concerning the application of the test in other circumstances. In R v Gough [1993] AC 646 , Lord Goff of Chieveley stated (p 670E) that the court had to ascertain the relevant circumstances "from the available evidence, knowledge of which would not necessarily be available to an observer in court at the relevant time". In AT&T Corpn v Saudi Cable Co [2000] 2 Lloyd's Rep 127 the Court of Appeal (Lord Woolf MR, Potter and May LJJ) dealt with an application for the removal of an arbitrator as chairman of an ICC Tribunal on the ground of apparent bias. Lord Woolf MR in para 42 of his judgment described the court's task in this way:
"The court considers on all the material which is placed before it whether there is any real danger of unconscious bias on the part of the decision maker. This is the case irrespective of whether it is a judge or an arbitrator who is the subject of the allegation of bias."
Lord Woolf MR's formulation of the test pre-dated the refinement of Lord Goff's formulation by Lord Hope in Porter v Magill [2002] 2 AC 357 but that refinement is not material to the point for which I cite this passage. In R (Condron) v National Assembly for Wales [2007] LGR 87 the Court of Appeal (Ward, Wall and Richards LJJ) addressed a challenge to a decision to allow a planning application taken by the Planning Decision Committee of the Assembly on the basis of apparent bias arising from a remark made by a member of the committee to an objector on the day before the decision. After the decision, the objectors to the application complained to the Commissioner for Standards who produced a report several months later which stated that he found no evidence of bias in the members' consideration of the application. The judge disregarded evidence of the Commissioner's assessment of what had occurred at the meeting of the committee, because it would not have been available to the objectors or the hypothetical observer at the time of the decision. Richards LJ, with whom the other Lord Justices agreed, disagreed with the judge's approach and stated (para 50): "The court must look at all the circumstances as they appear from the material before it, not just at the facts known to the objectors or available to the hypothetical observer at the time of the decision." At para 63 of AT&T Corpn Potter LJ in his concurring judgment described the court's task as embodying the standards of the informed observer viewing the matter at the relevant time, "which is of course the time when the matter comes before the court". "
123. In the present appeal the Court of Appeal was correct in para 95 of its judgment to apply the test for apparent bias by asking whether "at the time of the hearing to remove" the circumstances would have led the fair-minded and informed observer to conclude that there was in fact a real possibility of bias." [emphasis added]
Conclusion on the time for assessing impartiality
Waiver
"[9]…This was a commercial contract. True, Sumukan had no choice as to the terms of the contract so far as arbitration was concerned but that is a common feature of and the reality of many commercial contracts. Sumukan are not a consumer with the protection of consumer legislation and are bound by the terms of the contract they made. It follows they were bound to accept a tribunal appointed in accordance with the relevant statute to which the term refers. As we will see there may be room for argument as to which that statute was, and what it requires. I will come to that. But what seems to me to flow from that first point is important. If and in so far as Sumukan would seek to attack the award on the basis that a procedure in accordance with the statute could not produce an impartial tribunal, and that on that basis there was a serious irregularity (relying on section 68(2)(a) taken together with section 33 of the 1996 Act), that attack is doomed to failure. Having agreed to it, they must be taken to have waived any objection." [emphasis added]
Conclusion on waiver