¹ See Konner, J, ‘Fred Friendly 1915–1998,’ Columbia Journalism Review (05/06 1998), publisher's note.Google Scholar

² Redfern, A and Hunter, MThe Law and Practice of International Commercial Arbitration (London: Sweet & Maxwell 1999), at 220–1.Google ScholarSee also Bishop, D and Reed, L, ‘Practical Guidelines for Interviewing, Selecting and Challenging Party-Appointed Arbitrators in International Commercial Arbitration’ 14 (1998) 395Arbitration International. <http://www.kluwerarbitration.com/arbitration/arb/home/ipn/default.asp?ipn=9633>.CrossRefGoogle Scholar

³ Above n 2, at 400. IBA uses the wording ‘bias/conflict of interest’ to cover these issues.Google Scholar

⁴ Commonwealth Coatings Corp v Continental Casualty Co, 393 US 145 (1968) at 149. See discussion below on the dilution of Justice Black's position by the Court's concurring opinion and lower court interpretations of the case in the 1980s and 1990s.Google Scholar

⁵ The majority of international arbitral tribunals are composed of lawyers who, while they may have acted previously in cases involving a particular industry, do not necessarily have experience as businessmen in any particular industry. It is doubtful that a shortage exists of civil practitioners in England and the United States who are capable of producing well-reasoned arbitral awards.Google Scholar

⁶ Justice Black's reasoning that ‘we should, if anything, be even more scrupulous to safeguard the impartiality of arbitrators than judges, since the former have completely free rein to decide the law as well as the facts and are not subject to appellate review’, should prompt the international arbitration community to adopt practices that reach beyond mere survival of national court scrutiny.Google Scholar

⁷ In the case of ad hoc arbitration under the UNCITRAL Rules, the appointing institution, under Art 12, makes the decision when a challenge is contested.Google Scholar

^{8 1}.1 of the IBA Draft 2002.Google Scholar

⁹ See LCIA Rules, Art 10.3 (an arbitrator may be challenged ‘if circumstances exist that give rise to justifiable doubts as to his impartiality or independence’); AAA-International Rules, Arts 7.1 and 8.1 (an arbitrator shall disclose any circumstance likely to give rise to justifiable doubts as to impartiality or independence; a party may challenge whenever circumstances give rise to justifiable doubts as to impartiality or independence); ‘SCC Rules, Art 17(2) (a ‘person asked to accept an appointment as arbitrator must disclose any circumstances likely to give rise to justifiable doubts as to his impartiality and independence’); UNCITRAL Rules, Arts 9 and 10 (same as the AAA-International Rules noted above).Google Scholar

¹⁰ [2000] 2 All ER 625 (Comm). Lord Woolf gave the principal judgment. Lord Justice Potter and Lord Justice May wrote concurring judgments.Google Scholar

¹¹ The Arbitration Act 1996 has largely replaced the 1950 Act (and other previous arbitration legislation) for arbitrations commenced from 31 Jan 1997.Google Scholar

¹² Above n 11, at 631. The chairman's attitude was curious in this regard: experienced litigators are usually aware that it is common for a client to be alarmed by the prospect, and certainly by the actuality, of its lawyer's representation of a competitor company. Such alarm can lead to the termination of the client relationship. Lord May, for one, accepted that AT&T had good reason to challenge the chairman's independence because of his relationship with a competitor (646).Google Scholar

¹³ Arbitration Act 1996, s 24(l)(a). It provides that a party may apply to the court to remove an arbitrator on the grounds ‘that circumstances exist that give rise to justifiable doubts as to his impartiality’.Google Scholar

¹⁴ Above n 11 at 638.Google Scholar

¹⁵ Kendall, J, ‘Barristers, Independence and Disclosure Revisited’ 16 Arbitration International (2000) 343 at 348–9, contends that there ‘cannot be different standards for arbitrators, either lower or higher. It has been suggested that the standard should be higher because of the binding character and finality of awards. This misses the point. The standard should be effective to disqualify where real danger of bias is proved. Either the standard is effective to achieve that or it is not.’ However, as the standard is ‘real danger of bias’, J Kendall's contention means nothing more than the standard should be effective where the standard is proved. This begs the question: assuming finality, assuming a standard lower than ‘real danger’ (such as ‘appearance of bias’), and assuming the lower standard does not mean unreal danger, should disqualification of an arbitrator be the lower standard because even mere appearance of bias is significant where no review exists? If the alternative to ‘real danger’ is, in substance, no danger, then the lower standard can safely be jettisoned. But whether the danger is ‘real’ cannot be known, if at all, until an award is issued. It is extraordinarily difficult to prove the existence of bias in an award, as many US judges have conceded.CrossRefGoogle Scholar

¹⁶ Above n 11, at 638.Google Scholar

¹⁷ Lord Justice May suggests this in his concurring judgment, discussed below.Google Scholar

¹⁸ Above n ll, at 639.Google Scholar

¹⁹ Ibid, at 646. The phrase ‘eyes of the parties’ is from Art 2.7 of the ICC Rules 1988.

²⁰ Laker Airways Incorporated v FLS Aerospace Limited [1999] 2 Lloyd's Rep 45.Google Scholar

²¹ This case already has prompted extensive commentary, and the present writers do not propose to discuss further the judgment of Mr Justice (now Lord Justice) Rix.Google ScholarSee Merjian, AH, ‘Caveat Arbiter,’ 17 Journal of International Arbitration (2000) 31,CrossRefGoogle ScholarKendall, J, ‘Barristers, Independence and Disclosure Revisited’ 16 Arbitration International (2000) 343 and the debate in KVSK Nathan, ‘Barristers in Chambers in England—Paragons of Virtue or Just Being Boys?’ Mealey's International Arbitration Report (1999) 14(12) 23CrossRefGoogle Scholarand Malek, A and Quest, D, ‘Reality of Barrister Arbitrators—A Response to Dr KVSK Nathan’, Mealey's International Arbitration Report (2000) 15(1)22.Google Scholar

²² Unreported case 1 Nov 1989. There are no published materials at all in the UK. However, there was an anti trust case brought in Arizona, the USA, see PPG Industries Inc, v Pilkington plc, Libbey-Owens-Ford Co. 825 F Supp 1465; 1993 US Dist. LEXIS 9524; 1993–2 Trade Cas. (CCH) P70, 368 and PPG Industries Inc, v Pilkington, plc, et al 1994 U.S. App. (9th Cir) LEXIS 14427.Google Scholar

²³ The challenge in Laker Airways was brought under s 24(1) of the Arbitration Act 1996 (‘justifiable doubts as to his [the arbitrator's] impartiality’), AT&T whereas in the challenge proceeded both under the common law (bias) and the Arbitration Act 1950 (misconduct). In his concurring judgment in AT&T (at 645), Lord Justice Potter stated that the question of whether the legislature introduced through Art 24(1) a statutory definition of bias different from the real danger test ‘remains for future argument’. However, in light of Lord Woolf's express approval of Mr Justice Rix's application of the real danger test, it would seem that there is little room for future argument that the ‘real danger’ test does not apply under the 1996 Act. See also Save and Prosper Pensions Ltd v Homebase Ltd [2001] L & TR 11, in which Judge Rich QC applied the ‘real danger of bias’ test in a challenge under s 24(1) of the Arbitration Act 1996.Google Scholar

²⁴ See Merjian, , above n 18, at 31.Google Scholar

²⁵ Different chambers have different arrangements for their cost sharing. For example, they may involve two lawyers sharing the cost of common overheads, eg, rent, secretarial and administrative arrangements or they may extend to a much larger office shared by a number of lawyers who may share not only the rent and the secretarial expenses, but may also employ junior lawyers who work for a number of them. See M Lee, ‘The ICC Perspective’ the ICIA AMINZ Arbitration Seminar, at 49. In his article above n 22, Dr KVSK Nathan questioned whether the confusing relationship between members of chambers would be viewed as a cosy arrangement among ambitious lawyers (at 24). He pointed out that barristers consider themselves as belonging to a specific Chambers, rather than a set of Chambers, and ‘They are much closer knit group than a New York law firm or a firm of London solicitors who employ far more lawyers than the average Chambers. To say that the barristers in the same Chambers are independent of each other is far from the truth’ (at 25). However, in the later issue of Mealey's, Ali Malek QC and David Quest argued for Rix J decision, above n 22.Google Scholar

²⁶ Above n 21, at 48.Google Scholar

²⁷ Above n 26, at 56.Google Scholar

²⁸ Above n 2 at 49.Google Scholar

²⁹ In order to resolve the problem the Working Group added three lists of possible situations. White list is a list of situations where the Working Group is firmly of the opinion that an arbitrator is free to act. Black list contains those situations where the Working Group believes that the arbitrators shall not act. In between there is a Grey list, where the Working Group is of the opinion of the arbitrators shall declare the conflicts, as those situations may give the parties justifiable doubts as to the arbitrator's impartiality and independence.Google Scholar

^{30 6}.4.3 of the Draft. It is also interesting to note that the circumstances which ‘the arbitrator is a member of the same law firm as the counsel to one of the parties’ is classified under the Black List.Google Scholar

³¹ Keer, Stephanie E and Naimark, Richard W, ‘International Private Commercial Arbitration:Expectations and Perceptions of Attorneys and Business People at the Beginning of the Case’ 30(5) International Business Lawyer, 203.Google Scholar

³² Commonwealth Coatings Corp v Continental Casualty Co, 393 US 145 (1968).Google Scholar

³³ The chairman had rendered services on the very projects involved in the arbitration.Google Scholar

³⁴ Above n 33, at 149.Google Scholar

³⁵ Ibid.

³⁶ Rule 18 provided for the arbitrator ‘to disclose any circumstances likely to create a presumption of bias or which he believes might disqualify him as an impartial Arbitrator’. The 33rd Canon provided that in pending or prospective litigation before him a judge should be ‘careful to avoid such action as may reasonably tend to awaken the suspicion that his social or business relations or friendships, constitute an element in influencing his judicial conduct’.Google Scholar

³⁷ Above n 33, at 149.Google Scholar

³⁸ ANR Coal Co v Cogentrix of North Carolina, Inc, 173 F 3d 493, 499, at n 3 (4th Cir 1999).Google Scholar

³⁹ Above n 33, at 150–2.Google Scholar

⁴⁰ Ibid.

⁴¹ Ibid.

⁴² Cook Industries, Inc v C Itoh & Co (America) Inc, 449 F 2d 106, 107–8 (2d Cir 1971), cert denied, 405 US 921, 92 S Ct 957, 30 L Ed 2d 792 (1972).Google Scholar

⁴³ Cook Industries, Inc v C ltoh & Co (America) Inc, 449 F 2d 106, 107–8 (2d Cir 1971), cert denied, 405 US 921, 92 S Ct 957, 30 L Ed 2d 792 (1972) at 108.Google Scholar

⁴⁴ Ibid, at 109.

⁴⁵ Ibid.

^{46 714} F 2d 673 (7th Cir 1983), cert denied, 464 US 1009 (1983).Google Scholar

⁴⁷ Under Fed R Civ P 60(b).Google Scholar

⁴⁸ Above n 47, at 676–7.Google Scholar

⁴⁹ Ibid, at 679.

⁵⁰ Ibid, at 680.

⁵¹ Ibid.

⁵² See Rau, AS, ‘On Integrity in Private Judging’ 14 Arbitration International (1998) 157, which expressly takes as its subject Judge Posner's ‘tradeoff between impartiality and expertise’, and appears to offer a defence of it on the grounds that arbitration should be understood primarily ‘through the lenses of contract rather than of adjudication’. In the present writers' view, Professor Rau's article is flawed in the same manner as Judge Posner's Merit Ins opinion: it asserts that the contracting parties to arbitration prefer a hearing that is more a form of ‘private self-government’ than a form of private adjudication, so that in arbitration, we are ‘merely searching’ for the ‘rules of the game’, and therefore ‘economic regulation’ instead of morality should be the primary concern. This theory has no empirical foundation.CrossRefGoogle Scholar

^{53 748} F 2d 79 (2d Cir 1984).Google Scholar

⁵⁴ Ibid, at 83–4.

⁵⁵ Ibid, at 84.

⁵⁶ Ibid, at 85 n 6.

⁵⁷ The essential identity of the standards is apparent from the 1974 addition to 28 USC s 455. Subsection (a) provides that ‘[a]ny justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned’ (emphasis added). See also Liteky v United States, 510 US 540, 553 (1994) (‘subsection (a) deals with the objective appearance of partiality) (emphasis in the original). Justice Kennedy's concurring opinion in Liteky explained that, ‘[f]or present purposes, it should suffice to say that s 455(a) is triggered by an attitude or state of mind so resistant to fair and dispassionate inquiry as to cause a party, the public, or a reviewing court to have reasonable grounds to question the neutral and objective character of a judge's rulings or findings. I think all would agree that a high threshold is required to satisfy this standard’ (emphasis added, at 557). The US judicial standard, then, is ‘reasonable suspicion’; as this is clearly something higher than mere appearance and lower than actual bias, it is also similar to ‘real danger’—as Lord Woolf observed in AT&T, above.Google Scholar

⁵⁸ Above n 39.Google Scholar

⁵⁹ Ibid, at 496.

⁶⁰ Above n 39, at 498.Google Scholar

⁶¹ Ibid, at 500. The Fourth Circuit set out a four-factor test for the determination of whether a claimant has demonstrated ‘evident partiality’: (i) the extent or character of the arbitrator's personal interest, pecuniary or otherwise; (ii) the ‘directness’ of the relationship between the arbitrator and the allegedly favoured party; (iii) the connection of that relationship to the arbitration; and (iv) the proximity in time between the relationship and the arbitral proceedings.

⁶² See also Kiernan v Piper Jaffray Co, 137 F 3d 588 (8th Cir 1998), where appellants decided not to challenge an arbitrator pre-award (but post-hearing), upon learning that one of the arbitrators had failed to disclose details regarding her relationships with the other party. Relying on Cook Industries and Merit Ins, the court held that appellants had waived their ‘evident partiality’ claim, and rejected their contentions that they did not have enough information to have knowingly waived their objection and that the arbitral institution (National Association of Securities Dealers) gave them no meaningful option at the time. The court found that ‘while they [appellants] did not have full knowledge of all the relationships to which they now object, they did have concerns about Powers' impartiality and yet chose to have her remain on the panel rather than spend time and money investigating further until losing the arbitration’ (at 592–3). Appellants, it should be noted, had proposed that the other two arbitrators decide the case, but the opposing party refused.Google Scholar

⁶³ Above n 2, at 255.Google Scholar

⁶⁴ LordTenterden, CJ in Garnett v Ferrand (1827) 6 B & C 611, at 625–6 [1824–34] All ER Rep 244, at 246.Google Scholar

⁶⁵ [1975] QB 118, [1974] 3 All ER 776 [1974] 3 WLR 459, 139 JP 2Google Scholar

⁶⁶ Ibid.

⁶⁷ Lopes, LJ in Royal Aquarium and Summer and Winter Garden Society v Parkinson [1892] 1 QB 431, at 451, [1891–4] All ER Rep 429, at 436.Google Scholar

⁶⁸ [1974] AC 727.Google Scholar

⁶⁹ [1977] AC 405.Google Scholar

⁷⁰ Above n 69, at 757.Google Scholar

⁷¹ Ibid.

⁷² Ibid, at 758.

⁷³ Above n 70.Google Scholar

⁷⁴ Ibid, see Lord Simon and Lord Wheatley, at 423 and 428.

⁷⁵ Above n 70, at 419.Google Scholar

⁷⁶ [1985] 2 All ER 161, 274 EG 143 [1985] 1 EGLR 86.Google Scholar

⁷⁷ DAC Report, at 296.Google Scholar

⁷⁸ Above n 70, at 420.Google Scholar

⁷⁹ Corey v New York Stock Exchange 691 F 2d 1205. The court said: ‘Extension of arbitral immunity to encompass boards which sponsor arbitration is a natural and necessary product of the policies underlying arbitral immunity; otherwise the immunity extended to arbitrators is illusionary. It would be of little value to the whole arbitral procedure to merely shift the liability to the sponsoring association’ (at 1211).Google Scholar

^{80 80} US (13 Wall) 335, 20 L Ed 646 (1872).Google Scholar

⁸¹ Ibid, at 649–50.

⁸² Gahn v International Union Ladies' Garment Workers Union 311 F 2 d 113 (3rd Cir 1962), at 114–15.Google Scholar

⁸³ Hoosack Tunnel, Dock and Elevator Co v O'Brien 137 Mass 424 (1984), at 426.Google Scholar

⁸⁴ Above n 81, at 347.Google Scholar

⁸⁵ 3 Best & Smith, 576. See also Bradley v Fisher above n 81, at 349.Google Scholar

⁸⁶ 3 Best & Smith, 576, at 348.Google Scholar

⁸⁷ Ibid.

⁸⁸ Ibid.

⁸⁹ Above n 84, at 426.Google Scholar

⁹⁰ Ibid.

⁹¹ Above n 83.Google Scholar

⁹² Ibid, at 115. Also see Cooper v O'Connor, 69 App DC 100, 99 F2d 135, 141 (D C Cir 1938); Hohensee v Goon Squad, 171 F Supp 562, 568, 569 nM.D.Pa 1959); Hoosac Tunnel Dock & Elevator Co v O'Brien, 137 Mass. 424, 426 (1884); Craviolini v Scholer & Fuller Associated Architects, 89 Ariz 24, 357 P2d 611, 613 (1960).

⁹³ 278 F Supp 393; 1968 US Dist.Google Scholar

⁹⁴ Ibid, at 397.

⁹⁵ Ibid.

⁹⁶ Above n 80.Google Scholar

⁹⁷ Ibid, at 1211.

⁹⁸ 550 F Supp 1389; 1982 US Dist; 97 Lab Cas (CCH) P10, 136.Google Scholar

⁹⁹ Above n 83.Google Scholar

¹⁰⁰ Above n 80.Google Scholar

¹⁰¹ Above n 99, at 1391.Google Scholar

¹⁰² The prevailing party in the arbitration may have the opportunity to recover all or part of the arbitral tribunal's fees.Google Scholar

¹⁰³ This phrase is from a ‘non-legal’ source: Lane, C, ‘The Tainted Sources of “The Bell Curve”’ The New York Review of Books (1 12 1994), at 18.Google Scholar

¹⁰⁴ Merlin, , 9 ‘Recueil Alphabétique de Questions de Droif’ (4th edn 1829), at 144;Google Scholartranslation see Samuel, A, Jurisdictional Problems in International Commercial Arbitration: A Study of Belgian, Dutch, English, French, Swedish, Swiss, US and West German Law (Zürich and Schulthess: Polygraphischer Verlag Zurich, 1989), at 34.Google Scholar

¹⁰⁵ Ibid, at 144. See J Lew, The Applicable Law in International Commercial Arbitration (Dobbs Ferry, NY: Oceana Publications, 1978), at 54.

¹⁰⁶ Foelix, J, Traite du Droit International Prive (2nd edn 1847), at 461; translation see Samuel, above n 92 at 35.Google Scholar

¹⁰⁷ [1986] 2 Lloyd's Rep 301.Google Scholar

¹⁰⁸ Ibid, at 306.

¹⁰⁹ ibid.

¹¹⁰ Mustill, M and Boyd, S, The Law and Practice of Commercial Arbitration in England (2nd edn 1989), at 223.Google Scholar

¹¹¹ Hong Kong Ordinance 1996, ch 341, s 2GM.Google Scholar

¹¹² Above n 115, at 223.Google Scholar

¹¹³ Moutulsky, , Ecrits, , Dalloz, , Paris (1974) at 14; translation see Samuel, above n 92, at 55.Google Scholar

¹¹⁴ Ibid.

¹¹⁵ Mann, , ‘Lex Facit Arbitrum’, in Sanders, P (ed), International Arbitration: Liber Amicorum for Martin Domke (1967), at 106.Google Scholar

¹¹⁶ Niboyet, , Traité de Droit International Privé Français (Paris, 1950), para 1985, at 137; cited from Lew, above n 93 at 53. Although upholding the status theory of arbitrator, Lord Mustill does not agree with the analogy between arbitrator and judges, above n 115 at 223.Google Scholar

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