Arbitration – risk of bias

Citation

Dowden, M. (2001), "Arbitration – risk of bias", Journal of Property Investment & Finance, Vol. 19 No. 6. https://doi.org/10.1108/jpif.2001.11219fab.006

Arbitration – risk of bias

Arbitration – risk of bias

In Save and Prosper Pensions Limited v. (1) Homebase and (2) Peter J F Clark (2000) Lawtel a successful application was made under section 24(1)(a) of the Arbitration Act 1996 to remove the second respondent as arbitrator in respect of a rent review relating to premises leased to Homebase by the applicant. Whilst there was no suggestion that the arbitrator was actually biased or prejudiced the Court held that there was a real danger that an arbitrator in the circumstances might give a biased or prejudiced decision.

The firm of which the arbitrator was a salaried partner had been instructed by an associated company of Homebase in respect of other premises. When asked by the President of RICS whether there was any relevant connection with the parties Mr Clark did not disclose that other matter because he believed that the association between the companies was too remote to give rise to any conflict of interest. However, there were in fact close connections between the companies. In particular, the property teams of the two companies reported to the same directors and shared a common e-mail system.

The Court held that the test under the Arbitration Act was the same as the objective test under common law in respect of disqualification or bias in respect of judges (applied, for example, to Lord Hoffman in the Pinochet case). Consequently, in the absence of disclosure and agreement there was a real danger of a biased or prejudiced decision and so the arbitrator was removed.