ASM SHIPPING LTD V HARRIS

[2007] EWHC 1513 (Comm), Queen’s Bench Division, Commercial Court, Mr Justice Andrew Smith, 28 June 2007

Arbitration – Application for removal of arbitrators – Whether justifiable doubts as to impartiality of arbitrators – Whether objection made in time – Arbitration Act 1996, sections 24 and 73

This case arose from a charterparty dispute in which the owners claimed freight and demurrage and the charterers claimed damages. Two arbitrators, the present respondents, were appointed and they made a partial award in favour of the owners. Subsequently a third arbitrator, DM, was appointed, and they published a partial award in favour of the charterers. That award was challenged on the ground that DM should have recused himself in the light of the fact that he had acted as advocate in proceedings which affected the owners’ primary witness. Morison J held that DM should have recused himself but that the award was valid because the owners had lost the right to challenge it. Subsequently DM did recuse himself but the remaining arbitrators did not. The owners suggested that a new third arbitrator should be a retired judge, but the arbitrators stated their preference for a particular QC. The owners applied to have them removed on the ground that they had aligned themselves with DM’s position and that they had demonstrated unconscious bias in not acceding to the owners’ suggestions as to a replacement third arbitrator. The ground of application was section 24(1)(a), namely that there were justifiable doubts about the arbitrators’ impartiality, particularly given that the owners’ witness would again be giving evidence in the remaining stages of the arbitration. It was held that the court had no jurisdiction to remove the arbitrators. (1) No objection was made to the two arbitrators remaining in office until well after the relevant facts were known to the owners: those issues could not, therefore, be raised at a later stage by reason of section 73 of the Arbitration Act 1996. (2) There was nothing which gave rise to justified doubts about the impartiality of the two arbitrators.