Wednesday, 7 April 2021

Newcastle United FCL v The Football Association Premier League Ltd

[2021] EWHC 349 (Comm)

Last year, the Supreme Court in the Halliburton case, set out a number of principles when it came to the test for arbitrator bias. HHJ Pelling QC had to apply some of those principles, in considering an application to remove an arbitrator under s.24(1) (a) of the Arbitration Act 1996. A dispute arose in relation to Section A of the PLL rules. Two weeks after the arbitrator nominated by FAPL confirmed that no circumstances existed that gave rise to justifiable doubts as to their impartiality, the FAPL lawyers said that a number of matters that had not been disclosed, namely that the arbitrator had advised PLL four times in the past, including in one instance on Section F of the PLL Rules, (although all four were more than two years before this appointment) and that FAPL’s lawyers had been involved in 12 arbitrations with the same arbitrator, having appointed the arbitrator in question in three of those arbitrations (of which two were after the appointment in question). 

NUFC said that the information should have been disclosed upon appointment, and invited the arbitrator to recuse themselves, an invitation which was declined. NUFC duly applied to remove the arbitrator including on the grounds that a fair-minded and informed observer would conclude that there was a real possibility the arbitrator was biased. HHJ Pelling QC made reference to the IBA Guidelines on Conflicts of Interest, confirming the comments made in the Halliburton case that, whilst they were not binding, they were helped to set a “practical benchmark” against which any potential bias could be judged.

The Judge considered that had the earlier advice on Section F been concerned with the very issue that arose in the current arbitration then it was at least probable that the reasonable bystander test would have been satisfied without further enquiry. However, here that advice was concerned with an issue that did not arise. The longer the gap between being instructed to give advice to a client and the appointment under challenge, the less likely it would be that the relationship would cause the fair-minded and informed observer, to conclude that there was a real possibility of bias. Further, the IBA Rules did not mandate the disclosure of the advice as it was provided over three years earlier on a different issue. That said, the two more recent instructions in 2018 should have been disclosed, even though they did not relate to the issues in the arbitration or show any ongoing relationship. 

When it came to the arbitrator appointments, HHJ Pelling QC the Court noted that the pool of experienced and qualified sports’ arbitrators was a small one. This may mean that the decision is distinguishable when it comes to construction disputes. However that said, the IBA Guidelines did not require disclosure of the prior appointments, because the arbitrator had not been appointed more than three times in the three years prior to this arbitration. Further, there was no dispute that the arbitrator was not financially dependent on work from PLL or its solicitors.

Finally, a question was also raised about a more practical issue. The arbitrator had needed to seek PLL’s consent to disclose the earlier advice and could not therefore be criticised for doing so without copying-in NUFC’s lawyers. The emails might have resulted in a breach of confidence. However, there was one private email asking PLL’s solicitors about their client’s position on whether the arbitrator should recuse themselves which the Judge described as “an error of judgment and ought not have occurred”. However, ultimately HHJ Pelling QC decided that looking at the overall picture, including the reputation of the arbitrator (a relevant factor in itself) “the weight of the whole does not exceed the sum of its parts” and there was no real risk of bias in the eyes of a fair-minded and informed observer.

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