ASM Shipping v. TTMI (S.68 Appn.) CofA
DMC Category Rating: Confirmed
This case note is based on a text originally written by Hew Dundas, Chartered Arbitrator, CEDR-Accredited Mediator and Expert Determiner, who is a Contributor to this website.
On the first day of the Hearing in the present arbitration, just before he commenced giving evidence, M claimed to recognise Mr Matthews. Owners requested Mr Matthews to recuse himself (stand down) on grounds of his prior involvement with WH and M, and the consequent risk of bias. Having considered his position overnight, Mr Matthews issued a statement to the parties at the beginning of the second day of the arbitration, in which he set out the reasons why he did think it either appropriate or necessary for him to stand down. ASM protested but allowed the hearing to continue before all three arbitrators. Eventually the tribunal issued its award, which ASM took up. It was substantially in favour of TTMI.
ASM then applied to the court under s.68 of the Arbitration Act 1996, to have the award set aside on the ground of apparent bias. The judge agreed with ASM on the issue of ‘bias’, holding that Mr Matthews should have recused himself, but held that ASM’s challenge failed by virtue of s.73 of the Act, by reason of their failure to raise the objection without delay They had, in effect, waived or lost their right to object by continuing to take part in the arbitration (albeit under notice of objection) and taking up the Award. The judge stated (at §49): "Owners were faced with a straight choice: come to the court and complain and seek Mr Matthews’ removal as a decision maker or let the matter drop. They could not get themselves into a position whereby if the award was in their favour, they would drop their objection but make it in the event that the award went against them. A 'heads we win and tails you lose' position is not permissible in law as [s.73] makes clear." The judge dismissed ASM’s s.68 application accordingly and refused permission to appeal, in reliance on s.68(4) of the Act. This provides:
ASM then applied to the Court of Appeal for permission to appeal from the dismissal of its High Court application. The question before the Court was whether, given the provisions of s.68(4), it had jurisdiction to entertain an application for permission to appeal from the substantive decision of the judge. ASM contended that the judge's waiver holding was so clearly and obviously wrong that one of two consequences must follow: first, there had been no s.68 decision at all either for that reason or because, while waiver might operate as a defence to the claim of a serious irregularity, a decision on waiver was a decision on a defence to the assertion of serious irregularity not a decision on the assertion itself and, secondly, the judge's decision had been an unlawful contravention of Art.6 European Convention on Human Rights ("EHCR"), which guarantees a fair hearing before an impartial tribunal. If the tribunal had apparently been partial as the judge had found, he had – so ASM argued - no option in law other than to set aside the award and a refusal to do so made his decision unlawful.
ASM's contention that, if a judge fails to remedy the breach of
an ECHR obligation he is himself in breach of the ECHR because he has not upheld
the right which the ECHR has itself guaranteed, was misguided for a number of
reasons. First, the European Court is not concerned with the merits of the
decision which is under attack, but only to see that the procedure has been
fair, see English v Emery Reimbold & Strick Ltd  EWCA Civ
605. Secondly there is no overarching principle laid down by the ECHR that
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