Great Care Be Exercised To Remove Taint Of Bias In Arbitral Proceedings: Singapore Supreme Court Judge

Great care must be exercised to remove any taint of bias in arbitral proceedings as its apprehension is an important aspect related to the alternate dispute redressal mechanism, Singapore Supreme Court judge Justice Judith Prakash said on Wednesday.

Justice Prakash was delivering the keynote address in a function here as part of the Delhi arbitration weekend on the topic ‘Understanding the unsaid: Biases in arbitration and the role of tribunals and courts’.

The event is organised by the Supreme Court and the Delhi High Court and is held from March 6 to 10. Chief Justice of India D Y Chandrachud and Delhi High Court Acting Chief Justice Manmohan also spoke on the occasion.

“It has been recognised that great care must be exercised to remove any taint of bias. It (bias) is an issue which is particularly important in arbitration… because arbitral awards are subject to extremely limited curial review (review only for an error in law), the process itself is fundamental and its fairness needs to be jealously guarded,” she said.

She said arbitration had moved away from its roots of trade disputes, which were settled quickly and informally, towards “heavily traditionalised arbitration proceedings.” “In many countries, arbitrators and counsel involved in arbitration are drawn from a smallish pool of practitioners. While this situation may be changing, due to the increasing popularity of arbitration, the relatively small number of experienced arbitrators coupled with the expectation of many nominating parties that the arbitrator appointed by them should take their side often gives rise to challenges to be independent of a nominated arbitrator,” Justice Prakash said.

She said challenges in the suitability of an adjudicator involved dealing with the allegations of 'actual' and 'apparent' bias.

Justice Prakash referred to the Singapore International Arbitration Centre’s code of ethics for arbitrators and hoped that the Delhi Centre of Arbitration is also following the same approach.

She said the courts consider two legal tests for bias in arbitral proceedings.

“One, based on the English common law test of whether there was a real danger meaning a real possibility of bias and two, the test of reasonable suspicion or apprehension, which was used by courts in Singapore and Australia.

“I understand from my admittedly brief research, that India adopts a slightly different position to that of Singapore. Indian courts have stated that the relevant test for arbitrator impartiality is whether there is a reasonable apprehension of bias from the viewpoint of the concerned party,” she said.

Justice Prakash said the courts ensured bias-free proceedings at the beginning of the proceedings and also after the issuance of an award when one of the parties appealed to a supervisory court to set aside the award.

She said the approach of the court should be to support arbitral awards and not to destroy it.

“When faced with a setting aside application, the preferred approach of the court is to read the award supportively and in a manner that is likely to uphold it rather than to destroy it. The court eschews interference with the merits of the award,” she said, adding that the courts, however, ensured that a fair process was afforded to parties.

“I understand that this is the position of the Delhi High Court as well. Bias is not expressly stated to be a ground on which an award can be set aside. In my view, however, many challenges based on an assertion of breach of natural justice at their heart involve allegations of bias…,” she said.

Justice Prakash also said a tribunal must decide a case based on the evidence before it and that it could not fill in any evidential gaps by having recourse to its knowledge, no matter how extensive.