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Private international actors go to arbitration to avoid adjudicatory risks,
especially the risk of bias. It follows that safeguarding procedural fairness
is a key concern in arbitral processes, and that exposing actual bias is
crucial. However, evidence from both case law and institutional statistics
shows that wily parties are willing to abuse procedural fairness and cry bias
as a way of delaying proceedings and escaping enforcement, and that the
frequency of such spurious challenges is increasing.
This insightful book offers a proposal, solidly grounded in legal principle
and precedent, for how the arbitration community should respond to this
threat. The author shows how ‘dirty’ challenge tactics are made viable
primarily by the prevalence of a judicially derived test for bias which
focuses on appearances, rather than facts. He argues that the most commonly
used test of bias, the ‘reasonable apprehension’ test, makes it easy to allege
a lack of impartiality and independence. He shows that the ‘real danger’ test,
derived from the decision of the House of Lords in Gough, has a much higher
threshold, and has the additional advantage of making the arbitral award
stronger at the all-important enforcement stage.
In the course of the presentation the book analyzes, in extraordinary depth,
such issues as the following:
which state’s courts are most likely to find arbitrator bias, and which
state’s courts are least likely;
applying the ‘real danger’ test under the various applicable conventions, the
Model Law, and institutional rules;
bias challenges under European Human Rights law;
distinction between party-appointed arbitrators and chairmen in the context of
a bias test;
relevant trends in investor–state and ICSID arbitration; and
bias rules in the lex mercatoria.
In a broad comparative survey of the law of bias challenges in international
commercial arbitration covering all leading states, the author examines
various municipal laws to determine their tolerance for a ‘real danger’ clause
in commercial contracts. His analysis, replete with case summaries and
material facts, provides a strong scaffolding for his thesis, and also probes
the causes of the increased rate of bias challenge.
The need for a uniform test in this area is made very convincing by this
original study. Arbitrators and other interested professionals and academics
will find it of unusual value and interest, and corporate counsel will find
much to consider in the use of the ‘real danger’ clause.
1. Bias in International Commercial Arbitration.
2. Lord Hewart’s Ghost (England).
3. Varying Approaches in Europe.
4. The American Way.
5. Competing Tests in the Asia Pacific.
6. Rules of Bias in the Lex Mercatoria.
7. Bias Challenges in Investor-State Arbitration.