| Date | 20 October 1999 |
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| Judgment | Brian Andrews -v- John H Bradshaw, CA 29 July 1999 |
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| The Issue | Impartiality of arbitrators and adjudicators. |
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| Implication |
Adjudicators and arbitrators must be careful to observe the terms of their appointment and any rules incorporated into the agreement for arbitration or adjudication. In the absence of co-operation from one party, they should be careful to avoid any suggestion of impartiality. |
printIt is in the nature of the construction industry that adjudicators and arbitrators often have to work without the co-operation or consent of both parties. Indeed, in the recent case of the Project Consultancy Group -v- The Trustees of The Gray Trust, it was held that a party seeking to argue that the adjudicator lacked jurisdiction would be required to maintain that position throughout its conduct in the adjudication. Otherwise it might reasonably be argued that they had submitted to the jurisdiction of the adjudicator. Arbitrators and adjudicators may frequently come across a situation where one party refuses to enter into an arbitration or adjudication agreement, or refuses to pay a deposit or interim fees rendered by the arbitrator or adjudicator. In Andrews -v- Bradshaw the Court of Appeal had to decide whether, in the circumstances described above, the court had been correct to order the removal of an arbitrator for bias in the manner in which he had dealt with the situation. Andrews were sub-contractors for demolition and ground works for the construction of a new wing of a nursing home in south-east London. H Randell and Son Limited were the main contractors. A lengthy dispute which had led to arbitration proceedings had taken place between Randell and its client, and upon its conclusion Randell had turned its attention to its sub-contractor Andrews. This in turn led to the appointment by the Royal Institution of Chartered Surveyors of Mr Bradshaw as arbitrator. Mr Bradshaw sent out to both parties an arbitration agreement and a request for payment of a deposit against his fees. Andrews refused to comply. Differences arose concerning the manner in which the arbitration might be progressed and in particular whether certain preliminary issues ought to be tried by the arbitrator. Thereafter letters were exchanged between the parties from which it became apparent that the arbitrator was becoming increasingly resentful of the approach being adopted by Mr Andrews' claims consultant, and Mr Andrews' refusal to pay the requested deposit upon his fees. In one ill judged letter, the arbitrator wrote that he refused to be influenced by prescription from Mr Andrews' claims consultant, and that this was particularly so in view of the refusal of Mr Andrews so far to provide any costs in the matter. Legal advisers for Mr Andrews wrote in the usual theatrical terms expressing amazement and dismay at these comments and asking the arbitrator to retract them and to confirm that he was still able to act impartially. The arbitrator refused to retract and asserted that his impartiality was beyond question. He repeated his concern that Mr Andrews had not signed the agreement or paid the fee deposit. Then came the application to the court for his removal, which was followed by the publication of the arbitrator's interim award. This award rather curiously resolved the preliminary issues in favour of Mr Andrews but required him to bear his own costs and half the arbitration costs to that stage. In the hearing at the Central London County Court, the judge remarked that it seemed to him that the correspondence from the arbitrator "was intemperate of nature and certainly, objectively speaking, would have dented the confidence of the parties to an arbitration in his continuing impartiality." Accordingly he made an order removing the arbitrator. The matter then came before the Court of Appeal, where it was emphasised that the test to apply was that held in the case of R -v- Gough "whether in all the circumstances of the case there was, or is, a real danger of bias on the part of the arbitrator in the sense that he might unfairly regard or have regarded with favour or disfavour the case of one party to the issue under consideration by him." Lord Justice Mance noted that the arbitrator had been appointed under the JCT Arbitration Rules, and accordingly he had no right to require both parties to accept a form of arbitration agreement which provided for different terms, including fee deposits and cancellation fees. Citing the case of Turner -v- Stevenage Borough Council, Lord Justice Mance commented that whilst the arbitrator was quite entitled to ask both parties whether they would accept such an agreement, he should not have entered into agreement with only one party on such a basis, once the other refused to do so. Despite these concerns, the Court of Appeal was satisfied that the conduct of the arbitrator was not such as to justify his removal. Even assuming that the arbitrator had run out of patience with Mr Andrews' claims consultant, and that he harboured some resentment towards Mr Andrews for refusing to pay him any fees, on a review of the case as a whole the Court of Appeal was not satisfied that there was any real danger of the arbitrator having been biased against Mr Andrews in the discharge of his arbitral duties. Such leniency may not be present in adjudication. An adjudicator is statutorily bound to act impartially, and questions over such matters as the adjudicator's terms and conditions or unpaid fees, if handled improperly, may give fertile ground for a party subsequently seeking to resist the enforcement of the adjudicator's decision.
CJ-9940
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