Summary

Arbitration - Arbitrator sitting again in proceedings of the same facts and issues - Duty to disclose - Apparent bias - Waiver - Prompt objection required - UNCITRAL Arbitration Rules.

SUMMARY

The appellant, the Government of Guyana acting through its Attorney General, entered into a contract with the respondent, Azad Meerza of Falcon Transportation and Construction Services, for certain road works. In these proceedings, the appellant resists the enforcement of an arbitral award made against it concerning a dispute arising during the contract, claiming bias on the part of Mr Edward Gonsalves, one of the arbitrators. Their objection was that Mr Gonsalves was previously involved in adjudicating the same matter on a first panel which had decided in favour of the respondent. The High Court did not enforce the first award made in March 2015 because the panel was found to be improperly constituted.

Following the non-enforcement of the first award, the respondent filed an originating summons under the Arbitration Act to nominate appointees to form a new panel, to which, at the direction of the High Court (Persaud J), Mr Gonsalves was nominated again by the respondent with no objection from the appellant. The process of nominating the rest of the panel took place over the months following with intermittent participation by the appellant.

Thereafter, the reconstituted panel conducted the arbitration proceedings and again made an award in favour of the respondent in the sum of GYD179,946,850. The appellant did not participate in the arbitration proceedings despite being notified on several occasions.

The respondent once again returned to the High Court for an Order enforcing the second award. At first instance, the application was refused on the basis that the second tribunal was improperly formed, the court reasoning that the Order of Holder J in the first enforcement proceedings brought the tribunal's tenure to an end. The court added that there was no evidence that the parties had consented to designating the High Court as an appointing authority to constitute the second tribunal. The Court of Appeal of Guyana reversed this decision, holding that the appellant was estopped from objecting to the composition of the second panel since its objection was outside the 15-day window prescribed by the UNCITRAL Arbitration Rules, by which the parties were bound. By a majority, the Court of Appeal ordered that the award of the reconstituted panel be enforced.

The appellant appealed this order, repeating before the Caribbean Court of Justice ('CCJ' or 'Court') its contention of apparent bias on the part of the reconstituted panel and arguing that Mr Gonsalves erred by failing to disclose that he had served on the first arbitral panel.

This Court affirmed the principles of disclosure and their importance in maintaining the impartiality of an arbitrator and the integrity of arbitral proceedings, but found that the fact of Mr Gonsalves' prior involvement as an arbitrator was no secret, and in those circumstances, he did not violate any duty to disclose what was already known.

On the issue of apparent bias, the CCJ applied the common law test of 'whether a fair- minded and informed observer, having considered the facts, would conclude that there was a real possibility that the judge was biased.' Based on the authorities considered, this Court agreed that the mere fact of having sat on a panel that previously adjudicated on the same dispute between the parties does not automatically give rise to a presumption of apparent bias, but rather something additional of substance is required for such a finding. The Court discussed a plethora of reasons in support of this position, including the fact that arbitrators and judges are trained to be fair and open-minded, while other factors such as judicial economy and efficiency are relevant in determining whether the same judge or panel should sit again in the same dispute.

Ultimately, this Court determined that there is no exhaustive list of situations that automatically suggest apparent bias by an arbitrator, with each case having to be evaluated on the basis of its specific facts and circumstances from the perspective of the 'fair-minded observer.' On the facts before the Court, there was no evidence to support a finding of apparent bias on the part of Mr Gonsalves.

On the issue of waiver, this Court found that the appellant had waited more than seven months to object to the constitution of the panel, when the UNCITRAL Arbitration Rules only allow for a 15-day window to do so. The rules also caution that a lack of promptitude in objecting to an issue by any party results in that party waiving its right to object. This Court noted the case law in international arbitration frowns upon the strategy of a party waiting to raise an objection at the end of arbitral proceedings only if the result is unfavourable to it, especially where the issue could have been remedied at an earlier stage.

This results not only in a waste of time and resources but is also fundamentally unfair to the other party who may have diligently participated in the process.

Based on the evidence before the Court, the appellant was fully aware and had been represented at various stages of the court proceedings, which was supported by the exchange of correspondence between the parties. In the circumstances, this Court dismissed the appeal, holding that the appellant effectively waived its right to object and upholding the decision of the Court of Appeal of Guyana that the award be enforced.