A third arbitrator appointed by the arbitrators already appointed, accepted office on the basis that the hearing would take place by a specified date and would last for a specified period. Three years later, the plaintiffs’ solicitors requested the arbitrators to fix a period for the hearing over twice as long and in two further years’ time. The third arbitrator replied that the tribunal might consider this but that the parties should consider the fees likely to be incurred and he set out a statement of the fees chargeable including a non-refundable commitment fee payable in advance of the hearing. The defendants’ arbitrator took no part in the ensuing discussion of fees. The parties did not accept the proposal but invited its withdrawal. The third arbitrator and the plaintiffs’ arbitrator offered their resignations. The plaintiffs’ solicitors made a proposal acceptable to the arbitrators but sought an assurance that the defendants’ solicitors had no objection to the plaintiffs making the payments proposed. The defendants’ solicitors maintained that the two arbitrators had no power to demand advance fees; the fees were excessive, and that it was inappropriate for one party to pay the fees demanded to the two arbitrators. They did not allege partiality. They later wrote that both arbitrators should continue on the terms as appointed but withdrawing the new fees demand. The plaintiffs sought declarations that the arbitrators were fit and proper persons to act and that their acceptance of the plaintiffs’ fee arrangements would not raise any imputations of bias. The defendants applied for an order that the two arbitrators be removed.
Held: For an arbitrator to insist upon a fee without the consent of all parties constitutes misconduct: ‘Any fee upon which (the arbitrators) wish to insist should be made known at the outset before acceptance of appointment.’
However, the express disavowal by the defendants of any imputation of actual bias and their request that the arbitrators continue to act, precluded the exercise by the court of its discretion to remove them but, that the conclusion of an agreement between the arbitrators and the plaintiffs on the basis of the plaintiffs’ revised proposal would be improper. The majority took the view that by reason of the change in circumstances the request for a commitment fee was justified, that a mere request by an arbitrator for a commitment fee did not amount to misconduct and that, in any event, even if the entry by the arbitrators into separate negotiations with the plaintiffs for their fees amounted to misconduct, the express disavowal of bias and request of the arbitrators to continue to act precluded their removal.
Judges:
Legatt LJ
Citations:
[1992] QB 863, [1991] 3 All ER 211, [1991] 3 WLR 1025
Jurisdiction:
England and Wales
Cited by:
Cited – Jivraj v Hashwani SC 27-Jul-2011
The parties had a joint venture agreement which provided that any dispute was to be referred to an arbitrator from the Ismaili community. The claimant said that this method of appointment became void as a discriminatory provision under the 2003 . .
Lists of cited by and citing cases may be incomplete.
Arbitration, Legal Professions
Updated: 04 May 2022; Ref: scu.442595
