In Re: Arbitration Between Minter Kier (Africa) Limited; Ralli Brothers Ltd; In Re: Arbitration Ordinance, CAP. 22, Revised Edition (Miscellaneous Civil Case No. 16 of 1951 (Mombasa)) [1951] EACA 333 (1 January 1951)

## ORIGINAL CIVIL

### Before de LESTANG, J.

# IN THE MATTER OF AN ARBITRATION BETWEEN MINTER KIER (AFRICA) LTD.,

#### AND

#### RALLI BROTHERS LTD.,

## AND IN THE MATTER OF THE ARBITRATION ORDINANCE, CAP. 22, **REVISED EDITION**

### Miscellaneous Civil Case No. 16 of 1951 (Mombasa)

Building contract—Arbitration—Where architect appointed arbitrator—Principle of conduct to be applied—Whether bias.

An application to remove an architect arbitrator or to set aside an award on the ground of misconduct arose out of a dispute under a building contract. The Court was not satisfied that there was any reasonable likelihood that the architect would be required to give evidence. It was, however, clear from the correspondence that without hearing the applicants' case the arbitrator had made up his mind on the issues to be decided and had so informed the applicants.

Held (16-11-51).-(1) The Court will not relieve the parties of their obligation to submit their dispute to the arbitrator of their choice simply because for the reasons inherent in his position he is not in the ordinary sense impartial.

(2) To disqualify the arbitrator there must at least be a probability of bias, which goes beyond the natural bias which an architect arbitrator is bound to entertain.

(3) In the present case the arbitrator has by his letter shown that he has not kept an open mind but has pre-judged the issues.

(4) In the result the matter was referred to a fresh arbitrator.

Cases referred to: Bristol Corporation v. John Aird & Co. (1913) A. C. 241; Eckersley & Others v. The Mersey Docks & Harbour Board (1894) 2 Q. B. 667; Jackson v. Barry Railway Co. (1893) 1 Ch. 238; Hickman & Co. v. Roberts & Others (1913) A. C. 229.

#### R. P. Cleasby for applicants.

$\cdot \cdot \cdot$

J. Christie for Respondents.

ORDER.—This is an application to remove an arbitrator or alternatively to set aside his award, if it has already been made, on the ground of misconduct. It arises in the following circumstances:

By a building contract entered into between the applicants as contractors and the respondents as employers it was provided that in case any dispute or difference shall arise between the parties either party shall forthwith give to the other notice in writing and such dispute or difference shall be referred to the arbitration and final decision of the employers' architect. In November, 1950, a dispute arose in respect of the following matters, viz., whether the painting of the steel roof was included in the contract sum or should be allowed as an extra, and whether certain cracks which had appeared in the building were due or not to materials and workmanship not being in accordance with the contract. Neither party gave notice of the dispute as required by the contract so that the arbitrator was never properly seized of it. There was, however, a certain amount of correspondence on the matter between the applicants and the architect and it is on this correspondence that the applicants rest their allegation of misconduct against the arbitrator. Let me say at once that they do not

impute to him any fraud, dishonesty or improper conduct from a moral point of view. They merely contend that they will not get a fair hearing before the arbitrator for two reasons. Firstly, because he has already made up his mind and pre-judged the issue and secondly because he must be a necessary witness in the arbitration.

Taking the second contention first it would clearly be contrary to the principles of natural justice that a person should be both judge and witness in the same cause and it was accordingly held in Bristol Corporation v. John Aird. and Co., 1913 A. C 241, that such a situation afforded a sufficient reason for not having an arbitration in accordance with the contract. I cannot do better than quote a short passage from the opinion of Lord Atkinson at page 248 which makes the position so clear:—

"I am utterly unable to get rid of the notion that upon two of the most important matters, namely, this filling and the excavation between the monoliths, Mr. Squire will necessarily be at once in the position of a judge and a witness. I think he must necessarily be in that position. I cannot imagine any position more unpleasant, any position more undesirable. If he be really a witness, then he must, in effect, be examined before himself, and cross-examined before himself, and he must decide upon his own veracity or reliability. I think there could be no stronger reason to induce the Court not to exercise their discretion to stay the action than that any gentleman who has taken upon himself the duties of arbitrator should be put in such an entirely anomalous position."

That being so the question for decision on the second contention of the applicants is whether the arbitrator is likely to be a necessary witness in the arbitration proceedings. The applicants rely on the following passage in a letter written to them by the architect: $-$

"I consider the cracks in the concrete and coral are due to your having allowed insufficient time for the concrete piers to dry out before erecting the panel walls and in consequence cracks have appeared which I consider to be your responsibility."

They say that as the architect had the duty of supervising the construction of the building and as he has expressed that opinion he will have to be called to establish his allegation as to insufficient time being allowed. I am unable to agree with this conclusion. Evidence is only required when the facts are in dispute but not when different inferences are drawn from the same facts. There is nothing here to show that there is any dispute between the architect and the applicants as to the time that elapsed between the erection of the concrete piers and the panel walls and it may very well be that there is none. In that case I cannot see that it will be necessary for the architect to give evidence at all. I am certainly not satisfied that there is any reasonable likelihood of the architect being required to give evidence. The second contention of the applicants therefore, fails.

I shall now deal with the first contention of the applicants which is that the arbitrator having expressed opinions in the matters in dispute so strongly as to amount to a pre-judgment should be disqualified from acting as arbitrator. It is, however, submitted by Mr. Christie on behalf of the respondents that this is not a sufficient ground for removing an arbitrator and that when parties have agreed upon an arbitrator to settle their disputes as in this case they cannot avoid reference to him unless it is shown that the arbitrator has been guilty of fraud or some other improper conduct involving moral turpitude. I am unable to agree with Mr. Christie's submission which, in my opinion, takes too narrow a view of the law. It seems to me to be well settled that quite apart from fraud or improper motive an arbitrator even though chosen by the parties can and will be disqualified for want of impartiality. The Court will not, however, relieve the parties of their obligation to submit their dispute to the arbitrator of their choice simply because for the reasons inherent in his position he is not in the ordinary sense impartial but if for any reasons other than such as are inherent in his position there is a ground for supposing that the arbitrator would be biased, the Court will not compel the parties to refer to him (vide Hudson on Building Contracts 7th Edition page 288 and cases therein cited). Thus it was held in Eckersley and others v. The Mersey Docks and Harbour Board, 1894, 2 Q. B. 667 that probability that the arbitrator would in fact be biased in favour of one of the parties in giving his decision would justify the Court in disqualifying him from acting. Again in Jackson v. Barry Railway Company, 1893 1 Ch. 238 it was held that an arbitrator who had made up his mind so as not to be open to change it upon argument would be disqualified from acting as arbitrator. I could multiply such examples but will content myself in quoting a short passage from the opinion of Lord Atkinson in Bristol Corporation v. John Aird and Co., 1913 A. C. 241 at page 247 which clearly sets out the legal $position:$

"If a contractor chooses to enter into a contract binding him to submit the disputes which necessarily arise, to a great extent between him and the engineer of the persons with whom he contracts, to the arbitrament of that engineer, then he must be held to his contract. Whether it be wise or unwise, prudent or the contrary, he has stipulated that a person who is a servant of the person with whom he contracts shall be the judge to decide upon matters upon which necessarily that arbitrator has himself formed opinions. But though the contractor is bound by that contract, still he has a right to demand that, notwithstanding those pre-formed views of the engineer, that gentleman shall listen to argument and determine the matter submitted to him as fairly as he can as an honest man; and if it be shown in fact that there is any reasonable prospect that he will be so biased as to be likely not to decide fairly upon those matters, then the contractor is allowed to escape from his bargain and to have the matters in dispute tried by one of the ordinary tribunals of the land. But I think that he has more than that right. If, without any fault of his own, the engineer has put himself in such a position that it is not fitting or decorous or proper that he should act as arbitrator in any one or more of those disputes, the contractor has the right to appeal to a Court of law ....."

To disquality an arbitrator, however, there must at least be a probability of the existence of bias. An expression of opinion, however, strongly worded would not be sufficient. As Bowen L. J. said in Jackson v. Barry Railway Company, 1893, 1 Ch. $238:$ —

"The perfectly open judgment, the absence of all previously formed or pronounced views, which in an ordinary arbitrator are natural and to be looked for, neither party to the contract proposed to exact from the arbitrator of their choice ... The question is whether the engineer has done anything to unfit himself to act, or render himself incapable of acting, not as an arbitrator without previously formed or even strong views, but as an honest judge of this very special and exceptional kind."

For the applicants to succeed, therefore, in the present case they must satisfy the Court that there is real bias on the part of the arbitrator which goes beyond the natural bias which an arbitrator who is also the architect of one of the parties is bound to entertain in a dispute between his employers and the

builders. Have they succeeded in doing so? I think that they have. They have shown by the correspondence that the arbitrator has misconstrued his position and has purported to adjudicate upon the dispute without it having been properly referred to him. It is clear from the correspondence that without hearing the applicants' case the arbitrator had made up his mind on the issues to be decided and has so informed the applicants. On 31st March, 1951, he wrote them that he had already adjudicated upon the matter. On 12th May, 1951, he again wrote, "I have given my decision in the matter". Again on 17th of May he wrote, "I am the person named in that clause, I have given a final decision on the question raised by your company, and so far as I can see nothing further can be done in the matter". In these circumstances after making full allowance for the position of the architect can it be said that he has in the words of Lord Ashbourne in Hickman and Co. v. Roberts and Others, 1913 A. C. 229 preserved "that attitude of judicial independence which was needed and required of him in the discharge of his responsible and possibly difficult duties". In my view it cannot; the arbitrator by his letter has shown that he has not kept an open mind but has prejudged the issues. He is therefore no longer qualified to act. That being so the matters in dispute should be referred to a person to be appointed by the President or Vice-President of the Royal Institute of British Architects as provided in clause 26 of the contract or to such other person or persons as the parties may by mutual agreement appoint.

The respondents will bear the costs of this application.