Lisbon Court of Appeal | Impartiality and Independence of Arbitrators | Challenge of Arbitrator | 03-10-2017 | Case #022

Lisbon Court of Appeal
Date: 03-10-2017
Case Nr. 1177/17.1YRLSB-7
LINK DGSI

Headline:

In cases where omission to disclose is of substance that is fundamental in nature, this in itself would point towards a lack of independence or impartiality. Where the challenge is based on the fact that certain relevant evidence was not considered by the arbitrator, it is incumbent on the applicant to specify the same. Failure to do so would bar the applicant from claiming a lack of impartiality.    

Summary:

1. 1. In determining whether there is a duty of disclosure and consequently, the grounds for challenging the arbitrator, it is necessary to take into account the context in which the applicable ‘quasi-law’ instruments have been developed.
   2. As has been decided in preceding case-law, iIn order to challenge an arbitrator on the ground of failure in their duty to disclose, it is necessary that there exist circumstances which objectively point towards a lack of independence and impartiality. In extreme cases where the omission to disclose is in relation to a circumstance that is fundamental in nature, this factor in itself points towards a lack of independence or impartiality.
   3. It is not advisable to challenge the arbitrator who presides over the Arbitral Tribunal when there is a unanimous decision by all members of the Tribunal.
   4. If the applicant’s challenge is based on the fact that certain evidence deemed to be relevant by them was not considered by the arbitrator, this must be specified, failing which the applicant cannot rely on that plea to invoke a breach of the duty of impartiality.
   5. It is not sufficient to simply demonstrate multiple appointments in order to successfully challenge the arbitrator. The applicant must show objective circumstances that make manifest or obvious the arbitrator’s lack of independence or impartiality. This requirement implies a relatively heavy and demanding burden of proof upon the party invoking the challenge.
   6. In this case, the risk of economic dependence is associated with the question of multiplicity of appointments to challenge the arbitrator. In assessing economic dependence, there can be no fixed amount of monetary value which would give rise to a challenge. Instead, it must be seen in light of the surrounding circumstances as to whether the impugned value would constitute a risk of economic dependence.

    

   This case summary was kindly prepared by Sameer Thakur (sameerthakur@live.in, NALSAR University of Law), Rishabh Raheja, (rishabharaheja@gmail.com, NALSAR University of Law), and Abhishek Babbar (abhishekbabbar1996@gmail.com).