International Judges and Lessons for Arbitration Practitioners in Almazeedi v. Penner
THE AUTHOR:
Daniel Greineder, International Arbitration Practitioner
With an eye to current arbitral practice, the author discusses the decision of the British Privy Council in Almazeedi v. Penner and another [2018] UKPC 3 concerning the alleged bias of a former English High Court judge, Sir Peter Cresswell, sitting as a judge of the Grand Court of Cayman Islands in a case involving the Qatari finance minister. Simultaneously, the judge was also a judge of the Qatar International Court, which is under the control of the finance minister. The piece is of interest to arbitration practitioners for its detailed discussion of independence and the status of judges in international courts, some of whom also serve as arbitrators.
The Supreme Court’s decision in Halliburton v. Chubb [2020] UKSC 48, which concerned an arbitrator’s obligations of disclosure particularly in the event of multiple related appointments, has attracted significant international attention. In that context, the earlier decision of the British Privy Council in Almazeedi v Penner and another [2018] UKPC 3 is of interest, too. It also concerns the apparent bias and related disclosure obligations in case of multiple appointments, albeit of a judge rather than an arbitrator. Legally, the standard of apparent bias is the same for judges as for arbitrators.
The dispute concerned the dual role of the judge in question, Sir Peter Cresswell, a retired judge of the English High Court, as both a judge of the Grand Court of the Cayman Islands and a Supplementary Judge of the Qatar International Court and Dispute Resolution Centre (QICDRC), where the Qatari finance minister, H.E. Ali Shareef Al Emadi, was involved in proceedings before him in the Cayman courts. The Qatar International Court deals with a range of civil and commercial disputes usually involving entities registered in the Qatar Financial Centre and is under the control of the finance ministry.
The Privy Council granted an appeal against a judgment of the Court of Appeal of the Cayman Islands [2015 (2) CILR 156]. Final appeals from the Cayman Islands are decided by the Privy Council in London. Specifically, it was decided by a majority that Sir Peter Cresswell’s role as a Supplementary Judge at the Court of the Qatar International Court and Dispute Resolution Centre (QICDRC) precluded him from hearing the case, because that position created an appearance of bias.
There are now international commercial courts in numerous jurisdictions, including Dubai, Singapore, Kazakhstan, and Qatar. Often the part-time international judges have significant practices as arbitrators. In evaluating an arbitrator’s independence, it may be necessary to consider the arbitrator’s ties with such a court.
The Background to the Appeal
The underlying dispute arose out of the winding up of BTU Power Company (“BTU”), an investment company, incorporated in the Cayman Islands and largely owned by influential Qatari shareholders, close to the State. The proceedings were initiated by and on behalf of the preferential shareholders against the background of a fraught relationship with Mr. Almazeedi who managed BTU through BTU Power Management Company. Mr. Almazeedi remained opposed to the winding up of BTU, although he did not contest the proceedings. As a part-time judge of the Grand Court of Cayman, Cresswell J. was assigned to the case in late 2011 and made a series of orders between 2012 and 2014.
Mr. Al Emadi was heavily involved in the litigation on the side of the shareholders. According to his evidence, Mr. Almazeedi made a series of complaints against Mr. Al Emadi and accused entities of intimidation, over which Mr. El Amadi had power and influence. The allegations were known to Cresswell J.
On 26 June 2013, Mr. Al Emadi succeeded his father-in-law as Qatari finance minister. In parallel, Sir Peter Cresswell became a Supplementary Judge of the Qatar International Court in late 2011 and was sworn in on 8 May 2012. He was one of several former English judges who would hear cases at the Qatar International Court on an occasional basis. In the event, he did not hear a single case and apparently received no payment. Mr. Almazeedi only learned of this appointment in 2014. Cresswell J. did not disclose it to the parties, nor did he recuse himself. Mr. Almazeedi then sought to set aside the orders of Cresswell J on grounds of apparent bias. Importantly, he did not allege actual bias.
The Privy Council and Court of Appeal applied the uncontroversial standard for apparent bias, set out in the English judgment in Porter v. Magill [2002] 2 A.C. 357, [2001] UKHL 67: “The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” This standard also applies to arbitration.
Both courts found that while the Qatari constitution and judicial oaths upheld judicial independence, the UN Special Rapporteur on the Independence of Judges and Lawyers had expressed concern that judges were susceptible to external pressures in discharging their duties. The rapporteur directed that criticism at the regular Qatari courts and did not mention the Qatar International Court. However, the international court was under the control of the finance minister, who from 26 June 2013 was Mr. Al Emadi and his father-in-law before that. The court did not form part of an institutionally independent judiciary. Moreover, Mr. Al Emadi was heavily involved in the dispute. In finding apparent bias, the Privy Council also attached considerable significance to the threats against him alleged by Mr. Almazeedi.
Yet, when it came to applying the law to the facts, the judges’ conclusions differed. In a unanimous decision authored by Sir Bernard Rix, a former judge of the English Court of Appeal and eminent commercial lawyer, the Cayman Court of Appeal [2015] (2) CILR 156 held that Cresswell J. found apparent bias only in relation to the period after Mr. Al Emadi was appointed finance minister.
For the majority of the Privy Council, Lord Mance held that apparent bias was made out throughout and accordingly set aside all Cresswell J.’s orders relating to the winding up of BTU. He made no distinction between the time before and after Mr. Al Emadi’s appointment as finance minister.
Lord Sumption dissented. Although dissenting judgments are common in the English Court of Appeal and Supreme Court, judgments of the Privy Council are by convention unanimous. Applying the same legal test as the Cayman Court of Appeal and the majority of the Privy Council, he held that no apparent bias was made out on the facts: the nexus between Cresswell J. and any conceivable machinations by Mr. Al Emadi through the Qatar International Court was doubtful and farfetched, especially given the judicial oaths of independence that Cresswell J. had taken.
Discussion and Lessons for Arbitration Practitioners
On a basic level, some international judges also sit as arbitrators. Where, for example, State entities, politicians or government interests arise in an arbitration, it may be necessary to consider whether a judge at such a court is sufficiently independent to act as an arbitrator. The judgment identifies some relevant considerations, such as the nature of the appointment, the closeness of the parties to the administration of the court, the independence of the judiciary in the relevant jurisdiction and the remit of the court. Mere association by nationality may not of itself lead to disqualification.
The judgment also raises issues that may arise analogously in arbitration, especially as the Porter v. McGillstandard applies to arbitration. Firstly, a prospective or appointed arbitrator’s obligation of disclosure is continuous, for example, under the IBA Guidelines on Conflicts of Interest. While both the Court of Appeal and the majority in the Privy Council faulted Cresswell J. for his failure, they disagreed as to when the obligation to disclose his Qatari associations was triggered. For arbitrators to be on the safe side, disclosure of possible conflicts of interest should be made sooner rather than later.
The evaluation of conflicts of interest is factually delicate. Here, there are three different analyses by leading judges applying the identical test of apparent bias under the law of their home jurisdiction. How much greater then is the difficulty in assessing conflicts of interest in international arbitration by appeal to international practice! The difficulty of balancing moral, legal, and factual issues needs to be acknowledged. Ultimately, the question of the external influence an arbitrator can withstand before his independence is compromised is anthropological as much as legal.
It is important to understand the precise nature of a judicial appointment or any alleged conflict. In his dissenting judgment, Lord Sumption highlighted the special status of the Qatar International Court and the likely reputational harm that would result if the government put illicit pressure on the judges of its prestigious international court. If those additional factors are acknowledged, it becomes harder to see Cresswell J. as vulnerable to external pressure. Conspicuously, Mr. Al Emadi is alleged to have directed illicit pressure for defying Qatari interests against Mr. Almazeedi rather than the judge.
Indeed, Cresswell J.’s position was distinct from that of expatriate judges in the local courts whose livelihoods and residency in Qatar may depend on their employment as judges. He was not a remotely typical foreign employee but a privileged and, to some degree, protected international service provider. Although the analogy is not precise, he is perhaps closer to an arbitrator who is credited with sufficient independence from an appointing party to accept a fee and still decide the case impartially.
Finally, the case challenges arbitration practitioners to reflect on the relationship between actual and apparent bias. The appellant only alleged apparent bias, meaning that an outside observer would perceive “a real possibility” of bias. Presumably, he saw no prospect of showing bias outright. Moreover, all the judges involved held Cresswell J. in high regard professionally and ethically. Where the absence of actual bias is as clear-cut as here, the courts should perhaps have hesitated to find apparent bias in the absence of weighty circumstances, creating a false impression of bias.
Again, the lesson for arbitration practitioners is that, as with any evidentiary matter, the facts deserve careful attention. A real possibility must be grounded in fact. There can be no shortcuts based on loose associations. Where arbitration practitioners so often pride themselves on their thorough evaluation of facts, they should apply those forensic skills to conflicts of interest, too.
ABOUT THE AUTHOR
Daniel Greineder is an international arbitration practitioner with over 15 years of experience. He has practised at leading international firms and chambers in London, Geneva and Doha and is fully fluent in English and German. He trained as an English barrister and has particular experience of disputes arising in the energy and construction sector as well as of joint venture andi corporate disputes. He was educated at Oxford University and City University, London.
