ASM Shipping Ltd of India v TTMI Ltd of England

Factual and Procedural Background

This opinion concerns an application for permission to appeal from a decision of a High Court judge in the Commercial Court who dismissed an application by shipowners to set aside an arbitral award for serious irregularity under section 68 of the Arbitration Act 1996. The judge refused permission to appeal. The alleged serious irregularity was apparent bias on the part of the third arbitrator, Mr Duncan Matthews QC, who had previously acted as counsel in a related matter ("the B case"). The shipbroker in the current arbitration was a witness for the respondent shipowners and had raised concerns about the arbitrator's connections.

The arbitrator was appointed and notified to the parties before a hearing was fixed. On the first day of the hearing, the shipbroker objected to the arbitrator's appointment due to his prior involvement in the earlier case and alleged "close connections" with the opposing party's solicitors. The arbitrator declined to recuse himself after disclosing his prior involvement. Although the shipowners instructed their solicitors to object, the arbitration proceeded with a reservation of rights.

The judge found that the arbitrator should have recused himself but held that the shipowners waived their right to object by not promptly applying for his removal under section 24 of the Arbitration Act. The judge dismissed the shipowners' application to set aside the award on this basis and refused permission to appeal.

Legal Issues Presented

1. Whether the court has jurisdiction to entertain an application for permission to appeal from the substantive decision of the judge dismissing the application to set aside the arbitral award under section 68 of the Arbitration Act 1996.
2. Whether the judge erred in holding that the alleged serious irregularity (apparent bias) was waived by the shipowners.
3. Whether the judge’s refusal to set aside the award constituted a breach of Article 6 of the European Convention on Human Rights (ECHR), guaranteeing a fair hearing before an impartial tribunal.

Arguments of the Parties

Appellant's Arguments

• The judge’s finding that the irregularity was waived was clearly and obviously wrong.
• There was no decision under section 68 because the waiver issue is a defence, not a decision on the serious irregularity itself.
• The judge’s refusal to set aside the award despite apparent bias breached Article 6 of the ECHR, which guarantees a fair hearing before an impartial tribunal.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first addressed whether it had jurisdiction to hear the appeal application under section 68(4) of the Arbitration Act 1996, which requires leave of the High Court judge for any appeal. The court found that the High Court judge's decision to dismiss the application and refuse permission to appeal was a valid decision under section 68, and therefore this court had no jurisdiction to grant permission to appeal, even if the decision was wrong.

The court then examined the alleged serious irregularity of apparent bias by the arbitrator. The judge had found that the arbitrator should have recused himself but that the shipowners waived their right to object by failing to apply for removal promptly. The court agreed that waiver of objection to bias is a valid defence and that the judge had afforded a fair hearing, applying the correct legal principles.

Regarding the European Convention on Human Rights, the court distinguished this case from others where the judge was alleged to have breached Article 6 by failing to engage with submissions properly. Here, the judge conducted a public and impartial hearing, and there was no procedural unfairness. The court noted that the Strasbourg court allows a margin of appreciation to national courts in arbitration matters and does not require automatic setting aside of awards tainted by apparent bias.

The court rejected the argument that the judge's refusal to set aside the award breached Article 6, emphasizing that the issue was whether the procedure was fair, not whether the judge's decision was correct on the merits. The court concluded that no Convention rights were infringed and that the statutory prohibition on appeal without leave applied.

Holding and Implications

The court DISMISSED the application for permission to appeal. The direct effect is that the High Court judge's decision dismissing the shipowners' application to set aside the arbitral award for serious irregularity stands, and no appeal will be permitted.

No new precedent was established by this decision. The ruling confirms the strict application of section 68(4) of the Arbitration Act 1996 regarding leave to appeal and affirms the principle that waiver of objection to apparent bias may bar relief. It also underscores the limited scope for challenging arbitration awards on Convention grounds in the absence of procedural unfairness.