Background
Two concurrent arbitrations arose from disputes over a vessel chartered under materially identical charterparties. The Owner sued the head charterer (Defendant) in the Head Reference, while the head charterer sued the subcharterer (Claimant) in the Sub-Reference. Both proceedings involved the same underlying facts: a specialist gangway system installed on the vessel collided with a Floating Production Storage and Offloading Vessel (FPSO), damaging the gangway and triggering disputes over hire payments and late redelivery damages.
The parties agreed to conduct the arbitrations concurrently, with tribunals sitting together to hear common evidence and issues. The tribunals comprised eminent retired English judges. After hearing three tranches (preliminary issues, main hearing, and further written submissions), the Head Award was issued in June 2025 largely favoring the Owner. Nine days later, the Sub-Reference tribunal issued its award substantially favoring the Defendant/Claimant.
Upon reviewing the draft Head Award before finalizing its own award, the Sub-Reference tribunal noted it had exercised separate and independent judgment but reached substantially similar conclusions and largely the same reasoning on common issues. The Claimant subsequently applied to set aside the award, alleging the tribunal’s process breached natural justice through apparent bias and failure to properly apply its mind to the issues.
The Court’s Holding
Aidan Xu J dismissed the application. While acknowledging that 108 of 211 paragraphs in the Sub-Reference award showed substantial similarity to the Head Award, the court found these similarities did not establish apparent bias or breach the fair hearing rule. The court emphasized that both arbitrations proceeded concurrently under a Concurrency Order that the Claimant had agreed to and explicitly permitted inter-tribunal discussions. Significantly, the tribunal had access to identical materials and heard the same evidence as the Head arbitrator, creating equality between the tribunals—a factual distinction from the Court of Appeal’s decision in DJ P, where a single arbitrator’s sequential involvement in parallel proceedings had created the bias concern.
The court found the Sub-Reference tribunal exercised genuinely independent judgment despite the similarities: it structured its analysis according to how the parties argued their Sub-Reference case, considered legal authorities and contractual provisions not addressed in the Head Award, demonstrated awareness of differences between the Head Reference and Sub-Reference arguments, and produced substantial differences in certain conclusions. The tribunal had explicitly invited further submissions from the Claimant, contradicting any suggestion of a closed mind during the hearing phase. Prejudgment concerns, if any, focused on the drafting stage after parties were fully heard, not on keeping a closed mind during the arbitration itself.
The court further rejected that the fair hearing rule was breached by the tribunal’s failure to properly apply its mind to the matters in dispute. The tribunal had demonstrably engaged with the Claimant’s submissions, and the Claimant could not identify specific points the tribunal failed to consider that might have altered the outcome. The court declined to extend Pek Lian Guan’s “reasonable suspicion” test from the judicial to the arbitral context, noting that the requirement to prove prejudice provides sufficient safeguard against frivolous natural justice complaints in arbitration.
Key Takeaways
- Concurrent arbitrations with inter-tribunal coordination by agreement do not breach natural justice merely because awards are substantially similar, provided the tribunals were equally positioned and heard identical evidence.
- Substantial textual copying between awards does not automatically constitute apparent bias; the timing and context matter—prejudgment concerns arising after parties are fully heard differ from concerns arising during the hearing phase.
- An arbitrator exercises independent judgment through the substance and structure of reasoning, not merely by avoiding textual replication; adopting conclusions reached by a tribunal in parallel proceedings is permissible where both tribunals had equal access to evidence and arguments.
- The threshold for setting aside awards on natural justice grounds in arbitration remains the balance of probabilities, not the “reasonable suspicion” test applied in judicial bias cases, reflecting arbitration’s consensual and private nature.
Why It Matters
This decision provides important guidance on natural justice obligations in concurrent arbitrations, a growing phenomenon where related disputes proceed in parallel. It clarifies that tribunal coordination and communication, when agreed by parties, do not per se constitute breach of natural justice. The judgment distinguishes DJ P’s sequential parallel arbitration scenario from concurrent proceedings, establishing that equality of access to evidence and arguments significantly weakens apparent bias allegations based on award similarities alone.
The decision also addresses tensions between the rule against bias and fair hearing rule, holding they are conceptually distinct and must be analyzed separately even when arising from the same facts. By declining to import the judicial “reasonable suspicion” test into arbitration, the court preserved the framework for curial restraint in arbitral matters while still maintaining meaningful natural justice protections through the requirement to prove actual prejudice.