Fiton Technologies Corporation v Attorney General

• Jurisdiction: Barbados
• Judge: Alleyne, J.
• Judgment Date: 17 June 2013
• Neutral Citation: BB 2013 HC 28
• Docket Number: 844 of 2008
• Court: High Court (Barbados)
• Date: 17 June 2013

High Court

Alleyne, J.

844 of 2008

Fiton Technologies Corporation

and

Attorney General

Appearances:

Mr. Barry Gale Q.C. with Mr. Ralph Thorne Q.C. and Ms. Mechelle Forde for the plaintiff

Sir Maurice King Q.C. with Mr. Barry Carrington and Mr. Adrian King for the defendant

Arbitration - Removal of arbitrator by reason of impartiality — Test for apparent bias.

Alleyne, J.

INTRODUCTION

1 The application before the Court is one by which the defendant challenges the authority of Mr. V. V. Veeder (“Mr. Veeder”) to continue serving as sole arbitrator in arbitral proceedings between the parties. It raises two broad issues. These are (1) whether the Court should set aside a consent order relating to the arbitrator's appointment; and (2) whether the arbitrator should be removed by reason of impartiality. Before particularising the application, I will provide some introductory details and outline the statutory provisions of relevance.

2 The plaintiff, Fiton Technologies Corp., (“Fiton”) is an external company registered in Barbados under the provisions of the Companies Act, Cap. 308.

3 The defendant, the Attorney-General of Barbados, represents the Government of Barbados (“the Government”) in these proceedings.

4 On 23 April 2004, the parties entered into a written agreement (“the agreement”) for the remediation by the plaintiff, of an area of Government land that formerly housed the operations of an oil refinery.

5 Clause 13.1 of the agreement provides that the governing law shall be the laws of Barbados. Clause 13.2 is an arbitration provision. It mandates the referral to arbitration of all unsettled disputes, differences or questions between the parties arising out of the agreement, any such referral to be in accordance with the provisions of the Arbitration Act, Cap. 110 (“the Act”).

THE ARBITRATION ACT, CAP. 110

6 The Act came into force on 15 August 1958. Section 39(1) provides that it applies to arbitrations commenced after that date. Its objective as expressed in the long title is “to make provision for Arbitrations”.

7 Section 2 of the Act provides, inter alia, that the term “arbitration agreement” means “a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not”. It also provides that, for the purposes of the Act, “Court” means the High Court or a Judge.

8 Part II of the Act is headed “Effect of Arbitration Agreements” and comprises sections 3 to 7. Section 3 relates to the tenure of arbitrators. It reads:

The authority of an arbitrator or umpire appointed by or by virtue of an arbitration agreement shall, unless a contrary intention is expressed in the agreement, be irrevocable except by leave of the court.

9 Part III comprises sections 8 to 13. Those provisions relate to arbitrators and umpires. Of them, sections 8 and 12 are relevant. Section 8 reads:

Unless a contrary intention is expressed therein, every arbitration agreement shall, where no other mode of reference is provided, be deemed to include a provision that the reference shall be to a single arbitrator.

10 Section 12 empowers the court to appoint an arbitrator or umpire, under an arbitration agreement, in certain circumstances. The relevant portion of that provision reads:

In any of the following cases –

• (a) where an arbitration agreement provides that reference

  shall be to a single arbitrator, and all the parties do not after differences have arisen, concur in the appointment of an arbitrator;

• (b) …

• (c) …

• (d) …,

  any party may serve the other parties or the arbitrators, as the case may be, with a written notice to appoint, or as the case may be, concur in appointing, an arbitrator… and if the appointment is not made within seven clear days after the service of the notice, the Court may on application by the party who gave the notice, appoint an arbitrator…who shall have the like powers to act in the reference and make an award as if he had been appointed by consent of all parties.

11 Section 27 is contained in Part VI. Though having no direct relevance, it is of some interest. Sub-paragraph (1) of that provision acknowledges the power of the court to grant leave to revoke the authority of an arbitrator who is not, or may not, be impartial.

12 Part VII is headed “References under Order of Court”. It comprises sections 30 to 34 and regulates court ordered references. These are distinct from references made under arbitration agreements. I will reproduce the following portions of these provisions by way of illustration:

• Section 30 (1): Subject to rules of court and to any right to have particular cases tried with a jury, the Court may refer to an official or special referee for enquiry or report any question arising in any cause or matter, other than a criminal proceeding by the Crown.

• (2): The report of an official or special referee may be adopted wholly or partially by the Court and if so adopted may be enforced as a judgment or order to the same effect.

Section 31: In any cause or matter (other than a criminal proceeding by the crown)-

• (a) If all the parties interested who are not under disability consent; or

• (b) if the cause or matter requires any prolonged examination of documents or any scientific or local investigation which cannot in the opinion of the Court conveniently be made before a jury or conducted by the Court through its other ordinary officers; or

• (c) if the question in dispute consists wholly or in part of matters of account,

the Court may at any time order the whole cause or matter, or any question or issue of fact arising therein, to be tried before a special referee or arbitrator agreed on by the parties, or in default of agreement, before an official referee or officer of the Court.

• Section 32 (1): In all cases of reference to an official or special referee or arbitrator, the official or special referee or arbitrator shall be deemed to be an officer of the Court and, subject to rules of court shall have such authority and conduct the reference in such manner as the Court may direct.

• (2): The report or award of any official or special referee or arbitrator, or any such reference shall, unless set aside by the Court, be equivalent to the verdict of a jury.

• (3): The remuneration to be paid to an official or a special referee or arbitrator to whom any matter is referred under an order of the Court shall be determined by the Court.

Section 34: The Court of Appeal shall, on an appeal, have all such powers as are conferred by the provisions of this Act on the Court in relation to references.

13 The other relevant provision is Section 37. It reads:

This Act shall, except as herein expressly mentioned, apply to any arbitration to which the Crown, or any public officer in respect of any act or omission by him or by his department is a party, But nothing in this act shall empower the court to order any proceedings to which the crown is a party or any question or issue in any such proceedings, to be tried before any referee, arbitrator, or officer without the consent in writing of the governor-general. (My emphasis)

14 In some degree, the success of a facet of the Government's application hinges on the interpretation of this provision. For convenience, I shall refer to the part of the provision beginning with the words “but nothing in this Act” as “the second part of section 37” and the words preceding that phrase as “the first part of section 37”.

BACKGROUND TO THE APPLICATION

15 The background to the application is best understood in the context of some of the statutory provisions identified above.

16 The agreement does not stipulate a mode of reference. Hence, section 8 of the Act operates to import a provision that the reference shall be to a single arbitrator.

17 As events unfolded, disputes arose under the agreement which the parties were unable to resolve. Fiton gave notice of their intention to go to arbitration and called on the Government to concur in the appointment of an arbitrator.

18 The parties did not reach any agreement in this regard and on 21 May 2008, Fiton filed an Originating Summons (“the Originating Summons”), in which it sought, inter alia, an order “pursuant to Section 12 of the Act that some fit and proper person be appointed to act as arbitrator” under the agreement.

19 However, before the Originating Summons was heard, the Government agreed to the appointment of Mr. Veeder as arbitrator. He was one of Fiton's nominees. The parties agreed that the court proceedings be adjourned sine die and that Mr. Veeder be informed of his appointment.

20 Fiton's counsel, Mr. Barry Gale, Q.C. and Mr. Martin Valasek, notified Mr. Veeder of his appointment and he, Mr. Veeder, communicated his acceptance to the parties by email on 26 November 2008.

21 Nonetheless, on 27 November 2008 when the Originating Summons came before Goodridge, J., the parties consented to an order (“the Consent Order”) that Mr. Veeder be appointed to act as arbitrator. That order has not been drawn up and perfected.

22 After accepting the appointment, Mr. Veeder sought to get the arbitration proceedings underway. However, for reasons which I reveal shortly, the Government developed doubts about his independence and impartiality. This led to the filing, by the Government, of a summons on 26 February 2009 (“the Original Summons”).

23 By the Original Summons, the Government sought orders for Mr. Veeder's removal; the appointment of a new arbitrator by the court, failing agreement by the parties on an appointment within twenty one days; and a stay of the arbitral proceedings. The ground of the application, as detailed on its face, was as follows:

Mr. Veeder's participation in pending arbitration proceedings with Mr. Yves Fortier Q.C. as one of the applicant's counsel gives rise to serious issues of Mr. Veeder's independence and/or...