Australian Court Sets A High Bar For Challenges To Arbitrators

The Supreme Court of New South Wales has recently confirmed that, in Australia, the relevant test for challenges to the independence or impartiality of arbitrators is the 'real danger of bias' test, rather than the lower threshold of the 'reasonable apprehension of bias' test applicable at common law.

TAKEAWAY

Challenges to the independence or impartiality of arbitrators face a high bar in Australia. The relevant test requires a 'real danger of bias', which should be determined objectively based on existing circumstances (and not an evaluation of future matters or possibilities).

THE BIAS CHALLENGE

In Hancock v Hancock Prospecting Pty Ltd [2022] NSWSC 724, the applicants sought a declaration that there were justifiable doubts as to the impartiality and independence of one of the three arbitrators (the bias challenge). The arbitral tribunal had previously dismissed the challenge and the applicants applied to the Court under section 13 of the Commercial