Overview:

This case concerned whether an arbitrator’s failure to disclose a concurrent arbitration appointment created a reasonable apprehension of bias under the UNCITRAL Model Law.

Key Facts:

• The dispute arose from the alleged wrongful termination of a 2007 Master Franchise Agreement (MFA) by Aroma Franchise Company.
• Arbitration proceedings were governed by the Model Law, emphasizing impartiality.
• During the arbitration, the arbitrator accepted a second appointment involving the same counsel but unrelated issues, without disclosure.

Lower Court Ruling:
The arbitrator’s nondisclosure of the concurrent appointment was deemed to create a reasonable apprehension of bias, invalidating the arbitral award.

Court of Appeal Decision:

1. Disclosure Obligation:

   • Under the Model Law, disclosure is required if circumstances likely create justifiable doubts about impartiality.
   • The second appointment, involving no overlapping parties or issues, did not meet this standard.

2. Reasonable Apprehension of Bias:

   • The Court emphasized the presumption of impartiality for arbitrators.
   • Subjective views or uncommunicated expectations of the parties were irrelevant.

3. Lower Court Error:

   • The lower court improperly applied subjective disclosure standards and relied on expectations never conveyed to the arbitrator.

Outcome:

The Court of Appeal reversed the lower court, reinstating the arbitral award. The case was remitted to address unresolved procedural issues.

Costs: Appellants awarded $40,000, with further costs to be determined.