In O v S [2026] HKCFI 4910, the Court of First Instance considered an application to set aside a partial arbitral award made in an HKIAC arbitration seated in Hong Kong. The applicant relied on two grounds: first, alleged apparent bias arising from the presiding arbitrator’s involvement in a prior arbitration featuring an overlapping factual witness; and secondly, an alleged failure by the Tribunal to observe the parties’ bifurcation agreement as to liability and quantum.
The apparent-bias complaint arose because the factual witness (“Witness Z”) gave evidence in an earlier, unrelated arbitration chaired by the presiding arbitrator (“Member R”) in which the party putting forward the witness lost, and Member R had not disclosed that fact in the subject arbitration. Witness Z said that he had not recognised Member R during the later hearing, while the Court accepted that, given the temporal proximity, it must have “rung the bell” to Member R that Witness Z had appeared in the prior arbitration.
DHCJ Gary CC Lam applied the familiar test: the question is whether an objective fair-minded and informed observer, having considered the relevant facts, would conclude that there was a real possibility that the tribunal was biased. The Court also emphasised that there must be a logical connection between the conduct said to give rise to the apprehension of bias and the possibility of departure from impartial decision-making.
A central point in the judgment is that the mere fact that a judge, or by analogy an arbitrator, had previously commented adversely on a party or witness, or found that person’s evidence unreliable, will not without more found a sustainable objection. The position may be different where there is personal friendship or animosity, close acquaintance, a previous rejection of the witness’s evidence in such outspoken terms as to suggest an inability to approach the evidence with an open mind, or views expressed in extreme and unbalanced terms.
The Court treated the position under commentaries and the IBA Guidelines as an important starting point, but not as an absolute rule: although prior consideration of a witness’s evidence in an unrelated arbitration is not ordinarily a ground for disqualification or disclosure, disclosure may still be required where, for example, the adjudicator previously made extreme adverse comments on the witness’s integrity. At the same time, a failure to disclose or breach of a duty to disclose does not automatically establish a real possibility of bias, but is one factor for the fair-minded and informed observer to consider.
A key factor in the Court’s decision is that a fair-minded and informed observer would read the Partial Award itself. Although Witness Z’s credibility had been put in issue, the Tribunal did not ultimately deal with Witness Z’s credibility or reliability in the Partial Award, but instead relied on inherent probability and documentary evidence. A fair-minded observer would not see the Tribunal as having made any unfavourable finding against Wtiness Z’s credibility, and therefore would not see any real possibility of bias.
Although the Court recognised that the losing party’s inability to know what happened in the prior arbitration was its “most attractive argument”, it held that this remained only a doubt and did not amount to a real possibility that Member R was biased. The Court further held that, even if apparent bias had been established, the award would not have been set aside because the applicant bears the burden of showing prejudice and the outcome would have been the same.
The Court also rejected the separate bifurcation challenge, holding that the liability or recoverability of additional losses had not been put in issue for determination in Phase 1 or Phase 2, that the Tribunal was entitled to raise that issue of its own motion and deal with it together with Phase 2 issues as a matter of proper case management, and that there was no breach of the bifurcation agreement or the bifurcation order.
Key takeaways
- Prior exposure to a factual witness in another arbitration is not, without more, a ground for disqualification or disclosure. However, disclosure may be required if the arbitrator previously made extreme adverse comments on the witness’s integrity.
- A fair-minded and informed observer considering an apparent-bias challenge to an arbitral award will read the award itself, not assess the complaint in isolation. The award may show that there was no apparent bias, and/or it may show that any apparent bias could not have affected the outcome and thus would not have caused prejudice.
Read the judgment here at: https://legalref.judiciary.hk/lrs/common/ju/ju_frame.jsp?DIS=184494&currpage=T
Dr Benny Lo and Mr Jiang Zixin (led by Mr Ambrose Ho SC), represented the defendant.
