In a construction dispute between the subcontractor and the main contractor, the chairman of a tribunal was challenged for failing to allow equal opportunities to the parties in presenting their case, whilst issuing various procedural directions purportedly on behalf of the tribunal.
The relevant arbitration authority reviewing the challenge, rejected the reasons argued therein but nevertheless removed the said chairman from the tribunal on the basis of procedural irregularities that were not pleaded in the challenge but were nevertheless independently identified.
Reasons for the Challenge
The challenge was submitted against the chairman of the tribunal because circumstances arose raising doubts over his neutrality or independence which became known after the chairman’s appointment, as detailed below.
Violation of a party’s fundamental right to choose its own representatives
In the circumstances, the attorneys of one party were duly authorised pursuant to a notarised Power of Attorney yet their attendance was forbidden by the chairman, on the basis of his interpretation of meaning of Ministerial Resolution No.972 of 2017 which relates to the rights of audience for UAE advocates.
Prior to the challenge the said chairman initially stated that each party should ensure that it issues a PoA in favour of a UAE local advocate and that the latter may then delegate a representative to attend the hearing sessions through an authorisation (or delegation) letter.
Although this requirement was unnecessary, as the said Ministerial Resolution did not apply to commercial arbitration proceedings, it was nevertheless complied with by the party concerned.
However, subsequently, the chairman introduced new requirements and stated that he requested that a UAE local advocate of the firm representing a party confirms in writing that he would conduct the party representation himself at the evidentiary hearing, pursuant to what the chairman understood the Ministerial Resolution to denote, and that the presence of any non-UAE attorney would be limited to administrative tasks only.
It was therefore argued in the challenge, that the said Ministerial Resolution relates exclusively to Court administered proceedings, some of which are referred to as “arbitration” before “Tribunals” in Court practice and does not apply to commercial arbitration.
As such the challenge further argued that the chairman deprived one of the parties to represent itself through its duly empowered attorneys, and unreasonably deprived it of the opportunity to present its case.
Failure to provide sufficient notice to conduct a hearing
Furthermore, it was argued within the challenge, that the chairman imposed an unreasonable notice of only eight working days to conduct a final evidentiary hearing in a matter where more than AED 125 million (of claims and counterclaims) were at stake, during very restrictive periods.
Specifically, it was argued that this amounted to a deprivation of a party’s opportunity to properly present its case thus raising justifiable doubts as to the chairman’s neutrality or independence.
Failure to allow sufficient time for witness examination
Additionally, in the challenge it was also argued that the chairman’s directions deprived a party of its right to submit its evidence by ordering the allocation of only 90 minutes for the entire process of factual and expert witness testimony.
Reluctance to order the oral testimony of a party’s expert witness
Furthermore, the chairman refused to acknowledge that any witness statement or report submitted by one party, should be dismissed in circumstances where that party refused to request the said witness to attend the evidentiary hearing for cross examination.
Summary decision of the arbitration authority
In its summary decision, the arbitration authority removed the chairman for the tribunal on the basis that, in the process of issuing his directions (as detailed above) he failed to consult with the remaining tribunal members.
This, the arbitration authority was able to determine by independently reviewing correspondence exchanged between the tribunal members which clearly showed that the chairman issued the said directions in a way that rendered them essentially his own.
Arbitration very much depends on the professional/cultural background and experience of the tribunal members, as well as the rules and procedures that they choose to adopt.
Instances of a tribunal member challenge, particularly a successful one, are relatively rare. However, whenever they do arise, they usually involve circumstances where parties’ fundamental rights are seen as being violated and this entails the potential for the arbitral process becoming less effective than it is generally intended to be.