Conflict of Interest in Arbitration: Avoiding Traps for the Unwary

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Conflict of Interest in Arbitration: Avoiding Traps for the Unwary

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Section 8 and 45 of the Arbitration and Conciliation Act (“ACA”) impose a duty of disclosure of circumstances likely to give rise to any justifiable doubts as to the impartiality or independence of an arbitral tribunal. Thus, the sections mandate a duty of disclosure of any conflict of interest by an arbitrator when approached with an appointment opportunity, for domestic and international arbitration. This duty is a continuing obligation and is expected to subsist throughout the arbitral proceedings.

Similarly, in a potential conflict scenario, both provisions also permit parties to challenge an arbitrator within fifteen (15) days of becoming aware of the constitution of the arbitral tribunal, or of becoming aware of the conflict scenario, as the case may be.

As simple and straightforward as these obligations appear, their application and interpretation within the context of factual scenarios are not always as simple. What is more, the ACA itself does not provide much direction on the yardstick or guidelines for evaluating circumstances likely to give rise to any justifiable doubts as to an arbitrator’s impartiality or independence.

In Episode 4 of our Special Legal Podcasts, our seasoned dispute resolution experts: Abimbola Akeredolu, SAN, FCIArb. (Partner); Chinedum Umeche, FCIArb. (Partner); Adeola Agunbiade-Adeyemi, MCIArb. (Senior Associate); and Sixtus Iwuoha (Associate) dissects the delicate and topical issue of conflict of interest in arbitral proceedings. The speakers shed some light and provide useful insights to parties and counsel in arbitral proceedings, on factors to bear in mind during the appointment process, as the question of conflict is fast becoming one of the go-to reasons for setting aside an arbitral award.