Disciplinary Proceedings as Arbitration?

We usually think of arbitration as a method of dispute resolution where parties refer their dispute to an impartial tribunal (consisting of one or more arbitrators) and where the parties agree to be bound by the tribunal’s decision (known as an “award”).”

What, however, are the essential elements that make a set of proceedings an arbitration?

In the case of The England and Wales Cricket Board Ltd v Kaneria [2013] EWHC 1074 (Comm), the English court had to determine whether disciplinary proceedings before the appeal panel of the England and Wales Cricket Board Ltd (the “ECB“) constituted arbitration proceedings for the purposes of the UK Arbitration Act 1996. Mr Danish Kaneria, the defendant, had been issued a lifetime ban from playing cricket in England and Wales by the Cricket Disciplinary Council’s disciplinary panel (the “CDC Panel“). He appealed that decision to the ECB appeal panel.

The ECB then took out an application for the summons of a central witness to these proceedings pursuant to the UK Arbitration Act 1996. If the proceedings before the appeal panel were arbitration proceedings, the English court would have the power to grant ECB’s application pursuant to section 43 of the Arbitration Act 1996.

The key dispute between the parties was whether there was an unequivocal agreement to arbitrate and whether the proceedings in question had the characteristics of an arbitration (see paragraphs (see paragraph [8] and [9]). Furthermore, this was a binary issue i.e. either the appeal panel proceedings were either arbitration proceedings, or the “internal disciplinary procedure” of a body to which the parties had subscribed to (see paragraph [11]).

What is Arbitration?

The English court looked to the Oxford English Dictionary, which defined “arbitration” as “[t]he settlement of a question at issue, by one to whom the conflicting parties agree to refer their claims in order to obtain an equitable decision” (see paragraph [2]).

Citing obiter in the English High Court case of Walkinshaw v Diniz [2000] 2 All ER (Comm) 237, the learned judge considered the following series of factors to determine if the appeal panel proceedings was an arbitration (see paragraph [30] to [41]):

  • (i) It is a characteristic of arbitration that the parties should have a proper opportunity of presenting their case.
  • “(ii) It is a fundamental requirement of an arbitration that the arbitrators do not receive unilateral communications from the parties and disclose all communications with one party to the other party.”
  • “(iii) The hallmarks of an arbitral process are the provision of proper and proportionate procedures for the provision and for the receipt of evidence.”
  • “(iv) The agreement pursuant to which the process is, or is to be, carried on (“the procedural agreement”) must contemplate that the tribunal which carries on the process will make a decision which is binding on the parties to the procedural agreement.”
  • “(v) The procedural agreement must contemplate that the process will be carried on between those persons whose substantive rights are determined by the tribunal.”
  • “(vi) The jurisdiction of the tribunal to carry on the process and to decide the rights of the parties must derive either from the consent of the parties, or from an order of the court or from a statute, the terms of which make it clear that the process is to be an arbitration.”
  • “(vii) The tribunal must be chosen, either by the parties, or by a method to which they have consented.”
  • “(viii) The procedural agreement must contemplate that the tribunal will determine the rights of the parties in an impartial manner, with the tribunal owing an equal obligation of fairness towards both sides.”
  • “(ix) The agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law.”
  • “(x) The procedural agreement must contemplate a process whereby the tribunal will make a decision upon a dispute which has already been formulated at the time when the tribunal is appointed.”

Whilst the above indicia of arbitration were obiter, the learned judge held that they were “the kind of factors which are plainly material to the consideration of whether or not proceedings are truly arbitral in nature. In most cases there will rarely be any doubt about that. But where doubts arise then these are the indicia of arbitration” (see paragraph [47]).

The English High Court held that the appeal panel proceedings had the characteristics of an arbitration and that there was an unequivocal agreement between the parties to submit to that arbitration. This finding was made upon a review of:

  • an undertaking signed by the Defendant to, inter alia, abide by the ECB Cricket Discipline Regulations, i.e., the Regulations of the Cricket Disciplinary Commission (the CDC) (the “Undertaking“) (see paragraph [14]);
  • the constitution of the CDC; and
  • the ECB Articles of Association.

(A) Lack of Independence

The Defendant made two overarching arguments in his defence. First, the Defendant argued that the proceedings could not be an arbitration as the constitution of the appeal panel was by a non-independent person and made up of tribunal members who were themselves not independent or were part of the closed community of cricket (including the ECB) (see paragraph [43]):

“First he [counsel for the Defendant] said that the chairman of the CDC panel, which found against the Defendant was the person responsible for choosing the appeal panel. Second, he said that the panel at the disciplinary hearing and the appeal panel are both comprised of persons with strong connections with cricket and with the ECB. A witness statement descended into considerable detail as to the biographical background of those involved. Four out of five of the appeal panel members are said to be committee members of the ECB, unlike in [Walkinshaw v Diniz ] where three international lawyers of repute were selected who had no connection to Formula 1 at all. Moreover, they were all appointed by the ICC, which was plainly an independent arbitral body. Thirdly, the member who was nominated by the Professional Cricketers’ Association, that is a body of which the Defendant was a member and which effectively acted as his trade union, did not counterbalance that feature because the Professional Cricketers’ Association had, in fact, supported and helped Mr Westfield, in his mitigation when he himself pleaded guilty to spot fixing. He was the chief witness against the Defendant at the disciplinary hearing and is the person in respect of whom the witness summons is being sought for the appeal hearing. Fourthly, it was said that the Defendant had no say in the appointment of the CDC on the appeal panel.

The High Court disagreed. The learned judge considered that it was “clear” that there was no close connection between members of the CDC and the ECB and that membership of one was separate from the other (see paragraph [44]).  Furthermore, the chairman of the CDC was in fact an independent lawyer (a QC) (see paragraph [45]). Finally, the close connection that members of the ECB and CDC had with cricket was not a disqualifying factor. The learned judge held at paragraph [45] that,

“… The fact that members of the CDC have a strong connection with cricket and may be members of county cricket clubs or of the committee of such clubs, where such clubs themselves are subject to the ECB regulations, is not a factor which imperils their impartiality or independence for the purpose of decision making. Their knowledge and background as set out in the criteria for membership is clearly thought to be beneficial to the process because of their understanding of the world of cricket and, indeed, of the pressures to which players are subject, most of the members of the CDC being former professional players themselves.

The High Court also considered the lack of independence was not a separate ground for removal of an arbitrator unless that lack of independence gave rise to justifiable doubts about the arbitrator’s impartiality (see paragraph [46]). The learned judge noted the holding of the English Court of Appeal case of Stretford v The Football Association Ltd, [2007] EWCA Civ 238 at paragraph [39],

“As to independence we note from paragraph 101 of the Departmental Advisory Committee (“DAC”) Report on the Arbitration Bill that the DAC expressly considered whether to include justifiable doubts as to the independence of the arbitrator as grounds for his removal. It decided not to do so because arbitration is consensual and “lack of independence, unless it gives rise to justifiable doubts of the impartiality of the arbitrator is of no significance”. It added that there would be no point in adding lack of independence as a separate ground unless it could entitle the court to remove an arbitrator where the lack of independence did not give rise to justifiable doubts about the impartiality of the arbitrator. Thus lack of independence is only relevant if it gives rise to such doubts, in which case the arbitrator can be removed for lack of impartiality.”

(B) No clear and unequivocal agreement to arbitrate

The Defendant also sought to argue that there was no clear and unequivocal agreement to arbitrate in that he had not unequivocally “waived [his] right to a public hearing and to a fair trial under Article 6 [of the European Convention on Human Rights]” (see paragraph [51] to [53]). The Defendant placed reliance on the need for an arbitration agreement to be in writing or evidenced in writing under the Arbitration Act 1996 (see paragraph [51]) as well as the cases of Stretford and Di Placito v Slater [2004] 1 WLR 1605 for the proposition that “a waiver [was] to be made in an unequivocal manner if it is to be effective” (see paragraph [52] and [53]).

The High Court rejected these arguments and held that the Undertaking (with its incorporation of the relevant rules and regulations) sufficed to established that there had been an unequivocal agreement to a private process – a process which had the hallmarks of arbitration (see paragraph [57]).

Finally, the High Court rejected the argument that disciplinary proceedings could not be the subject of arbitration (see paragraph [58]). The learned judge further noted that “[m]any other sporting bodies adopt arbitration processes for disciplinary offences and there is no reason in principle against the operation of arbitration in such circumstances“.

Sports Arbitration

This case should be distinguished from sports arbitration e.g. under the auspices of the Court of Arbitration for Sports (Tribunal Arbitral du Sport) (“CAS“). That requires parties to formally submit their dispute, or have agreed to submit any dispute which may arise between them, to the CAS. Rule 27 of the Code 2013 states,

“These Procedural Rules apply whenever the parties have agreed to refer a sports-related dispute to CAS. Such reference may arise out of an arbitration clause contained in a contract or regulations or by reason of a later arbitration agreement (ordinary arbitration proceedings) or may involve an appeal against a decision rendered by a federation, association or sports-related body where the statutes or regulations of such bodies, or a specific agreement provide for an appeal to CAS (appeal arbitration proceedings).

Such disputes may involve matters of principle relating to sport or matters of pecuniary or other interests relating to the practice or the development of sport and may include, more generally, any activity or matter related or connected to sport”.

Conclusion

In Singapore, quasi-judicial determinations are subject to the oversight of the Singapore courts through a process called judicial review, which looks mainly at whether the process and the hearing has been fair and whether the result reached is one that a reasonable person or tribunal could have arrived at. Internal disciplinary proceedings of private clubs can also be subject to judicial review (see Kay Swee Pin v. Singapore Island Country Club [2008] 2 SLR(R) 802).

However, as such (disciplinary) proceedings are not court proceedings, parties to those proceedings generally cannot approach the courts to seek interim/interlocutory relief and remedies unless there is a statutory provision for it (see e.g. section 11 of the New Zealand Institute of Chartered Accountants Act 1996 in respect of witness summons). In contrast, the Singapore courts have powers to grant interim relief as well as summon witnesses in aid of (international commercial) arbitration proceedings (see section 12A and 13 of the Singapore International Arbitration Act (Cap. 143A)).

Readers should note that the International Arbitration Act is styled as “[a]n Act to make provision for the conduct of international commercial arbitrations based on the Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law and conciliation proceedings and to give effect to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and for matters connected therewith”.

Furthermore, the UNCITRAL Model Law does provide a definition of “commercial” (see footnote 3).

“The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business co-operation; carriage of goods or passengers by air, sea, rail or road.”

While this definition is expansive, it is questionable as to whether disciplinary proceedings between a member of a sports association and the association itself may be considered “commercial“. For example, when the dispute involves a claim that the member was improperly not chosen to represent the association at a meet or where the sports association wishes to expel the member for infringement of a code of conduct.

On the other hand, where the infringement involves a failure to pay membership dues and the removal of certain privileges (or expulsion), it is definitely arguable that the relationship and dispute in question is a commercial one. This is especially so where the association in question is in the nature of a private club as the relationship between the association and the member is very much commercial and contractual.

In any event though, this English case is a useful reminder that arbitration is a method of dispute resolution which can be used for a variety of purposes and not simply within the confines of a commercial contractual relationship between parties.

About Shaun Lee

International Dispute Resolution and Arbitration lawyer. Fellow of the Chartered Institute of Arbitration. Panel of Arbitrators and Panelist for DNDR at the KLRCA.
This entry was posted in Arbitration, UK and tagged , , , , , , , , , . Bookmark the permalink.

One Response to Disciplinary Proceedings as Arbitration?

  1. Pingback: Arbitration of Trust Disputes | Singapore International Arbitration Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s