S 15 of the Construction Industry Payment and Adjudication Act 2012 (“CIPAA 2012”) provides that an aggrieved party may apply to the High Court to set aside an adjudication decision if “(c) the adjudicator has not acted independently or impartially”. This sounds very akin to the rule against bias which is generally accepted as the 1st rule of natural justice.
In Rosha Dynamic Sdn Bhd v Mohd Salehhodin bin Sabiyee & Ors and other cases  MLJU 1222, the learned Wong Kian Kheong J, however, was of the view that the 1st rule of natural justice “overlaps with” but is “distinct from the Duty to be Impartial” envisaged by s 15(c) CIPAA 2012. The learned judge goes on to hold that the Duty to be Impartial must be borne out:
- in fact; and
- in the objective perception of a “fair-minded and informed observer” as determined by the UK Supreme Court in Halliburton Co v Chubb Bermuda Insurance Ltd (formerly known as Ace Merbuda Insurance Ltd) & Ors (International Court of Arbitration of the International Chamber of Commerce & Others Interveninge)  3 WLR 1474.
Unfortunately, the learned judge did not set out in greater detail his thoughts on how the 1st rule of natural justice can be distinguished from the Duty to be Impartial (i.e. the difference between s 15(b) and (c) CIPAA 2012). A future attempt by the judiciary to distinguish these two subsections would be helpful to determine whether the scope for the setting aside of an adjudication decision under s15(c) CIPAA 2012 could in fact be wider than the 1st Rule of natural justice.
The learned judge then went on to discuss the test applicable in order to show bias on the part of the adjudicator. On the test, there are 2 tests that may be applied:
- the “real danger of bias” test (“Real Danger Test”) which has been applied in 6 Federal Court cases; and
- the “real possibility of bias” test (“Real Possibility Test”) which has been applied in the Federal Court case of Bar Council v Tun Dato Seri Arifin bin Zakaria & Ors  4 MLJ 773.
The learned judge then goes on to express his preference for the Real Possibility Test (also known as the Reasonable Suspicion Test) over and above the Real Danger Test. This is to ensure that the test against bias of an adjudicator would be in line with the test applicable for judges and arbitrators. Additionally, applying the Real Possibility Test would also be in line with UK, Singaporean and other Commonwealth jurisdictions.
In short, to allege bias against an adjudicator, there must be a “reasonable suspicion” or a “real possibility” that the adjudicator would be biased, either in fact or in perception. The burden to prove such “reasonable suspicion” or “real possibility” would lie with the party seeking to set aside the adjudication decision under s 15(c) CIPAA 2012.
Author: Chan Kheng Hoe ([email protected])