The alleged bias of the chief magistrate, Emma Arbuthnot, in permitting Uber to operate in London has been raised in a courtroom challenge.

In June, the judge approved a 15 month probationary licence but then agreed not to hear any future Uber-related cases after the Observer revealed her husband works for a strategy firm that advised one of Uber’s largest investors.

At the high court on Wednesday, the counsel for United Cabbies Group, who oppose Uber running services in the capital, argued that Arbuthnot had not relied on the correct, statutory test in her decision and had failed to check whether her family had a financial interest in the issue.

Robert Griffiths QC, representing United Cabbies, told the court in written submissions that the chief magistrate should have asked her husband, Lord Arbuthnot, about his company’s involvement.

Lord Arbuthnot, a former Tory MP for Wanstead and Woodford and chair of the defence select committee, had been a director of SC Strategy Ltd. One of the company’s clients is the Qatar Investment Authority (QIA) which, Griffiths told the court, is “widely reported to be a significant financial investor in Uber”.

Griffiths said: “In this case a simple question by the district judge of her husband – ‘Can you please check on whether you or any of the companies in respect of which you are a chairman, director or consultant have any direct or indirect association with Uber or Transport for London?’ – would have resulted in the identification of any potential conflicts of interest which the judge would either have been able to disclose to the parties or enable her in a timely manner to recuse herself from hearing the case.”

He added: “In our submission, there is a duty on a judge especially when dealing with high profile matters of this kind which have a significant element of public interest to check on whether there are any likely disqualifying interests which she should disclose to the parties on the basis that prima facie they may evidence a conflict of interest in respect of which the judge should recuse herself … Once the suspicion of bias has been created it colours the mind of even the fair minded and informed observer and the perception of continuing bias is perpetuated.”

Addressing the high court, Griffiths alleged that Arbuthnot did not have legal powers to grant Uber a probationary licence on the grounds that they “may become a fit and proper person” to operate the service. The correct test, he said, was whether or not they had already reached that standard.

Philip Kolvin QC, counsel for Uber, told the court: “The attack on the judge’s impartiality and decision-making by non-parties to the appeal, who also happen to be trade competitors of Uber, is without substance and should be rejected.

“It is clear that the judge understood and applied the correct test, finding that Uber was, at the time of the decision, fit and proper to hold the licence.”

Uber’s application for a five-year licence was rejected by TfL in September 2017.

TfL had a number of concerns with the firm, including failure to report criminal allegations to the police and the use of technology to thwart regulators outside the UK.

The chief magistrate issued the shorter licence with stringent conditions after concluding the firm had made “rapid and very recent” changes.

The appeal continues. The judgment is expected to be reserved.

Following a separate Uber case involving its operations in Reading, allegations have this week been made about another judge, Lord Justice Flaux, and his connections to the tech firm.

Flaux recently heard a high court case in which Reading council appealed against a decision in Uber’s favour. Flaux’s son, it is claimed, works for an insurance company which has links to Uber.

Responding to the allegation, a spokesman for the judiciary said: “Lord Justice Flaux was not aware of any connection between Aon (where his son is an associate director specialising in political risks insurance) and Uber. This is the first time that any suggestion of a connection has been brought to the judge’s attention.

“The judge would consider on its facts whether any future case constituted a perceived conflict of interest which required him either to declare it to the parties or to ask that another judge hear the case. He has no other cases pending which involve Uber.”