I'd say it's almost fair even though not 100%, you can't hope such competition will 100% since no one is wrong and no one is right. It's depends on their perspective to determine which user is deserve with the nomination. Sometime people giving away merit because they want to thank those voters for voting him and to be honest it's not really a big problem as they're only give 1-2 merits. You may want to check this thread 10th anniversary art contest


With this rules at least we can deny newbie or sock puppet account in order to vote his main account. If you think this rules isn't strict enough and the voters aren't fair, what's your suggestion to solve this?