Summary: The English Court of Appeal judgment this week in the Deepwater Horizon case between Halliburton v Chubb deals with the question of whether an arbitrator may accept appointments in multiple arbitrations and the extent to which the arbitrator needs to disclose such appointments to the parties to the other arbitrations.
The English Court of Appeal judgment this week in the Deepwater Horizon case between Halliburton v Chubb deals with the question of whether an arbitrator may accept appointments in multiple arbitrations and the extent to which the arbitrator needs to disclose such appointments to the parties to the other arbitrations .
The case involved claims under a Bermuda form insurance policy which were referred to arbitration in London. The party-nominated arbitrators were unable to agree the chairman and the English Commercial Court appointed M, who had been Chubb’s preferred candidate. Before appointment, M disclosed that he had previously acted as arbitrator in a number of arbitrations in which Chubb was a party, including arbitrations in which he had been appointed by Chubb, and was currently appointed in two references in which Chubb was involved.
After appointment, M accepted appointment as arbitrator in two further references involving claims against insurers also in connection with Deepwater Horizon. The appointments were not disclosed to Halliburton. Halliburton applied to the court to remove M as arbitrator. The application was dismissed by the Commercial Court.
Halliburton appealed. At the heart of the appeal was a contention that the judge failed to have proper regard to the unfairness which may arise where an arbitrator accepts appointments in overlapping references with only one common party – the essence of that unfairness being information and knowledge which the common party acquires unknown to the other party.
The Court of Appeal accepted such concerns but drew a distinction between concerns which a party may feel and concerns which would justify an inference of apparent bias. “Arbitrators are assumed to be trustworthy and to understand that they should approach every case with an open mind. The mere fact of appointment and decision in overlapping references does not five rise to justifiable doubts as to the arbitrator’s impartiality. Objectively this is not affected by the fact that there is a common party. An arbitrator may be trusted to decide a case solely on the evidence or other material before him in the reference in question and that is equally so where there is a common party.” The mere fact of an overlap does not give rise to justifiable doubts of impartiality. Something more would be required and that must be “something of substance”.
The Court of Appeal went on to consider when an arbitrator should make disclosure of circumstances which may give rise to justifiable doubts as to his impartiality.
The court concluded that, in the context of international commercial arbitration, as a matter of good practice, disclosure should have been made to Halliburton at the time of his appointment in the two further references. However, the court did not consider that the non-disclosure would have led a fair-minded and informed observer to conclude that there was a real possibility that the arbitrator was biased.
Halliburton’s appeal was dismissed.