Halliburton Company v Chubb Bermuda Insurance Ltd [2018] EWCA Civ 817:

In this case1 the Court of Appeal assessed the extent to which an arbitrator could accept appointments in multiple references concerning the same or overlapping subject matter, without disclosure to the parties in the other arbitrations.

The case involved claims arising from an explosion and fire on the Deepwater Horizon oil rig which killed 11 crewmen and caused environmental damage along the US Gulf Coast. A group of plaintiffs sued Halliburton. Halliburton then made a claim under its liability insurance policy with Chubb. Chubb rejected the claim and Halliburton commenced arbitration.

M was appointed as the arbitrator in international commercial arbitration proceedings between Halliburton and Chubb. Halliburton subsequently discovered that Chubb had also appointed M as an arbitrator in two other arbitration proceedings concerning an overlapping subject matter. Halliburton applied to have M removed as an arbitration under section 24(1)(a) of the Arbitration Act 1996, which provides that the court may remove an arbitrator when “circumstances exist that give rise to justifiable doubts as to his impartiality”. The application was dismissed by the Commercial Court and Halliburton appealed.

Halliburton claimed that the first instance judge had failed to properly consider the unfairness that would arise from M’s acceptance of the appointments in the other two proceedings involving Chubb and how M’s appointment in the other references compromised his ability to be impartial.

The court considered that “inside information” might be a concern in multiple references with overlapping subject matter, however, such a concern did not justify the inference of apparent bias. The court agreed with Dyson LJ’s dictum in AMEC Capital Projects v Whitefriars City Estates [2005] 1 WLR 723 where he considered that “the starting point is that an arbitrator should be trusted to decide the case solely on the evidence or other material adduced in the proceedings in question”. It was held that the mere fact that an arbitrator accepts appointments in multiple references concerning the same or overlapping subject matter with only one common party does not itself justify doubts of impartiality. As Dyson LJ stated, “[s]omething more is required”, that being “something of substance”.

As a matter of English law, an arbitrator is obliged to disclose facts and circumstances known to the arbitrator which would or might give rise to justifiable doubts about his impartiality. The Court of Appeal considered that as a matter of good practice in international commercial arbitration and as a matter of law, disclosure should have been made to Halliburton at the time of M’s appointment under the two other references. However, the Court of Appeal held that the fair-minded and informed observer would not conclude that there was a real possibility that M was biased if there was non-disclosure.