The leading judgment and the concurring judgment comprehensively set out the arbitrator's duty of impartiality and obligations of disclosure, and the assessment of whether there has been a failure of the relevant duties and obligations. The London Maritime Arbitrators Association (the LMAA) intervened in the appeal to the Supreme Court by way of written submissions.
The facts and judgment
A series of insurance policy related arbitrations took place following the explosion incident that happened at the Deepwater Horizon rig in the Gulf of Mexico in 2010. Mr Ken Rokison QC was appointed as arbitrator for three of the arbitrations where a common party, the insurer, Chubb, happened to be a party in two of the arbitrations. The policy was in the Bermuda Form. The Claimant, Halliburton, sought the removal of Mr Rokison as arbitrator in the arbitration between itself and Chubb, as they alleged that the circumstances gave rise to justifiable doubts as to Mr Rokison’s impartiality. The court at first instance and the Court of Appeal dismissed the claim. The Supreme Court also unanimously dismissed Halliburton’s further appeal but made several important decisions which may affect how some maritime arbitrations are conducted moving forward.
Lord Hodge, in his leading judgment, discussed in depth an arbitrator’s cardinal duty of impartiality and the legal duty to disclose, in conjunction with the arbitrator’s obligation to respect the confidentiality owed to the private and consensual nature of arbitration.
He stated that in cases where an allegation of arbitrators’ apparent bias is involved, the objective test to determine the issue is “whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased”. The duty to disclose is not merely a good practice, but a legal duty that arbitrators have to fulfil, so long as it “does not override the arbitrator’s duty of privacy and confidentiality in English law”. The failure to disclosure may in certain circumstance amount to apparent bias.
In response to the principal issues in this appeal, unless parties agree otherwise, arbitrators have a legal duty to disclose information that may reasonably give rise to the appearance of bias, depending upon the custom and practice. An arbitrator’s multiple related appointments with only one common party is a matter that may have to be disclosed. However, the relevant tests for disclosure should also take account of the particular characteristics and customs of different fields of arbitration.
The implication for maritime arbitration/arbitrators
The Court unequivocally recognised that maritime arbitration is less likely to give rise to apparent bias where one arbitrator is appointed in multiple related references. As a consequence of the characteristics of maritime contractual chains and disputes, it is in fact a common, accepted and desirable practice, which parties are familiar with, to appoint the same arbitrator in overlapping arbitrations.
“As…[the] LMAA have shown, it is an accepted feature of their arbitrations that arbitrators will act in multiple arbitrations, often arising out of the same events. Parties which refer their disputes to their arbitrations are taken to accede to this practice and to accept that such involvement by their arbitrators does not call into question their fairness or impartiality. In the absence of a requirement of disclosure of such multiple arbitrations, the question of the relationship between such disclosure and the duty of privacy and confidentiality does not arise.”
For the time being, the Halliburton v Chubb judgment does not trigger significant changes to the current maritime arbitrator's practice as it may do for other areas of arbitration. However, it might be prudent for an arbitrator to make disclosure of multiple appointments in related references following Halliburton v Chubb. No doubt the LMAA will, in due course, make amendments to its Rules in relation to an arbitrator’s obligation to disclose in certain circumstances.
There are, at the moment, no express sanctions if an arbitrator fails to disclose his/her appointment in multiple arbitrations. In Halliburton v Chubb, Mr Rokison was found to have failed in his duty to disclose his appointments but the Court held that a fair minded observer would not conclude the circumstances gave rise to justifiable doubts about his impartiality, which is why Halliburton’s appeal was dismissed.