On 27 November 2020, the U.K. Supreme Court in Halliburton Company v Chubb Bermuda Insurance Ltd (formerly known as Ace Bermuda Insurance Ltd) [2020] UKSC 48 ruled on the approach under English law to determining whether an arbitrator’s failure to make disclosure of appointments in multiple arbitrations with overlapping subject matter and only one common party gave rise to justifiable doubts as to his impartiality such that he should be removed (judgment available here).
In an expansive judgment which sought to clarify the state of English law on the topic, the Court held that:
- To determine whether there is an appearance of bias such that removal of an arbitrator is required, English law will apply the objective test of whether an informed, fair-minded observer would conclude that there is a real possibility of bias.
- While the obligation of impartiality applies equally under English law to party-appointed arbitrators and tribunal chairpersons, an informed, fair-minded observer will take into account (among other things) the debate in international arbitration as to the role of party-appointed arbitrators (including the different approaches taken in other jurisdictions to that role) and the fact that parties may in certain circumstances consequently place a heavier responsibility on the chair of the tribunal to be impartial.
- There may be circumstances in which the acceptance of appointments in multiple references concerning the same or overlapping subject matter with only one common party might reasonably cause the objective observer to conclude that there is a real possibility of bias. This will depend on the facts of the particular case and especially the custom and practice in the relevant field of arbitration.
- Unless the parties to an arbitration agree otherwise, an arbitrator is subject to a legal duty of disclosure under English law in relation to facts and circumstances which would or might reasonably give rise to justifiable doubts as to his or her impartiality.
- Disclosure is subject to an arbitrator’s privacy and confidentiality obligations. Where such obligations apply, the parties’ express or inferred consent is required for disclosure to be made. The ICC Rules, LCIA Rules and ICSID Rules all provide a basis for consent to be inferred.
- A failure by an arbitrator to make disclosure is a factor for the fair-minded and informed observer to take into account in assessing whether there is a real possibility of bias.
- The need for disclosure will be assessed with regard to the circumstances when the arbitrator acquired the requisite knowledge of the matters to be disclosed. It is not a retrospective exercise answered by reference to matters known to the fair-minded and informed observer only at a later date, though a continuing failure to disclose may be aggravated or mitigated by changing circumstances.
- The possibility of bias will be assessed as at the date of the hearing of the application to remove the arbitrator: the hypothetical assessment will be undertaken with reference to the facts then available to the fair-minded and informed observer.
