English Court Of Appeal Considers Disclosure Of Arbitral Appointments In Related Or Overlapping References

In Halliburton Company v Chubb Bermuda Insurance Ltd [2018] EWCA Civ 817, the English Court of Appeal was asked to consider:

whether it is possible for an arbitrator to accept multiple appointments with overlapping reference and one common party, without giving rise to doubts over impartiality? at what point should an arbitrator disclose these further appointments - if at all? The Court of Appeal dismissed the appeal, stating that, on the facts of the case, there was no real possibility that the arbitrator was biased when viewed from the perspective of a "fair minded and informed observer". Nevertheless, the Court held that, in accordance with English law and best practice in international arbitration, disclosure should have been made.

Background

On 20 April 2010, there was an explosion at the Deepwater Horizon oil rig, which was owned by Transocean Holdings LLC. BP Exploration and Production Inc. (BP) was the lessee of the rig and Halliburton Company (Halliburton) provided cementing and other services for BP. Prior to the explosion, both Transocean and Halliburton had purchased excess liability insurance from Chubb Bermuda Insurance.

Halliburton failed in its attempt to claim under the insurance policy, and as a result, decided to commence arbitration against Chubb. The two parties could not agree on the choice for the third arbitrator, so the High Court appointed 'M' (Reference 1).

Prior to his appointment in June 2015, M disclosed that (i) he had previously acted as arbitrator in cases where Chubb was a party and (ii) he was currently appointed as arbitrator in two references, both of which involved Chubb.

In December 2015, M accepted an appointment by Chubb in a case involving Transocean (Reference 2). In August 2016, M accepted an appointment as substitute arbitrator in another case with Transocean, this time against a different insurance company (Reference 3). Neither Reference 2 nor Reference 3 was disclosed to Halliburton.

Halliburton applied to the court to have M removed as the arbitrator in Reference 1, under section 24(1)(a) of the Arbitration Act 1996, which provides that an arbitrator can be removed when "circumstances exist that give rise to justifiable doubts as to his impartiality".

The application was dismissed on the basis that there was nothing in the acceptance of References 2 and 3 that gave rise to an appearance of bias or impartiality. M maintained that he remained independent and impartial in all the cases. M...

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