U.K. Supreme Court Confirms That Arbitrators Are Under A Legal Duty To Disclose Matters Which Would Or Might Create An Appearance Of Bias

• Published date: 03 December 2020
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Akin Gump Strauss Hauer & Feld LLP
• Author: Mr Justin Williams, Rekha Rogers and Josephine Kaiding

In a landmark decision handed down on November 27, 2020, the U.K. Supreme Court has confirmed that the English law of arbitration imposes a duty on arbitrators to disclose matters which would or might lead to the conclusion that there is a real possibility that they are biased. This welcome development in English law reinforces the integrity and reputation of English-seated arbitration, and is consistent with best practice seen in the International Bar Association (IBA) Guidelines on Conflict of Interest and leading institutional rules.

Factual Background

The underlying arbitration between Halliburton and Chubb that gave rise to the issue of arbitrator disclosure concerned a coverage dispute relating to the explosion and fire on the Deepwater Horizon drilling rig in the Gulf of Mexico in 2010. The relevant insurance policies were governed by New York Law, but provided for arbitration in London. Following the commencement of the arbitration in 2015, both Halliburton and Chubb each selected one arbitrator but were unable to agree on the appointment of the third, who would sit as chairman. After a contested hearing in the English Commercial Court, Mr. Kenneth Rokison QC, who had been proposed to the Court by Chubb, was appointed. Subsequently, and without Halliburton's knowledge, Mr. Rokison accepted arbitral appointments in two separate references also arising from the Deepwater Horizon explosion, one of which was made by Chubb.

On discovering Mr. Rokison's appointment in the later references, Halliburton applied to the Court under section 24(1)(a) of the English Arbitration Act 1996 (the "Act") to remove him as an arbitrator on the basis that there were "justifiable doubts as to his impartiality". The two grounds for the application were that (a) he had been appointed as an arbitrator in two other disputes also arising out of the Deepwater Horizon explosion (one of which involved Chubb, but not Halliburton, as a party); and (b) he had not disclosed the fact of those overlapping appointments. That application was refused.

On appeal, the Court of Appeal found that whilst the Act is silent as to an arbitrator's duty of disclosure, nevertheless English law imposes a duty to disclose circumstances that would or might lead a fair-minded and informed observer, having considered the facts, to conclude that there was a real possibility of bias. In determining whether apparent bias exists, it is relevant to consider an arbitrator's failure to disclose and how he or...