Guidant LLC v Swiss Re International SE & Anor

In separate arbitrations, the desirability of consistent decisions does not override party choice, privacy and confidentiality. Where one arbitration involves a different party, that party may reasonably object to the appointment of an arbitrator already appointed in the related arbitration. Where two arbitrations involve the same parties, however, appointing the same third arbitrator may be positively desirable, particularly to reduce inconsistency. Under the Arbitration Act 1996, the court cannot impose consolidation, concurrent hearings or equivalent procedural arrangements without the parties’ consent.

Guidant sought the appointment of a common third arbitrator and chair in two arbitrations against Swiss Re. A common arbitrator, Mr Collins QC, had already been appointed in a related arbitration between Guidant and Markel concerning policies with substantially overlapping terms and issues. Swiss Re objected to his appointment and proposed alternative candidates. It also sought different chairs for the two arbitrations in which it was a party. The applications required the court to consider the interaction between consistency, confidentiality, party autonomy and the appointment power under the Arbitration Act 1996.

1. The applications to appoint Mr Collins QC as third arbitrator and chair in the two Swiss Re arbitrations were refused. His qualifications were not in issue. The objection arose because he was already appointed in the separate Markel arbitration, in which Swiss Re was not a party.

2. Although a common chair could reduce inconsistent decisions, costs and delay, arbitration differs from litigation. Party choice, privacy and confidentiality are important. Swiss Re would have no opportunity to address evidence or submissions in the Markel arbitration and might reasonably fear that views formed there would influence the Swiss Re arbitrations. The appointment of a common arbitrator did not itself establish apparent bias, but Swiss Re was reasonably entitled to object to the imposition of that particular arbitrator.

3. Section 35 of the Arbitration Act 1996 prevented the court from ordering consolidation or co-ordination, and prevented a tribunal from doing so without the parties’ consent. Swiss Re and Markel had withheld consent to consolidation and concurrent hearings.

4. The decision in Abu Dhabi Gas v Eastern Bechtel Corporation [1982] 2 Lloyds Rep 425 did not require a different result. Its approach contemplated procedural co-ordination that was unavailable under the 1996 Act and involved seeking the same arbitrator in both arbitrations, without attempting to impose a particular arbitrator already engaged in a third-party arbitration.

5. Different considerations applied to the two Swiss Re arbitrations because the parties were identical and were represented by the same lawyers. There was no legitimate objection to appointing the same person in both. Sir Richard Aikens was appointed as third arbitrator and chair in each arbitration, with liberty to apply concerning any difficulty with the appointment.