Halliburton Company v Chubb Bermuda Insurance Ltd & Ors

Under the Arbitration Act 1996, an arbitrator’s acceptance of appointments in related arbitrations sharing one party does not, without more, establish apparent bias. Substantial overlap may create legitimate concerns.

Known circumstances which would or might lead the fair-minded and informed observer to conclude that there is a real possibility of bias should be disclosed. Disclosure is judged prospectively and is good practice in international arbitration. Non-disclosure is relevant on a later removal application, but does not itself establish apparent bias. Accidental non-disclosure, limited overlap and the absence of substantive overlap meant that removal was not justified.

Following the Deepwater Horizon incident, Halliburton claimed under its liability policy and commenced London arbitration against Chubb. M was appointed as chair by the High Court after the parties could not agree on the third arbitrator.

M later accepted appointments in two related arbitrations involving Chubb and Transocean without notifying Halliburton. Halliburton applied under section 24(1)(a) of the Arbitration Act 1996 for M’s removal. Popplewell J dismissed the application: [2017] EWHC 137 (Comm). The appeal concerned multiple appointments, disclosure duties and the significance of non-disclosure.

Appeal dismissed. The court delivered a joint judgment.

1. The Arbitration Act 1996 requires arbitration to be conducted by an impartial tribunal and arbitrators to act fairly and impartially. The section 24 apparent-bias test is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility of bias.
2. The mere acceptance of appointments in related arbitrations involving one common party does not establish apparent bias. An arbitrator is trusted to decide each reference on the evidence and other material available in that reference. Following AMEC Capital Projects Ltd v Whitefriars City Estates Ltd [2005] 1 WLR 723, something of substance is required. Such appointments may nevertheless create legitimate concerns, particularly where there is substantial overlap and one party cannot know the submissions or evidence in the other arbitration.
3. Disclosure is required prospectively of facts and circumstances known to the arbitrator which would or might lead the fair-minded and informed observer to conclude that there was a real possibility of bias. There is no duty of inquiry. In international commercial arbitration, disclosure of related appointments is good practice, and may be required as a matter of law. Confidentiality is not absolute and may permit such disclosure.
4. On an application after non-disclosure, the court must first decide whether disclosure ought to have been made and then assess the significance of the omission using all information available at the hearing. Non-disclosure colours the observer’s assessment, and an inappropriate response may reinforce concerns, but non-disclosure alone does not establish apparent bias.
5. Disclosure ought to have been made when M accepted the Transocean appointments. However, the omission was accidental, the overlap was limited, M was highly experienced, Halliburton raised its concerns before substantive consideration, and the related references ended on preliminary issues without substantive overlap. The fair-minded and informed observer would not conclude that there was a real possibility of bias. M was therefore not removed.

• Court of Appeal (Civil Division): dismissed the appeal.
• High Court of Justice, Queen’s Bench Division, Commercial Court: Popplewell J dismissed Halliburton’s application for M’s removal under section 24(1)(a) of the Arbitration Act 1996: [2017] EWHC 137 (Comm).