Halliburton Company v Chubb Bermuda Insurance Ltd (formerly known as Ace Bermuda Insurance Ltd)

The Supreme Court held that arbitrators in English-seated arbitrations owe an objective, statutory duty of impartiality under section 33 of the Arbitration Act 1996 and that this duty includes a legal obligation to disclose facts and circumstances which would or might reasonably give rise to justifiable doubts as to impartiality. The court explained the correct test for apparent bias (the fair-minded and informed observer) and stressed that the assessment is objective and takes account of the particular features and customs of international arbitration.

Where related arbitrations arise out of the same event and a common party proposes or makes multiple appointments, an arbitrator (absent contrary agreement) must disclose at least limited, high-level information (identity of the common party, whether the appointment is party-appointed or by nomination, and that the dispute arises from the same incident) if the circumstances might reasonably give rise to a real possibility of bias. The duty of disclosure coexists with, and is constrained by, the arbitrator’s duty of confidentiality: limited disclosures of the type described can normally be made without express consent because consent may be inferred from the customs and practice in the relevant field (for example Bermuda Form arbitrations) but more detailed disclosure requires express consent.

Applying those principles, the court dismissed Halliburton’s appeal: although Mr Rokison ought to have disclosed his later appointments in related Transocean arbitrations, the fair-minded and informed observer, assessing the position at the hearing to remove him, would not have concluded there was a real possibility of bias and removal was therefore not justified.

This appeal concerned a challenge under section 24(1)(a) of the Arbitration Act 1996 to the continued appointment of the arbitrator Mr Kenneth Rokison QC as chairman of a Bermuda Form arbitration between Halliburton and Chubb arising from the Deepwater Horizon incident. Halliburton alleged apparent (including unconscious) bias because Mr Rokison had, after his appointment as chairman in the Halliburton/Chubb reference (reference 1), accepted party appointments from Chubb in two related Transocean references (references 2 and 3) without informing Halliburton.

Procedure and parties

• At first instance Popplewell J dismissed Halliburton’s removal application ([2017] EWHC 137 (Comm)).
• The Court of Appeal dismissed Halliburton’s appeal ([2018] EWCA Civ 817) but held that Mr Rokison should have disclosed the later appointments as a matter of good practice.
• The Supreme Court granted permission and heard extensive submissions, including from interveners (ICC, LCIA, CIArb, LMAA, GAFTA and others).

Issues framed

1. Whether and to what extent an arbitrator may accept appointments in multiple references concerning the same or overlapping subject matter with only one common party without creating an appearance of bias.
2. Whether and to what extent such multiple appointments must be disclosed to the non-common party, and the interaction of that duty with the arbitrator’s duty of confidentiality.

Court’s reasoning

• The court reiterated the objective test for apparent bias: whether the fair-minded and informed observer, having considered the facts available at the relevant time, would conclude there was a real possibility of bias.
• It emphasised characteristics of arbitration relevant to disclosure and bias: privacy/confidentiality, limited public oversight, repeat players, specialist arbitrator pools, and remuneration structures that make repeat appointments commercially important.
• The court held that the arbitrator’s statutory duties under section 33 (act fairly and impartially) imply a legal duty to disclose matters that might reasonably give rise to justifiable doubts about impartiality. This legal duty supports transparency and party autonomy and is consistent with institutional rules and international norms.
• The duty of disclosure is limited by confidentiality. However, in many commercial arbitral contexts (including Bermuda Form arbitrations) customary practice permits limited, high-level disclosure of the existence of related arbitrations and the identity of a common party without express consent; consent may be inferred from that practice and from the common party’s act of seeking to appoint the arbitrator. More detailed disclosure would require express consent of the relevant parties.
• Whether multiple appointments amount to apparent bias depends on the facts and the customs of the relevant field; the mere fact of multiple appointments does not automatically disqualify an arbitrator, but combined with non-disclosure it can weigh heavily.

Result

The Supreme Court concluded that, although Mr Rokison should have disclosed his later appointments in references 2 and 3 to Halliburton, the fair-minded and informed observer at the hearing to remove him would not have concluded there was a real possibility of bias. The appeal was dismissed.

This was an appeal against the dismissal of an application to remove an arbitrator. The Supreme Court dismissed the appeal. The court held that arbitrators owe an objective duty of impartiality under section 33 of the Arbitration Act 1996 which includes a legal duty to disclose facts or circumstances that would or might reasonably give rise to justifiable doubts about impartiality; limited disclosure of related appointments in Bermuda Form arbitrations can normally be made without express consent, but detailed disclosure may require consent. Applying the test to the facts, the non-disclosure did not produce a real possibility of bias at the removal hearing, so removal was not justified.

First instance: Popplewell J dismissed the removal application ([2017] EWHC 137 (Comm)). Court of Appeal dismissed Halliburton’s appeal ([2018] EWCA Civ 817). Appeal to the Supreme Court ([2020] UKSC 48) dismissed on 27 November 2020.