The UK Supreme Court hands down its landmark judgment in Halliburton v Chubb, in which Freshfields represented the LCIA as interveners

Freshfields partner Nigel Rawding QC and senior associate Olivia Valner, together with Charles Kimmins QC and Luke Pearce of Twenty Essex, represented the LCIA in its intervention in the Supreme Court appeal in Halliburton v Chubb [2020] UKSC 48. The case related to apparent bias and standards of disclosure in international arbitration.

The Supreme Court handed down its judgment today, 27 November 2020. The court dismissed Halliburton’s appeal, concluding that the arbitrator in question had breached his legal duty of disclosure by failing to disclose a subsequent arbitral appointment in an overlapping reference involving one common party, but that the fair-minded and informed observer, looking at the facts and circumstances at the date of the hearing to remove the arbitrator in question would not conclude that there was a real possibility of bias or that circumstances existed that gave rise to justifiable doubts about the arbitrator’s impartiality.

Consistent with the submissions presented on behalf of the LCIA, the Supreme Court confirmed that:

• When addressing an allegation of apparent bias in an English-seated arbitration, the English Court will: (i) apply the objective test of the “fair-minded and informed observer” and (ii) have regard to the particular characteristics of international arbitration.
• In considering the factual matrix, the objective observer will take account of the fact that in certain subject matter fields of arbitration there are different expectations as to the degree of independence of an arbitrator and as to the benefits to be gained by having an arbitrator who is involved in multiple related arbitrations.
• There is a legal duty of disclosure in English law which is encompassed within the statutory duties of an arbitrator under section 33 of the Arbitration Act 1996, and which imposes an objective test. Unless the parties to the arbitration otherwise agree, arbitrators have a legal duty to make disclosure of facts and circumstances which would or might reasonably give rise to the appearance of bias.
• Where an arbitrator accepts appointments in multiple references concerning the same or overlapping subject matter with only one common party, this may, depending on the relevant custom and practice, give rise to an appearance of bias. The failure to disclose may demonstrate a lack of regard to the interests of the non-common party and may in certain circumstances amount to apparent bias.
• The fact that an arbitrator has accepted appointments in multiple references concerning the same or overlapping subject matter with only one common party is a matter which may have to be disclosed, depending upon the customs and practice in the relevant field. In cases in which disclosure is called for, the acceptance of those appointments and a failure by the arbitrator to disclose the appointments taken in combination might well give rise to the appearance of bias.

The Court also provided some welcome clarification as to the intersection between the duties of disclosure, privacy and confidentiality, and specifically whether and to what extent an arbitrator may disclose the existence of a related arbitration without obtaining the express consent of the parties to that arbitration. The Supreme Court observed that the answer to this will depend in part on the customs and practices of arbitration in the particular field in question (with those customs potentially varying between, for example, arbitrations under the LCIA and ICC rules on the one hand, and GAFTA and LMAA arbitrations on the other hand).

Freshfields will be hosting a webinar on 10 December 2020 at 2:00pm discussing the judgment and what it means for parties, counsel, arbitrators and arbitration institutions, featuring a panel of speakers comprising:

• The Rt Hon Sir Peter Gross – retired Court of Appeal Lord Justice and Arbitrator at Twenty Essex
• Jacomijn van Haersolte-van Hof – Director General, LCIA
• Charles Kimmins QC – Twenty Essex
• Luke Pearce – Twenty Essex
• Nigel Rawding QC – Partner, Freshfields 
• Olivia Valner – Senior Associate, Freshfields 

All are most welcome to attend. The invitation, with details of how to join can be found here.