On 27 November 2020, the Supreme Court handed down its decision in Halliburton Company v Chubb Bermuda Insurance Ltd (formerly known as Ace Bermuda Insurance Ltd) [2020] UKSC 48, concerning whether and to what extent an arbitrator may accept multiple appointments in related matters without making disclosure to the party who is not the common party. Freshfields represented the London Court of International Arbitration (LCIA) in its intervention in the appeal.
The Supreme Court concluded that unless the parties to an arbitration otherwise agree, arbitrators have a legal duty to disclose facts and circumstances which would or might reasonably give rise to the appearance of bias. An arbitrator may be required to disclose the fact that they have accepted multiple appointments concerning the same or overlapping subject matter with only one common party, depending on the particular customs and practice in the relevant field.
Where the parties to an arbitration submit to the institutional rules of the ICC and LCIA, it is likely that the arbitrator will have a legal duty to disclose appointments in multiple references concerning the same or overlapping subject matter with only one common party.
For instance, in the ICC’s “Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration”, the ICC urges arbitrators to consider all relevant circumstances which call into question their perceived independence including whether they are acting or have acted as an arbitrator in a related case or a case involving one of the parties (paragraph 23).
The IBA Guidelines are arguably more prescriptive than the current ICC guidance in relation to related cases: an arbitrator has a duty to disclose a current or recent prior involvement in a related “issue” involving one of the parties, as it falls under the IBA’s ‘Orange List’.
The Supreme Court suggested that for some industry arbitrations, such as maritime, sports and commodities (and maybe others), multiple appointments are a part of the process known to and accepted by the parties to arbitration. In these circumstances, no duty of disclosure would arise.
So, what does this mean for global project arbitrations? What happens where an arbitrator is involved in more than one dispute in relation to the same project?
The exception foreseen by the Supreme Court in respect of commodities, maritime and sports arbitration is justified because of the presumed knowledge of the parties that the pool of arbitrators in these types of disputes is very small. The same could hardly be said for global projects arbitration in most major jurisdictions where there is a large pool of experienced arbitrators. However, it is conceivable (and consistent with the Supreme Court’s findings) that the exception might apply in other contexts and, potentially, to global projects arbitrations where the nature of the dispute narrows the pool of arbitrators significantly.
A review of the latest ICC 2019 dispute resolution statistics provides an insight into this point. For instance:
- The UK had 78 parties involved in ICC arbitrations in 2019, and 258 arbitrators selected from the UK; but in contrast.
- India had 147 parties involved, compared to 34 arbitrators selected.
Whilst obviously a small sample size, these two data points suggest that the pool of arbitrators relative to the number of parties/cases involving India is small (noting that a dispute governed by Indian law does not necessarily mean an Indian arbitrator must be selected). Consequently, it is more likely that the 34 Indian arbitrators might be appointed in related matters, for instance a global project arbitration involving multiple related proceedings under different contracts with Indian law applicable.
It is therefore possible that cultural norms regarding disclosure obligations could be influenced by the size of the pool of arbitrators in the relevant jurisdiction. Parties from jurisdictions where there is a smaller pool of arbitrators (for instance in India) may therefore have different expectations and could be less likely to consider that prior involvement in a related case undermines the arbitrator’s independence. Given the ICC’s requirement for the arbitrators to “consider”, but no express requirement to disclose, such circumstances, arbitrators might not consider any disclosure necessary based on prevailing practice in the jurisdiction where they are based.
The Supreme Court recognises as much in making the comparison with commodities, maritime and sports arbitration. There is no compelling reason that the same logic could not be argued to apply beyond these specialisms to global projects disputes jurisdictions where the pool of arbitrators is small.
