CL-2024-000510 - [2025] EWHC 1523 (Comm)

The leading case concerning an arbitrator’s duty of impartiality, albeit in the context of section 24 of the Act, is the Supreme Court’s decision in Halliburton Co v Chubb Bermuda Insurance Ltd [2021] AC 1083. In that case pursuant to an arbitration clause in a Bermuda Form liability policy the claimant commenced an arbitration against the first defendant. In accordance with the terms of the arbitration clause, the claimant and the first defendant each appointed an arbitrator and, in the absence of agreement between the parties, the second defendant, Mr. Rokison KC, was appointed as third arbitrator and chairman by the High Court exercising its powers under section 18 of the Act. Subsequent to that appointment, Mr. Rokison accepted appointments as an arbitrator in two related arbitrations, in one of which he was the first defendant’s appointee. Those appointments were not disclosed to the claimant. The claimant brought a claim seeking an order under section 24(1)(a) of the Act that Mr. Rokison be removed as an arbitrator on the ground that circumstances existed that gave rise to justifiable doubts as to his impartiality, in particular his acceptance of the later appointments, his failure to notify the claimant of those appointments or give it the opportunity to object to them, and the first defendant’s refusal to permit him to resign from the first appointment.

At [52] Lord Hodge set out the relevant test for apparent bias, as stated by Lord Hope in Porter v Magill [2002] 2 AC 357 at [103] as follows: “The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” This requires objectivity and detachment.

The fair-minded observer is neither complacent nor unduly sensitive or suspicious and the conclusions which they reach must be justified objectively [52]-[53].

However, context forms an important part of the material which the fair-minded observer must consider before passing judgment [52]. Thus, Lord Hodge observed at [91]:

“As GAFTA and LMAA have shown, it is an accepted feature of their arbitrations that arbitrators will act in multiple arbitrations, often arising out of the same events. Parties which refer their disputes to their arbitrations are taken to accede to this practice and to accept that such involvement by their arbitrators does not call into question their fairness or impartiality. In the absence of a requirement of disclosure of such multiple arbitrations, the question of the relationship between such disclosure and the duty of privacy and confidentiality does not arise.”

It follows that, as Lord Hodge stated at [127]-[128]:

“The objective observer will appreciate that there are differences between, on the one hand, arbitrations, in which there is an established expectation that a person before accepting an offer of appointment in a reference will disclose earlier relevant appointments to the parties and is expected similarly to disclose subsequent appointments occurring in the course of a reference, and, on the other hand, arbitrations in which, as a result of relevant custom and practice in an industry, those expectations would not normally arise. The objective observer will consider whether in the circumstances of the arbitration in question it would be reasonable to expect the arbitrator not to have the knowledge or connection with the common party which the multiple references would give him or her…

Mr. Constantine Partasides QC, who appears on behalf of ICC, represents to the court that such interrelated arbitrations are not common in ICC arbitrations and therefore such circumstances may more readily give rise to an appearance of bias. GAFTA and LMAA explain that multiple appointments are common in their fields of operation, see paras 43 and 44 above.”

At [44] Lord Hodge had stated as follows:

“LMAA similarly explains that multiple appointments are relatively common under their procedures because they frequently arise out of the same incident. Speed and simplicity are necessary because of the tight limitation periods in maritime claims. There is a relatively small pool of specialist arbitrators whom parties use repeatedly. LMAA terms give arbitral tribunals the power to order concurrent hearings where two or more arbitrations raise common issues of fact or law without requiring the consent of the parties. Disclosure of multiple appointments should be required only when it is arguable that the matters to be disclosed give rise to the appearance of bias. LMAA points out that the IBA Guidelines recognise that in certain types of arbitration no disclosure of multiple appointments is required if parties are familiar with such custom and practice…”

It follows that, as Lord Hodge stated at [130], the custom and practice in the relevant field (in this case the LMAA) should be “examined closely”, as the assessment of the fair-minded and informed observer of whether there is a real possibility of bias is an objective assessment which has regard to the customs and practices of the relevant field of arbitration [152].

A failure by an arbitrator to make disclosure is a factor for the fair-minded and informed observer to take into account in assessing whether there is real possibility of bias [155].

The professional reputation and experience of an individual arbitrator is a relevant consideration for the objective observer when assessing whether there is apparent bias as an established reputation for integrity and wide experience in arbitration may make any doubts harder to justify. But the weight which the fair-minded and informed observer should give to that consideration will depend upon the circumstances of the arbitration and whether, objectively and as a generality, one could expect people who enter into references of that nature to be informed about the experience and past performance of arbitrators [67].

The objective observer is also alive to the possibility of opportunistic or tactical challenges. Parties engage in arbitration to win. Their legal advisers present their cases to the best of their ability, and this pursuit can include making tactical objections or challenges in the hope of having their dispute determined by a tribunal which might, without any question of bias, be more predisposed towards their view or simply to delay an arbitral determination [68].

An arbitrator is under the statutory duties in section 33 of the Act to act fairly and impartially in conducting arbitral proceedings. Those statutory duties give rise to an implied term in the contract between the arbitrator and the parties that the arbitrator will so act. The arbitrator is accordingly under a legal duty to disclose facts or circumstances which would or might lead the fair minded and informed observer, having considered the facts, to conclude that there was a real possibility that the arbitrator was biased [74]-[81].

However, if, because of the custom and practice of specialist arbitrators in specific fields, such as LMAA arbitrations, multiple appointments are a part of the process which is known to and accepted by the participants, then no duty of disclosure would arise [135]. Thus, Lord Hodge went on to state at [137]:

“Unlike in GAFTA and LMAA arbitrations, it has not been shown that there is an established custom or practice in Bermuda Form arbitrations by which parties have accepted that an arbitrator may take on such multiple appointments without disclosure.”

The failure of an arbitrator to make disclosure in a case where they have accepted an appointment in multiple references in circumstances which might reasonably give rise to justifiable doubts as to their impartiality, is a factor for the fair-minded and informed observer to take into account in assessing whether there is a real possibility of bias. There may, however, still be factors pointing the other way.

In Halliburton in the case of Mr. Rokison, by the time of the hearing for his removal (Footnote: ⁹), he had given an explanation of his failure to disclose his appointments in references 2 and 3. His explanation of oversight was genuine; there was a lack of clarity in English case law as to whether there was a legal duty of disclosure and whether disclosure was needed; he provided a measured response to the robust challenge; he did not receive any secret financial benefit; and there was no basis for inferring any subconscious ill-will in response to the robustness of the challenge, as Mr. Rokison responded in a courteous, temperate and fair way. These factors meant that the fair-minded and informed observer would not conclude that there was a real possibility of bias at the date of the application for Mr. Rokison’s removal.