"I do not believe that any damage has been done but, if your clients remain concerned, I would be prepared to consider tendering my resignation from my appointment in the two Transocean cases if the results of the determination of the preliminary issues of construction, which are likely to be issued shortly, do not effectively bring them to an end."
"... arbitrators who decide cases cannot ignore the basic fairness of proceedings in which they participate. One side secured appointment of its chosen candidate to chair this case, over protest from the other side. Without any disclosure, the side that secured the appointment then named the same individual as its party-selected arbitrator in another dispute arising from the same events. The lack of disclosure, which causes special concern in the present fact pattern, cannot be squared with the parties' shared ex ante expectations about impartiality and even-handedness."
The other arbitrators, Mr Rokison and Mr Cole, responded to the separate observations, stating that they did not regard them as being part of the tribunal's award so as to render it a majority award. This was because those observations did not contain any opinion dissenting from any part of the award, which contained findings of fact, statements of applicable law, the process of reasoning and the final conclusions drawn from that reasoning.
"The informed and fair-minded observer would not therefore regard [Mr Rokison] as unable to act impartially in the reference between [Halliburton] and [Chubb] merely by virtue of the fact that he might be an arbitrator in other references arising out of the incident, and might hear different evidence or argument advanced in another such reference. The objective and fair-minded assessment would be that his experience and reputation for integrity would fully enable him to act in accordance with the usual practice of London arbitrators in fulfilling his duties under section 33 by approaching the evidence and argument in the [Halliburton] reference with an open mind; and in deciding the case, in conjunction with the other members of the tribunal, in accordance with such material, with which [Halliburton] will have a full and fair opportunity to engage."
"Under the common law, judges should disclose facts or circumstances which would or might provide the basis for a reasonable apprehension of lack of impartiality."
When a judge was aware of a matter which could arguably be said to give rise to a real possibility of bias and disclosed that matter, such disclosure enabled parties to consider the disclosure and decide whether there was no legitimate problem or to make submissions to the judge or to address the potential problem by waiver. The judge in turn could decide in the light of those submissions whether to withdraw from the case. The court stated that the test for apparent bias applied equally to arbitral tribunals and the practical advantages of early disclosure were just as important. The court held that the question whether there should be disclosure was to be decided prospectively, as it depended on the prevailing circumstances at that time when the disclosure should have been made. When deciding whether circumstances existed that would or might lead to the conclusion that there was a real possibility of bias, with the result that those circumstances needed to be disclosed, a court should not have regard to matters known only at a later stage.
"are founded on the following principles, and shall be construed accordingly - (a) the object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense; (b) the parties should be free to agree how their disputes are resolved, subject only to such safeguards as are necessary in the public interest; (c) in matters governed by this Part the court should not intervene except as provided by this Part."
The 1996 Act is not a complete code of the law of arbitration but allows the judges to develop the common law in areas which the Act does not address.
"(1) The tribunal shall -
(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and
(b) adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined.
(2) The tribunal shall comply with that general duty in conducting the arbitral proceedings, in its decisions on matters of procedure and evidence and in the exercise of all other powers conferred on it."
"A party to arbitral proceedings may (upon notice to the other parties, to the arbitrator concerned and to any other arbitrator) apply to the court to remove an arbitrator on any of the following grounds:
(a) that circumstances exist that give rise to justifiable doubts as to his impartiality;...
(d) that he has refused or failed -
(i) properly to conduct the proceedings,...
and that substantial injustice has been or will be caused to the applicant."
I will return to consider section 24(1)(a) later in this judgment but note at this stage (i) that by the use of the present tense of the verb "exist" the court is directed to the circumstances as they exist at the time at which it hears the application for removal of the arbitrator and (ii) that, in contrast with section 24(1)(d), the applicant does not have to show that substantial injustice has been or will be caused to it.
"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."
The courts have given further guidance on the nature of this judicial construct, the "fair-minded and informed observer" (to whom in this judgment I also refer as "the objective observer"). Thus, in Helow v Secretary of State for the Home Department  UKHL 62;  1 WLR 2416, Lord Hope (paras 1-3) explained that the epithet "fair-minded" means that the observer does not reach a judgment on any point before acquiring a full understanding of both sides of the argument. The conclusions which the observer reaches must be justified objectively and the "real possibility" test ensures the exercise of a detached judgment. He continued:
"Then there is the attribute that the observer is 'informed'. It makes the point that, before she takes a balanced approach to any information she is given, she will take the trouble to inform herself on all matters that are relevant. She is the sort of person who takes the trouble to read the text of an article as well as the headlines. She is able to put whatever she has read or seen into its overall social, political or geographic context. She is fair-minded, so she will appreciate that the context forms an important part of the material which she must consider before passing judgment." (Emphasis added)
I have added the emphasis in this citation because the context in which the test falls to be applied in this appeal is of particular importance.
"As a rule, persons enter into these contracts with the express view of keeping their quarrels from the public eyes, and of avoiding that discussion in public, which must be a painful one, and which might be an injury even to the successful party to the litigation, and most surely would be to the unsuccessful."
It is because arbitrations are private that arbitrators have no power to order concurrent hearings without the consent of the parties: Oxford Shipping Co Ltd v Nippon Yusen Kaisha: "The Eastern Saga"  2 Lloyd's Rep 373;  3 All ER 835. The 1996 Act says nothing about privacy or confidentiality. But that was a deliberate omission. In its report on the Arbitration Bill (February 1996), paras 10-17, the Departmental Advisory Committee on Arbitration Law ("the DAC") recorded that users of commercial arbitration in England "place much importance on privacy and confidentiality as essential features of English arbitrations" but, recognising that there was uncertainty as to the breadth and existence of certain exceptions to those principles, recommended that there be no statutory formulation of those principles but that the courts should be left to develop the law "on a pragmatic case-by-case basis." I will consider the principles of privacy and confidentiality further when I discuss the duty of disclosure in paras 70-116 below.
"Indeed, when I am representing a client in an arbitration, what I am really looking for in a party-nominated arbitrator is someone with the maximum predisposition towards my client, but with the minimum appearance of bias."
In arbitrations where the parties have, or one party has, an expectation that the party-nominated arbitrator will be pre-disposed towards it, it is perceived that the person chairing the tribunal, whether appointed by the party-nominated arbitrators jointly or by an appointing institution or the court, has a particular role in making sure that the tribunal acts fairly and impartially.
"[T]he duty to act independently and impartially involves arbitrators owing no allegiance to the party appointing them. Once appointed they are entirely independent of their appointing party and bound to conduct and decide the case fairly and impartially. They are not in any sense... a representative of the appointing party or in some way responsible for protecting or promoting that party's interests."
As Popplewell J went on to state, the duty on all arbitrators to act fairly and impartially is enshrined in section 33 of the 1996 Act. Lord Grabiner submits that London is the premier seat for international arbitration. He points to a survey of international arbitration which Queen Mary University of London carried out in 2018 which reveals that the main reasons why parties in international arbitration choose to arbitrate in England are the reputation of London and that the English legal system guarantees neutrality and impartiality. It is therefore important that English law upholds rules which support the integrity of international arbitration.
"If objection is then made, it will be the duty of the judge to consider the objection and exercise his judgment upon it. He would be as wrong to yield to a tenuous or frivolous objection as he would to ignore an objection of substance."
The court went on (para 22) to cite with approval dicta of Mason J in the High Court of Australia in In re JRL, Ex p CJL (1986) 161 CLR 342, 352:
"Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour."
An arbitrator when deciding to accept a reference is not under the same obligation as a judge to hear a case but, having taken up the reference, the arbitrator may reasonably feel under an obligation to carry out the remit unless there are substantial grounds for self-disqualification. Similarly, a court, when asked to remove an arbitrator, needs to be astute to see whether the ground of real possibility of bias is made out.
"[T]he best safeguard against a challenge after the event, when the decision is known to be adverse to the litigant, lies in the opportunity of making a disclosure before the hearing starts. That is the proper time for testing the tribunal's impartiality. Fairness requires that the quality of impartiality is there from the beginning, and a proper disclosure at the beginning is in itself a badge of impartiality."
That statement mutatis mutandis applies to the arbitrator as much as to the judge. In Davidson (above, para 19) Lord Bingham of Cornhill spoke with approval of the practice of judges to "disclose a previous activity or association which would or might provide a basis for a reasonable apprehension of lack of impartiality" (emphasis added). When, on being asked to accept an appointment, an arbitrator knows of a matter which ought to be disclosed to the parties to the reference, prompt disclosure to those parties of that matter provides the safeguard as the quality of impartiality is shown to have been there from the beginning. But the obligation of impartiality continues throughout the reference and the emergence during the currency of the reference of matters which ought to be disclosed means that an arbitrator's prompt disclosure of those matters can enable him or her to maintain what Lord Hope calls the "badge of impartiality".
"the present position under English law to be that disclosure should be given of facts and circumstances known to the arbitrator which, in the language of section 24 of the Act, would or might give rise to justifiable doubts as to his impartiality."
The court continued:
"Under English law this means 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." (Emphasis added)
"rest clearly on the philosophy of party autonomy in modern arbitration law, combined with the assumption that parties value English arbitration for its privacy and confidentiality. Party autonomy requires the court so far as possible to respect the parties' choice of arbitration. Their choice of private arbitration constitutes an election for an alternative system of dispute resolution to that provided by the public courts. The same philosophy limits court intervention to the minimum necessary in the public interest, which must include the public interest in ensuring not that arbitrators necessarily decide cases in a way which a court would regard as correct, but that they at least decide them in a fundamentally fair way: see section 1 of the 1996 Act."
In his illuminating judgment in Emmott v Michael Wilson & Partners Ltd  EWCA Civ 184;  Bus LR 1361 Lawrence Collins LJ (para 84) described the fundamental characteristics of privacy and confidentiality in an agreement to arbitrate under English law as being "really a rule of substantive law masquerading as an implied term". Arbitrators also must respect the private nature of the proceedings in which they are engaged: The Eastern Saga (para 57 above). They are bound to uphold the privacy and confidentiality of the arbitration, whether as a result of contract or in performance of an equitable duty because they have acquired the information in circumstances importing an obligation of confidence.
"In my judgment the content of the obligation may depend on the context in which it arises and on the nature of the information or documents at issue. The limits of that obligation are still in the process of development on a case-by-case basis.
On the authorities as they now stand, the principal cases in which disclosure will be permissible are these: the first is where there is consent, express or implied; second where there is an order or leave of the court (but that does not mean that the court has a general discretion to lift the obligation of confidentiality); third, where it is reasonably necessary for the protection of the legitimate interests of an arbitrating party; fourth, where the interests of justice require disclosure, and also (perhaps) where the public interest requires disclosure."
As I have stated (para 57 above), the DAC did not support legislative definition but left the task of developing the rules relating to the privacy and confidentiality of arbitrations, including the boundaries of and exceptions to those obligations, to the judiciary. Parliament enacted the 1996 Act against that background. In this appeal the court is not concerned with identifying an exception to the duty of privacy and confidentiality but seeks to discover the extent to which the parties have implicitly consented to disclosure.
"... I have acted as party-appointed arbitrator and chairman in many 'Bermuda Form' arbitrations, a number of which, not surprisingly, have involved [Chubb], who have appointed me as their nominated arbitrator on various occasions. I have also previously acted as chairman in two other arbitrations, in which [Chubb] was a party.
Currently I have only three pending cases involving [Chubb]. In one, I am their appointee; in the second, I have been appointed as sole arbitrator by agreement between the parties; and, in the third, I have been appointed as third arbitrator by order of the London Commercial Court. The last of these also happens to involve what I understand is a different aspect of the Deepwater Horizon incident.
I do not consider that the above matters affect my independence or impartiality, which I have always been at pains to maintain, but I nonetheless consider that these are matters which ought to be disclosed at this stage, rather than risking possible disruption of the arbitral proceedings after they have got under way."
"We are there to give effect to their transactions, not to frustrate them: we are there to oil the wheels of commerce, not to put a spanner in the works, or even grit in the oil."
There is a public interest in upholding the integrity of arbitration as a system of alternative dispute resolution by ensuring that there is proper disclosure of an arbitrator's involvement in related arbitrations in a field of arbitration in which repeated appointments occur but in which there is no common understanding that disclosure is not required. There is also a strong public interest in giving greater certainty as to the legal standing of established arbitral practice and the relationship between the duty of disclosure and an arbitrator's duty to respect the privacy and confidentiality of an arbitration.
"[T]o take two opposite extremes, disclosure could not avoid an objection to a judge who in the light of the matter disclosed clearly ought not to hear the case; and non-disclosure could not be relevant, if a fair-minded and informed observer would not have thought that there was anything even to consider disclosing."
An obligation to disclose a matter which "might" give rise to justifiable doubts arises only where the matter might reasonably give rise to such doubts.
"any circumstances known to the individual (or which become known to the individual before the arbitration ends) which might reasonably be considered relevant when considering whether the individual is impartial and independent."
Professor Davidson in the second edition of his book (in 2012) (paras 7.29-7.30) observes that this is an objective test and suggests that the factors listed in the Red and Orange Lists of the IBA Guidelines will usually provide useful guidance.
"When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties..." (Emphasis added)
The word "likely" in the UNCITRAL Model Law must be interpreted in the context of the Model Law itself, which appears to suggest that the obligation to disclose arises if the circumstances could reasonably give rise to justifiable doubts. This is because the wording of article 12(1) is in contrast with article 12(2) which provides that an arbitrator may be challenged "if circumstances exist that give rise to justifiable doubts" (emphasis added).
Is disclosure relevant to apparent bias? Mr Michael Crane QC on behalf of Chubb correctly makes the point that the inequality of knowledge, which Halliburton lists as one of the principal concerns arising from multiple references concerning overlapping subject matter with only one common party, raises a question of the fairness of the arbitral proceedings, which can be dealt with under section 24(1)(d)(i) of the 1996 Act if there is proof of substantial injustice. That is so; but a failure of that arbitrator to disclose the other references could give rise to justifiable doubts as to his or her impartiality. I agree with the dicta of Cockerill J in PAO Tatneft v Ukraine  EWHC 3740 (Ch), para 57 that:
"the obligation of disclosure extends... to matters which may not ultimately prove to be sufficient to establish justifiable doubts as to the arbitrator's impartiality. However, a failure of disclosure may then be a factor in the latter exercise."
"The court considers on all the material which is placed before it whether there is any real danger of unconscious bias on the part of the decision maker. This is the case irrespective of whether it is a judge or an arbitrator who is the subject of the allegation of bias." (Emphasis added)
Lord Woolf's formulation of the test pre-dated the refinement of Lord Goff's formulation by Lord Hope in Porter v Magill but that refinement is not material to the point for which I cite this passage. In R (Condron) v National Assembly for Wales  EWCA Civ 1573;  LGR 87 the Court of Appeal (Ward, Wall and Richards LJJ) addressed a challenge to a decision to allow a planning application taken by the Planning Decision Committee of the Assembly on the basis of apparent bias arising from a remark made by a member of the committee to an objector on the day before the decision. After the decision, the objectors to the application complained to the Commissioner for Standards who produced a report several months later which stated that he found no evidence of bias in the members' consideration of the application. The judge disregarded evidence of the Commissioner's assessment of what had occurred at the meeting of the committee, because it would not have been available to the objectors or the hypothetical observer at the time of the decision. Richards LJ, with whom the other Lord Justices agreed, disagreed with the judge's approach and stated (para 50):
"The court must look at all the circumstances as they appear from the material before it, not just at the facts known to the objectors or available to the hypothetical observer at the time of the decision."
At para 63 of AT & T Corpn Potter LJ in his concurring judgment described the court's task as embodying the standards of the informed observer viewing the matter at the relevant time, "which is of course the time when the matter comes before the court".
"It may be the practice in certain types of arbitration, such as maritime, sports or commodities arbitration, to draw arbitrators from a smaller or specialised pool of individuals. If in such fields it is the custom and practice for parties to frequently appoint the same arbitrator in different cases, no disclosure of this fact is required, where all parties in the arbitration should be familiar with such custom and practice."
Para 3.1.5 of that Part also lists as a circumstance which might require disclosure:
"The arbitrator currently serves, or has served within the past three years, as arbitrator in another arbitration on a related issue involving one of the parties, or an affiliate of one of the parties."
"The LMAA believes that users of ad hoc maritime arbitration particularly value confidentiality. Any new general rule of English law requiring disclosure of confidential information against parties' wishes runs a serious risk of undermining the attractiveness of London as the preeminent seat for maritime arbitration." (para 22)
"... whether there is in fact a real possibility of bias depends on matters such as the identity of the parties to the two arbitrations, the nature of the subject-matter, the degree of overlap between the issues and the type of evidence adduced. The problem is that none of this can be explored without disclosing in the first arbitration matters relating to the second arbitration which in principle should be confidential to that arbitration. Indeed, it is impossible to see how the confidentiality of the second arbitration would not be compromised by the need to investigate whether there is an overlap between the two references in relation to subject-matter, issues etc." (p 12)
Déjà enregistré ?