A challenge to the appointment of an arbitrator in a claim arising from the 2010 Deepwater Horizon disaster was thrown out by the UK Supreme Court today in a ruling that could clarify the law over the disclosure of facts giving rise to suspicions of bias.
In Halliburton Company v Chubb Bermuda Insurance Ltd, five justices unanimously dismissed an appeal by oil services company Halliburton against the choice of a court appointed arbitrator in a dispute over insurance liability. The case was part of a blizzard of claims arising from the explosion and subsequent oil leak in the Gulf of Mexico, in which 11 offshore workers died. Thousands of civil claims were brought against oil giant BP, Halliburton and drilling contractor Transocean; BP also claimed against Halliburton and Transocean.
Following a US judgment apportioning blame, Halliburton reached a settlement, part of which it sought to claim under its Bermuda form insurance policy. This went to arbitration when the insurer declined to pay. Both parties selected their own arbitrator, but were unable to agree on the chairman of the arbitration. A High Court application led to the selection of the insurer's first-choice candidate, Mr Rokison. In 2016, however, Halliburton learned that Rokison had accepted appointment as an arbitrator in two matters arising from the Deepwater Horizon disaster and applied for his removal.
In today's lead judgment, Lord Hodge said 'there appears to have been a lack of clarity in English case law as to whether there was a legal duty of disclosure and whether disclosure was needed'. He confirmed that arbitrators are under a legal obligation to disclose circumstances that might give rise to justifiable doubts as to their impartiality, but that did not apply in this case.
Emma Ager, partner at international firm Clyde & Co, which acted for Chubb, said that the judgment restates the position that the test under s24 of the Arbitration Act is the common law test of bias, which is inevitably fact specific. 'The court has preserved the integrity of English arbitration and the twin pillars of confidentiality and fairness with a thoughtful analysis of the issues that maintains the central importance of impartiality in English arbitrations, whilst remaining alive to the practical issues arising in particular circumstances and on particular facts.'
The judgment was eagerly awaited by arbitration specialists. Leigh Crestohl, partner and head of the international arbitration practice at City firm Zaiwalla & Co, commented: 'Whilst it remains true that the English court is reluctant to intervene in arbitration cases, the Supreme Court has sought to provide clarity on the English law position on impartiality in cases of multiple appointments in related arbitrations.'