Arbitrators can be appointed in overlapping arbitrations but they must be mindful of their duties to disclose
Daniella smith
Haliburton Company v Chubb Bermuda Insurance Ltd and Others [2018] EWCA Civ 817
In the words of the Court of Appeal in this recent decision "arbitrators are assumed to be trustworthy and to understand that they should approach every case with an open mind." But what happens when an arbitrator accepts appointments in overlapping references with only one party in common? Should he/she disclose this? Who to? And what should happen if they do not?
These were the issues at the heart of the recent Court of Appeal (CA) decision in Halliburton Company v Chubb Bermuda Insurance Ltd and others. The CA held unanimously that while as a matter of good practice and, in the circumstances of this case as a matter of law, the arbitrator (M) ought to have disclosed his appointments in overlapping references, "the fair minded and informed observer having considered the facts" would not conclude there was a real possibility that M was actually biased. This case is significant as it provides guidance on disclosure by an arbitrator as a duty separate from impartiality. It also serves as a reminder that arbitrators should be aware of any potential duties of disclosure when accepting appointments. Factual Background Following the BP Oil Spill in the Gulf of Mexico on 20 April 2010, numerous claims were made by both the US Government and corporate and individual claimants against BP (the lessee of the drilling rig), Transocean (the owner of the drilling rig), and Halliburton (who had been engaged to provide cementing and well-monitoring services in relation to the temporary abandonment of the well). The private claims for damages were managed through a Plaintiff Steering Committee (PSC). Following a judgment on liability from the Federal Court for the Eastern District of Louisiana both Halliburton and Transocean settled with the PSC and claimed on the liability insurance policies they had both purchased previously from Chubb on the Bermuda form (the polices were separate but the policy terms were materially the same). However Chubb refused to pay Halliburton's claim contending, amongst other things, that the settlement was unreasonable. Arbitration Proceedings against Chubb In accordance with the terms of the insurance policy, Halliburton commenced arbitration proceedings against Chubb. The policy provided for a London seated arbitration and a tribunal consisting of three arbitrators, one appointed by each party and the third by the two arbitrators so chosen. In the event of disagreement between the arbitrators as to the choice of the third, the appointment was to be made by the High Court. Halliburton appointed N as its arbitrator. Chubb appointed P and in the absence of