Arbitrator’s Duty of Impartiality: Almazeedi And Halliburton

Section 33 of the English Arbitration Act 1996 imposes a duty on arbitrators to act impartially and, by virtue of s.24(a), empowers a court to remove an arbitrator if “circumstances exist which give rise to justifiable doubts as to his impartiality” and by virtue of s.68(2)(a), to set aside an award where the tribunal failed to comply with the duty to act impartially.

In an article titled “Cassandra of the Caymans – Testing the limits of an arbitrator’s duty of impartiality”, Haynes and Boone LLP cover the following:

  • The inclusion of a requirement for “independence” in the Model Law and various arbitral rules and the absence of such requirement in the English Arbitration Act;
  • The IBA Guidelines on Conflicts of Interest in International Arbitration and the status of the Guidelines in English law;
  • The Privy Council’s judgment in Almazeedi, concerning a challenge to the independence of a retired English judge sitting in the Cayman Islands, where the majority of the Privy Council noted the following comments in Millar v. Procurator Fiscal (Scotland) [2001] UKPC D4 (24 July 2001):

“[T]he question of impartiality, actual or perceived, has to be judged from the very moment when the judge or tribunal becomes first seized of the case. It is a question which, at least in a case of perceived impartiality, stands apart from any questions that may be raised about the character, quality or effect of any decisions which he takes or acts which he performs in the proceedings”

  • The Court of Appeal’s judgment in Halliburton (which is arguably at odds with Item 3.1.5 of the IBA Guidelines, and which is due to be heard by the Supreme Court), where the Court stated:

“We accept that inside information and knowledge may be a legitimate concern for the parties to have in overlapping arbitrations involving a common arbitrator but only one common party. that, in itself, it does not justify an inference of apparent bias.”

“The mere fact that an arbitrator accepts appointments in multiple references concerning the same or overlapping subject matter with only one common party does not of itself give rise to an appearance of bias. “[s]omething more is required” and that must be “something of substance”.”

The authors conclude:

“The submissions of the ICC, LCIA and CIArb in support of Halliburton’s application for permission to appeal to the Supreme Court all stressed the importance of clear guidance on the issues raised by the case. It is, however, necessary to be realistic. Parliament, in section 24(a) of the 1996 Act, has decreed that an arbitrator may be removed if “circumstances exist that give rise to justifiable doubts as to his impartiality”. Whatever their Lordships decide in Halliburton it is not going to change that underlying legislation and the need, in each case, for an enquiry as to whether there are “justifiable doubts”. As Almazeedi illustrates there will always be scope for a range of opinion, even amongst the most experienced and respected judges when called upon to examine the same set of facts, about whether they raise any (not just justifiable) doubts.”

“In light of decisions like that of the majority Almazeedi, prospective arbitrators could be forgiven for erring on the side of caution and disclose everything, relevant or irrelevant. Such a trend is not without eventual consequence. If it were to become the norm for arbitrators always to disclose everything, however innocuous, then that will become the norm and it will come to be seen as suspiciously divergent if they fail to do so. Thus the “fair-minded and informed observer” becomes gradually more suspicious and exacting, to the detriment of arbitration.”

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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