Hazeover price5/6/2023 ![]() A less contentious approach, and without subordinating the legal duty of disclosure to the duty of impartiality, might be to imply it in appointment contracts by necessity and public policy considerations ( Haywood v Newcastle upon Tyne Hospitals NHS Foundation Trust UKSC 22, ). The Supreme Court’s re-interpretation of section 33 of the 1996 Act not only appeared incompatible with the legislative intention but also rendered this duty bluster and bombast. The proclaimed root – the 1996 Act – which modelled on the provisions in the UNCITRAL Model Law on International Commercial Arbitration 1985 (the “ UNCITRAL Model Law”), in fact deliberately abstained from any provisions on the duty of disclosure in order to keep pace with evolving standards and expectations in the arbitration community. Baffling doctrinal rootĪt the outset, the birth defect of the duty of disclosure deprives it of any self-standing existence. As such, although Mr Rokison did default in complying with the duty of disclosure, and tainted the fairness of the arbitration by stripping Halliburton of any opportunities to flag their reservations in the process, having balanced different factors, the Supreme Court concluded that Mr Rokison needed not to resign. ![]() However, a failure of disclosure does not automatically entitle removal, but is at most a contributing factor. An arbitrator therefore is obliged to disclose any related appointments to clear any appearance of bias. The judge considered that only if an arbitrator makes the compulsory disclosure he would fulfil such statutory duty of impartiality and the corresponding implied term in the appointment contract.Īpplying the legal principles, the Supreme Court acknowledged that a common party may indeed test its case and thereby obtain an advantage in overlapping arbitration references. In Lord Hodge’s view, this is sowed in section 33 of the 1996 Act which requires an arbitrator to act fairly and impartially in arbitral proceedings. The Supreme Court decided that there is a “secondary” legal duty on an arbitrator to disclose circumstances that might obscure his or her independence or impartiality. Upon discovery Halliburton challenged the impartiality of Mr Rokison and requested removal under section 24(1)(a) of the Arbitration Act 1996 (the “ 1996 Act”). Unbeknownst to Halliburton, Mr Rokison was subsequently appointed as an arbitrator in two other arbitration references arising from the Deepwater Horizon incident. Without the parties’ agreement on the third arbitrator, the High Court appointed Kenneth Rokison QC after a contested hearing. Backgroundįollowing a US$1.1 billion settlement consequent to an oil well blowout in the Gulf of Mexico which led to the destruction of the Deepwater Horizon drilling rig in 2010, Halliburton sought indemnity from Chubb under its liability insurance policy through arbitration. It is respectfully submitted that the Supreme Court should adopt a bright line test: an arbitrator failing the duty of disclosure should be removed with remedies to the arbitrating parties. The logical leaps regarding the resignation mechanism and proposed sanctions would be identified. ![]() It will be argued that, first, the doctrinal root of the duty of disclosure is not properly entrenched and second, the imposition of a duty of disclosure, even though conducive to fostering transparency in international arbitration, is meaningless as it carries no practical consequences. ![]() This article will critically examine the reasoning of the unanimous Supreme Court decision as pronounced by Lord Hodge. This judgment was widely applauded for clarifying the English law on arbitrator conflicts, but it is puzzling that there was no practical sanction against the challenged arbitrator who was found to have failed to obey his or her duty of disclosure. In Halliburton Company v Chubb Bermuda Insurance Ltd UKSC 48, the UK Supreme Court held that there is a legal duty of disclosure upon an arbitrator of facts and circumstances that might overshadow his or her impartiality. (This article was published in the August 2022 Issue of the Hong Kong Lawyer) ![]()
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