Conflicts of Interest In Arbitrations CIArb London Branch Seminar 19 June 2018 Adam Rosenthal Falcon Chambers

Conflicts of Interest “Arbitrators are assumed to be trustworthy and to understand that they should approach every case with an open mind” Per Hamblen LJ in Halliburton v Chubb Bermuda Insurance [2018] EWCA Civ 817

Arbitration Act 1996 Section 1(a) The object of arbitration is to obtain the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense. Section 24(1) Application to the Court to remove arbitrator where “circumstances exist that give rise to justifiable doubts as to his impartiality”.

Traffic-Lights IBA Guidelines on Conflicts of Interest in International Arbitration 2004, 2014 “It is in the interest of the international arbitration community that arbitration proceedings are not hindered by ill-founded challenges against arbitrators and that the legitimacy of the process is not affected by uncertainty and a lack of uniformity in the applicable standards for disclosure, objections and challenges.” (Introduction, IBA Guidelines 2014)

Bias & Conflicts of Interest: The Principles R v Bow Street Magistrates Ex p. Pinochet (No. 2) [2000] 1 AC 119 “…it is no answer for the judge to say that he is in fact impartial and that he will abide by his judicial oath; the purpose of the disqualification for apparent bias is to preserve the administration of justice from any suspicion of impartiality” (Per Lord Hope)

Bias & Conflicts of Interest: The Principles Porter v Magill [2002] 2 AC 357 “Whether fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.” “Fair-minded observer” Not to be confused with person who has brought the complaint Informed on all relevant matters, including legal framework, law and practice governing the arbitral process and practices of those involved as parties, lawyers and arbitrators.

Bias & Conflicts of Interest: The Principles Prior Association Group companies Business relations Personal relations Save & Prosper Pensions Ltd v Homebase Ltd [2001] L & TR 11 R v Bow Street Magistrates Ex p. Pinochet (No. 2) [2000] 1 AC 119 Association with legal or other advisers rather than party: A v B [2011] EWHC 2345

Bias & Conflicts of Interest: The Principles Halliburton Company v Chubb Bermuda Insurance Ltd [2018] EWCA Civ 817 (19 April 2018) Overlapping references. Disclosure? S.24 Application for removal of arbitrator Guidant LLC v Swiss Re International SE [2016] EWHC 1201 (Comm) Confidentiality?

Traffic-Lights Traffic-Light System: “Waivable red list” “Non-waivable red list” “Orange list” “Green list” “The borderline between the categories that comprise the Lists can be thin.” Replicated (with important differences) in the RICS Guidance Note on Conflicts of Interest.

Disclosure “Disclosure does not imply the existence of a conflict of interest; nor should it by itself result either in a disqualification of the arbitrator, or in a presumption regarding disqualification. The purpose of the disclosure is to inform the parties of a situation that they may wish to explore further in order to determine whether objectively – that is, from the point of view of a reasonable third person having knowledge of the relevant facts and circumstances – there are justifiable doubts as to the arbitrator’s impartiality or independence.” (IBA Guidelines, 2014)

IBA Guidelines and the Courts H v L [2017] 1 WLR 2280 (Halliburton Company v Chubb Bermuda Insurance Ltd at first instance) W Ltd v M Sdn Bhd. [2016] EWHC 422 IBA non-waivable red list: “the arbitrator or his or her firm regularly advises the party, or an affiliate of the party, and the arbitrator or his or her firm derives significant financial income therefrom.” Equivalent provision in RICS Guidance Note.