LESSONS ON ARBITRAL’S IMPARTIALITY – HALLIBURTON v CHUBB

Postscript: An update that the Halliburton Test is also applied to CIPAA’s Adjudicators test of ‘apparent bias’[1] in a setting aside attempt[2], where the court held that the first rule of natural justice “overlaps with” but is “distinct from the Duty to be Impartial”[3], to include, the “real danger of bias” test (“Real Danger Test”) and the “real possibility of bias” test (“Real Possibility Test”)[4].

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[1] Rosha Dynamic Sdn Bhd v Mohd Salehhodin bin Sabiyee & Ors and other cases [2021] MLJU 1222
[2] S 15 of the Construction Industry Payment and Adjudication Act 2012 (CIPAA)
[3] “fair-minded and informed observer”
[4] Bar Council v Tun Dato Seri Arifin bin Zakaria & Ors [2020] 4 MLJ 773

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LESSONS ON ARBITRAL’S IMPARTIALITY – HALLIBURTON v CHUBB

Having now a local case employing Halliburton v Chubb on arbitrator bias and duty of disclosure, I had revamped my article that I wrote earlier this year in January, 19th.
 
In Halliburton v Chubb,  the legal-test that applies to duty of disclosure[1], even if “real-possibility of bias”[2] not established on facts, duty of disclosure[3] arises as-if it might "reasonably" give-rise to doubt[4]; assessment of “possibility of bias”[5] following disclosure, should be applied through the perspective of "fair-minded[6] and informed-observer"[7], in "realities of international-arbitration" context[8] and "custom and practice in the relevant-field of arbitration", i.e. provided no-breach of confidentiality[9], yet to provide as much information that if you can't disclose[10], otherwise arbitrator “must-resign”[11]; and failure to disclose[12] is that, observer can assess whether there is a “real possibility of bias”, be made at hearing-date to “remove the arbitrator”, and not at the arbitrator's acceptance-date of subsequent appointment.
 
In Low Koh Hwa @ Low Kok Hwa (practising as sole Chartered Architect at Low & Associates) v Persatuan Kanak-Kanak Spastik Selangor & Wilayah Persekutuan and another case [2021] MLJU 430, the court set aside an award[13] on the basis of arbitrator apparent bias[14], in conflict with public-policy, breaching the rules of natural-justice. The court holds, the arbitrator must, statutorily, make full and timeous disclosure, which are likely to give rise to justifiable doubts as to the arbitrator's impartiality or independence, which would enable a 'fair-minded and informed observer' to decide objectively on whether there are justifiable doubts on the arbitrator's impartiality and/or independence[15]; estoppel cannot be relied if the applicant fails within the time-bar objection[16] when an arbitrator failed to give ‘full and timeous’ disclosure, statutorily imposed[17]; and impacted the award as the arbitrator "would have reached a different decision if not for the [failure to make full and timeous disclosure]"
 
Concluding, the Malaysian case did not concern multiple appointment as per Halliburton. It is significant that the applied principles determine the extent of an arbitrator's duty of disclosure and set threshold for setting aside an award for apparent bias. The court acknowledged the difficulty in proving ‘apparent bias’ yet it sends signal to arbitral institution not to only limit their panel of arbitrators to a small significant number, i.e. less than 20, when the disputing parties in the construction industries are limited.[18]
 
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[1] S.24(1)(a)1996Act
[2] Porter v Magill[2001] 1UKHL67; R v Gough[1993] AC646: bias is met as long as the court is satisfied that there is a sufficient degree of possibility of bias.
[3] Davidson v Scottish Ministers(No 2)[2004]UKHL34:a legal duty of disclosure in s.33,1996Act
[4] R v Sussex[1924] 1KB256 at 259:justice should not only be done, but be seen to be done; Findlay v UK[1997] 24EHRR221:tribunal must be subjectively free from personal prejudice, be impartial from an objective viewpoint; W v M[2016] EWHC422(Comm)
[5] R v Gough[1993] AC646:real likelihood/danger of bias test; Re Medicaments(No.2)[2001] 1WLR700
[6] Helow v Secretary of State Home-Department[2008]UKHL62:observer not-judge on any-point before acquiring  full-understanding of both sides.
[7] Porter v Magill[2001]UKHL67:“The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.”; Johnson v Johnson (2000)201CLR488:fair-minded and informed-observer is “neither complacent nor unduly sensitive or suspicious”.
[8] A v B [2011]EWHC 2345(Comm); ASM Shipping v TTMI[2005]EWHC2238(Comm):requirement in English law that all arbitrators, appointed, comply with the same high-standards of impartiality, appears to be accepted as the legal-norm internationally.
[9] Dolling-Baker v Merrett[1990]1WLR1205(CA); Ali Shipping v Shipyard Trogir[1999]1WLR314; Development of City of Moscow v Bankers Trust[2004]EWCACiv314:English-seated arbitrations are both private and confidential.
[10] Halliburton v Chubb[2020]UKSC48:arbitrator’s obligation of confidentiality which prevent disclosure, is an unsettle law and case-sensitive.
[11] AWG v Alexander Fraser[2005] EWHC2786(Ch); TM v. Ghana[2003] PCACaseNo.2003-03
[12] PAO Tatneft v Ukraine[2019]EWHC3740(Ch):failure of disclosure may then be a factor to establish justifiable doubts as to the arbitrator’s impartiality.
[13] S.37 Malaysian Arbitration Act 2005 (MAA 2005): award may be set aside […] if - (i) a party […] was under any incapacity
[14] S.14 MAA 2005
[15] Halliburton v Chubb[2020]UKSC48: the ‘real possibility of apparent bias’ by Lord Hodge
[16] S.15(1) MAA 2005
[17] S.14(1) and (2) MAA 2005
[18] Reported in PAM annual report 2020/2021, p.40: 13 nos. as per Dec 2020