Arbitration laws and rules have continued to change over time, with arbitrators being urged to perform more transparently and impartially. Before now, there have been many concerns about whether arbitration is actually a reliable dispute resolution mechanism. As a result, proponents and practitioners have tried to prove that the system’s rulings can be trusted as much as Court rulings.
With the aim of making arbitration more attractive to disputing parties as a system where justice and fairness can prevail, Arbitrators are being charged to uphold fairness and transparency in their dealings, and one of the ways arbitrators are expected to do so is to ensure full disclosure of their relationship to any party and stakeholders in any dispute.
Arbitrators’ disclosure duties are a very important part of Arbitration. It is considered ethical that all arbitrators see it as a duty to make their roles in a case plain to prevent any perception of bias from disputing parties.
In 2020 alone, there were several cases from different states and jurisdictions globally in which Arbitrators’ Disclosure Duties were brought to the spotlight. The cases addressed arbitrators’ duties in disclosing conflicts. Also, in 2021 there has been an increasing number of Pro-transparency approaches and standards internationally that encourage professional arbitrators to reveal their professional relationship with every party in a dispute. These approaches are one of the many stances being taken to ensure best practices in arbitration.
Apart from arbitration institutions’ efforts to ensure full disclosure by arbitrators, Annulment committees and National Courts are continually setting rules and laws that help refine arbitrators’ legal position and obligations on disclosures and their application to different contexts.
Arbitrator Disclosure Duties
Arbitrators’ disclosure duties are not a new concern. This is evident in the CA Ruling, where the court held that the 1996 Act of Section 33 requires that an arbitrator carries out his duties impartially and fairly. The court stated that to prevent bias, arbitrators must carry out full disclosure to remove all suspicion of neutrality in a ruling.
In 2020, while there were numerous cases in which Arbitrators’ disclosure obligations were called into question, there were a number of them that stood out and brought out arbitrators’ obligation to disclosure in The Spotlight. Some of these cases are outlined below
• In June 2020, of the Eiser v Spain case, an ad hoc committee annulled a €128m award ruled against Spain based on the Energy Charter Treaty. The award was annulled due to the claimant arbitrator’s refusal to disclose his previous relationship as his claimants’ damages expert. (which was gained with his role as the claimant arbitrator and also as counsel in unrelated arbitration cases). This case served as one of the global disputes in which Arbitrator disclosure obligation was brought under the spotlight.
• Another case that raised eyes was a case Halliburton v Chubb. The United Kingdom supreme court in November 2020 stated its judgment in the case. The case consisted of a challenge to eliminate the chair of a kind of Bermuda ad hoc arbitral tribunal due to the apparent underlying bias after his failure and refusal to disclose his relationship and appointment to the tribunal through one of the parties in a different arbitration started by a third party. The UK supreme court did not adhere to the appeal and refused to remove the arbitrator as there was no reasonable doubt for him to act impartially.
While the arbitrator was not removed from the case due to his involvement with one of the parties in an unrelated case, the development actually showed that the court is on the lookout to stop situations where arbitrators may tend to act in a biased manner. It also outlines the need for arbitrators and arbitral tribunals to disclose their relationship with a party being presided over.
• The court of Appeal in Sao Paulo in September 2020 annulled an award on a commercial arbitration dispute after the arbitrator presiding over the case refused to disclose that he had been appointed by one of the parties in an unrelated arbitration. The court of appeal believed that the arbitrator ending up ruling for the party which had hired him could have been because he was appointed for the other case. The court stated that the arbitrator was under ethical arbitration to disclose his appointment and only preside if all parties agree unanimously.
Arbitration disclosure duties and obligations are one of the major talking points in the arbitration world, and the reason is not far-fetched. Parties involved in a dispute desire that they get a fair, transparent, and impartial ruling, and one of the ways to get that is when all arbitrators and the tribunal work as neutral observers and decision-makers.
For all fair practitioners, disclosure is non-negotiable when it is needed and will help a case. A practitioner may run at risk of losing reputation and cost their client more if appropriate disclosure is not done. The biggest arbitration firms with the most skillful and experienced arbitrators are well committed to ensuring that they do not cost their clients at any time by ensuring that their duties and activities are performed transparently and cannot be faulted.
Rattaskuten is one of the top firms with highly professional arbitrators that ensure that their clients are not in any way hard done impartially from lack of disclosure. They are highly efficient and ensure that their clients get the best possible outcome from any case. The firm can be reached via this link and is open to inquiry.
Rattsakuten is a leading law firm focused on Commercial Arbitration and Dispute Resolution. Based in Sweden, Rattsakuten handles dispute resolution and Arbitration matters before the SCC (Swedish Chamber of Commerce), ICC, HKIAC, and several other Arbitration tribunals.