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Arbitration Act review: 2 - Arbitrator independence, impartiality and disclosure

Following on from our first commentary on the Law Commission’s recently published Consultation Paper (CP) summarising its review of the Arbitration Act 1996 (the Act) which addressed confidentiality, we now turn to the second issue considered: arbitrator independence, impartiality and disclosure.  

It is a well-known maxim that if any judicial system is to be credible then justice must be done and “must be seen to be done”. This means that not only must the outcome be fair, but so must be the process.

Much has been written recently on the issues of independence and impartiality of arbitrators, following the Supreme Court’s 2020 judgment in Halliburton Co v Chubb Bermuda Insurance Ltd, which considered whether an arbitrator in one arbitration had a duty to disclose the fact that he had been appointed in another which involved the same claimant, the same facts and overlapping issues, but a different defendant, and whether there had been or could be “apparent bias” as a consequence.

Currently the Act does not contain any express requirement that arbitrators are independent (i.e. they have no connection to the arbitrating parties), nor is there any express duty on arbitrators to reveal any circumstances which might put impartiality or independence in issue. The Act does however require arbitrators to be impartial (i.e. they must be neutral as between the arbitrating parties), noting that a failure to abide by this duty could result in removal by the court (under s. 24(1)(a)) or a challenge to the award for “serious irregularity” (under s. 68).  

The CP considers whether the requirement of impartiality is adequate, or whether the Act needs to go further and require an obligation of independence, thereby bringing it into line with other foreign legislation or arbitral rules.

The provisional finding in the CP is that impartiality is more important than independence and no change to the drafting required. As it puts it “if the arbitrator is impartial and is seen to be impartial, it should not matter whether they have a connection to the parties before them”.

The CP observes that requiring an arbitrator to be independent of the arbitrating parties, or the lawyers representing them, can be very difficult to achieve in practice given the limited number of professionals and the often-confined areas in which they specialise (e.g. sports, maritime or commodities arbitrations), and would too often result in challenges to arbitrator appointments.

The CP does however propose that the Act ought to go further in terms of duties on arbitrators to disclose circumstances which may bring into question the impartiality of the tribunal (therefore responding to the Supreme Court’s findings in Halliburton). However, it remains to be seen whether the proposed drafting change will provide the detail as to what is expected from arbitrators in terms of their disclosure obligations, or whether it will be dealt with as a general duty (allowing the courts to further develop the law in this area).

It is likely that arbitration practitioners would welcome the provisional changes proposed by the CP as a pragmatic and positive development to bring the Act into closer alignment with the developing case law around duties on arbitrators.

'We provisionally conclude that there should be no new express duty of independence.....We think what matters instead is that arbitrators are impartial. We propose codifying the common law which requires an arbitrator to disclose circumstances which might reasonably give rise to justifiable doubts as to their impartiality'


dispute resolution