An Arbitrator’s Duty to Disclose Conflict of Interest: Revisiting Global Gas and Refinery Limited v Shell Petroleum Development Company

Abstract

The hallmark of arbitration is the neutrality of the process and the twin pillars of neutrality are impartiality and independence of an arbitrator. The requirements of impartiality and independence “represents core obligations of an arbitrator” that are “so widely recognized that they amount to general international principles and are therefore incumbent on any arbitrator in all circumstances.” The basis for challenging the impartiality or independence of an arbitrator in most jurisdictions including under the UNCITRAL Model Law is any circumstances that is likely to give rise to justifiable doubt. The Arbitration and Conciliation Act (“ACA”) which is the principal legislation governing arbitration in Nigeria, also adopts the same approach. Specifically, Sections 8 and 45 of the ACA, applying to domestic and international arbitration respectively, impose a duty on an arbitrator to disclose to the parties, any circumstances that is likely to give rise to any justifiable doubts as to his impartiality or independence when approached in connection with an appointment, when appointed, and throughout the proceedings. These Sections also empowers a party to challenge an arbitrator if circumstances exist that give rise to justifiable doubts as to the arbitrator’s impartiality or independence.

Notably, as is the case in many jurisdictions, the ACA does not provide the circumstances that would require disclosure by an arbitrator. Thus, leaving arbitrators to apply discretion or rely on soft law instruments in considering circumstances justifying disclosure. The effect of non-disclosure may affect the enforceability or otherwise of the arbitral award and have grave consequences on the arbitration process. The recent case of Global Gas and Refinery Limited v Shell Petroleum Development Company exemplifies the foregoing. Interestingly however, the Lagos State High Court in Global Gas held that in order to preserve the integrity of the arbitral process and not subject it to ridicule, an arbitrator against whom an objection of bias is raised, should resign from the tribunal instead of putting up a challenge.

Global Gas therefore presents interesting perspectives on disclosure considerations, raising pertinent questions and issues including What should be disclosed and when should disclosure be made? Does objection of bias automatically justify recusal? and Does the Global Gas case provides appropriate guidance and standard for dealing with issues of arbitrator’s bias resulting from non-disclosure of conflict of interest in Nigeria?

This Article considers all these questions with a view to recommending best practice approach for Nigerian courts and arbitrators alike when considering issues relating to independence and impartiality. Prior to distilling the questions and issues raised, it is important to present the facts of the Global Gas case.

Keywords: Arbitration, Neutrality, Impartiality, Independence, Disclosure; Conflict of Interest