English High Court confirms that without notice applicants are under an onerous duty to satisfy the requirement of full and frank disclosure.

By Oliver E. Browne, Robert Price, and George Schurr

In the recent cases of Fundo Soberano de Angola & ors v. Jose Filomeno dos Santos & ors [2018] EWHC 2199 (Comm) and Galagaev & ors v. Ananyev & ors (2018) QBD (Comm) (unreported), the English High Court has confirmed that the duty of full and frank disclosure is a serious and onerous obligation that applies to litigants and their legal advisers alike. In Fundo Soberano v. dos Santos, Popplewell J held that legal advisors have a responsibility to ensure their client understands and complies with the duty of full and frank disclosure on a without notice application, just as a legal advisor has an obligation to ensure a client understands and complies with the general duty to disclose documents under CPR Part 31. Further, the full and fair manner in which material is presented to the court, not simply its disclosure, is of critical importance to the court’s consideration of whether the duty has been discharged. Males J held in Galagaev that in large and complex cases, it is incumbent upon the applicant’s legal advisors to draw the judge’s attention explicitly to material issues and to explain their impact on the applicant’s case. Simply directing the judge to the relevant material without explaining the significance of the material in question may be insufficient to discharge the duty of full and frank disclosure.

Following these judgments, legal advisors would be well advised to inform their clients of the serious nature and extent of their obligations as soon as a without notice application is considered. In particular, if advising lay clients “from different legal and cultural backgrounds and with varying levels of sophistication” (Fundo Soberano v. dos Santos at §53), practitioners must positively act to ensure that their lay clients undertake “the fullest inquiry into the central elements of their case” (Fundo Soberano v. dos Santos at §83). To the extent that the circumstances require, practitioners must actively supervise their clients’ compliance with that obligation to ensure that the applicant’s case is presented as fully and fairly as the duty requires.

Arbitrators should disclose subsequent appointments to related arbitration proceedings, particularly if cases materially overlap.

By Oliver E. Browne and Robert Price

In the Halliburton v Chubb ruling, the Court of Appeal held that an arbitrator who did not disclose subsequent appointments to related arbitration proceedings should have disclosed those subsequent appointments both as a matter of good practice and as a matter of law. The lack of disclosure did not however constitute sufficient grounds for the removal of the arbitrator under section 24(1)(a) of the Arbitration Act 1996 for justifiable doubts as to his impartiality.

Background

The explosion on the Deepwater Horizon oil rig spawned a number of related arbitration proceedings involving various parties. Transocean was the owner of the rig, BP was the lessee of the rig, and Halliburton provided cementing and well-monitoring services to BP. Both Transocean and Halliburton obtained insurance from Chubb.