a) An arbitrator can be challenged only in circumstances that give rise to justifiable doubts as to their impartiality or independence, or if the arbitrator does not possess the necessary qualifications agreed by the parties. Explain. (10 marks)
b) Explain the costs incurred in the arbitration process. (10 marks)
(20 marks, 2011 Q5)
a) The court exercised powers to revoke the arbitrator’s authority or to restrain arbitral proceedings on the grounds that:
- the arbitrator was not or might not be impartial;
- to order that the arbitration agreement cease to have effect where the dispute involved questions of fraud;
- to remove an arbitrator for delay in entering on the reference or making the award;
- to set aside, confirm or vary the award on appeal on a question of law; and
- to order the arbitrator to state a case on an issue of law arising from the arbitration proceedings.
Section 14 — Grounds for challenge
This section requires the arbitrator to disclose any circumstances likely to give rise to justifiable doubts to his impartiality or independence. It then sets out the two grounds on which arbitrators can be challenged.
- The first ground is circumstances which give rise to justifiable doubts as to the arbitrator’s impartiality or independence.
- The second ground is that the arbitrator does not possess qualifications agreed to by the parties.
(a) An arbitrator may be challenged only if circumstances exist that, from the perspective of a reasonable third person having knowledge of the relevant facts, give rise to justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties.
(b) An arbitrator shall decline to accept an appointment or, if the arbitration has already been commenced, refuse to continue to act as an arbitrator if he or she has any doubts as to his or her ability to be impartial or independent.
(c) Justifiable doubts necessarily exist as to the arbitrator’s impartiality or independence if there is an identity between a party and the arbitrator, if the arbitrator is a legal representative of a legal entity that is a party in the arbitration, or if the arbitrator has a significant financial or personal interest in the matter at stake.
(d) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.
(e) The parties are free to agree on a procedure for challenging an arbitrator, subject to mandatory court control of the challenge as provided for by the arbitration law in force at the seat of the arbitration.
Sundra Rajoo. 2009. Law, Practice and Procedure of Arbitration - The Arbitration Act 2005 Perspective. Malayan Law Journal  2 MLJ. Page cxxxvi.
Arbitration Act 2005, Section 14. Downloaded from http://www.agc.gov.my/Akta/Vol.%2013/Act%20646.pdf