Challenge of arbitrators' neutrality

Abstract

One of the fundamental principles required by arbitrators is to be able to act impartially and independently. This principles is also embodied in the Arbitration Act 2005 that was modelled from the UNCITRAL Model Law. Impartiality and independence throughout a proceeding is necessary to avoid unwanted challenge in future. Despite the existence of duty to disclose any interests and circumstances which may cause doubts to arbitrators’ neutrality, some arbitrators continuously neglecting this and causing challenges to their neutrality or sometimes to the award rendered. Nonetheless, there is no specific definition of impartiality and independence in the Act nor explanation or assistance provided in the Act to illustrate on the alarming duty to disclose. Fortunately, at international level the International Bar Association (IBA) had worked together to assist arbitrators on the duty to disclose by introducing the IBA Guidelines on Conflict of Interest which is a great help to arbitrators to understand the circumstances that require disclosure in the proceeding. The purpose of this study is to identify the Malaysian courts and arbitrators understanding on impartiality and independence of arbitrators in discharging their duty. Due to confidentiality, arbitrators’ practices and decisions on the challenge are not available. As such, reference to courts cases was used in carrying out this task. Cases concerning challenges due to justifiable doubts to arbitrators’ impartiality and independence were analyzed. The reasons for every challenge made were analyzed critically and match with the IBA Guidelines on Conflicts of Interest in International Arbitration 2014. This IBA guidelines was chosen as it is one of its kind and it provides list of situations according to their seriousness, which may require disclosure or not. It is apparent that despite there were no specific reference made to the IBA Guidelines, our local courts in essence had applied the same principles in dealing with challenge to the arbitrators’ neutrality.