Challenging an Arbitrator, and What Happens When One Cannot Act

In one line

A party who objects to an arbitrator tells the tribunal, and if the tribunal rejects the objection the arbitration carries on to an award, which the objector may then attack in court.

In exam wording: section 13 provides the procedure for challenging an arbitrator, section 14 governs the termination of a mandate for failure or impossibility to act, and section 15 covers the remaining ways a mandate ends and the appointment of a substitute arbitrator.

Section 13: the challenge procedure, and its surprising design

Section 13(1): subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator. Party autonomy first, as everywhere in Part I.

Section 13(2): failing agreement, a party who intends to challenge shall, within fifteen days after becoming aware of the constitution of the tribunal, or after becoming aware of any circumstance referred to in section 12(3), send a written statement of the reasons for the challenge to the arbitral tribunal.

Note who receives it: the tribunal, not a court. And note the trigger: fifteen days from awareness, not from the appointment.

Section 13(3): unless the challenged arbitrator withdraws or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

This is the design that students find strange and it is worth pausing on. The tribunal decides a challenge to its own member, and where there is a sole arbitrator, he decides whether he himself should go. That looks wrong until you see the alternative: letting a party run to court every time it dislikes an arbitrator would hand any respondent a delaying tactic, which is exactly what the 1996 Act was written to end.

Section 13(4): if a challenge under an agreed procedure or under sub-section (2) is not successful, the tribunal shall continue the arbitral proceedings and make an arbitral award.

So an unsuccessful challenge does not stop the arbitration and there is no immediate appeal. The remedy is deferred.

Section 13(5): where an award is made under sub-section (4), the party who challenged may apply for setting aside that award under section 34.

Section 13(6): where an award is set aside on such an application, the Court may decide whether the arbitrator who was challenged is entitled to any fees.

Sub-section (6) is a small provision with sharp teeth. An arbitrator who wrongly refuses to step down risks conducting the whole reference for nothing.

The relationship with section 12(5) must be kept straight. Section 13 is the route for a challenge on the section 12(3) grounds. A person ineligible under section 12(5) is a different case: he cannot hold office at all, and the remedy has been treated as an application to terminate the mandate, or an application under section 11 for a valid appointment, rather than a section 13 challenge that the ineligible arbitrator himself would decide.