Independence and Impartiality: the Grounds of Challenge

In one line

Section 12 requires a prospective arbitrator to disclose in writing, sets out the two grounds of challenge, and, since the 2015 amendment, makes certain relationships listed in the Seventh Schedule an absolute disqualification, guided in the case of disclosure by the Fifth Schedule and made in the form of the Sixth Schedule.

Section 12(1): the duty to disclose

When a person is APPROACHED IN CONNECTION WITH HIS POSSIBLE APPOINTMENT as an arbitrator, he shall DISCLOSE IN WRITING any circumstances:

(a) such as the existence, either DIRECT OR INDIRECT, of any PAST OR PRESENT relationship with or interest in any of the parties or in relation to the SUBJECT-MATTER in dispute, whether FINANCIAL, BUSINESS, PROFESSIONAL or other kind, which is LIKELY TO GIVE RISE TO JUSTIFIABLE DOUBTS as to his independence or impartiality; and

(b) which are LIKELY TO AFFECT HIS ABILITY TO DEVOTE SUFFICIENT TIME to the arbitration, and in particular his ability to COMPLETE THE ENTIRE ARBITRATION WITHIN A PERIOD OF TWELVE MONTHS.

Clause (b) is the 2015 amendment's answer to the arbitrator who accepts more references than he can hear, and it is read with section 29A, which sets the twelve-month limit for the award.

Explanation 1: the grounds stated in the FIFTH SCHEDULE shall GUIDE in determining whether circumstances exist which give rise to justifiable doubts.

Explanation 2: the disclosure shall be made in the form specified in the SIXTH SCHEDULE.

12(2): the arbitrator's duty is continuing: from the time of his appointment and throughout the arbitral proceedings, he shall without delay disclose any such circumstances unless the parties have already been informed of them by him.

Section 12(3): the two grounds of challenge

An arbitrator may be challenged ONLY IF:

(a) circumstances exist that give rise to JUSTIFIABLE DOUBTS as to his INDEPENDENCE OR IMPARTIALITY; or

(b) he DOES NOT POSSESS THE QUALIFICATIONS AGREED TO BY THE PARTIES.

The word is "only", so the list is exhaustive, and the standard is objective: not whether the arbitrator is in fact biased, but whether circumstances exist that give rise to justifiable doubts, which is the familiar reasonable-apprehension test.

12(4): a party may challenge an arbitrator APPOINTED BY HIM, or in whose appointment he PARTICIPATED, ONLY FOR REASONS OF WHICH HE BECOMES AWARE AFTER THE APPOINTMENT HAS BEEN MADE. A party cannot appoint a man knowing his relationship with it and then complain of that relationship.

Section 12(5): the absolute bar

Notwithstanding any PRIOR AGREEMENT TO THE CONTRARY, any person whose RELATIONSHIP with the PARTIES or COUNSEL or the SUBJECT-MATTER of the dispute falls under any of the categories specified in the SEVENTH SCHEDULE shall be INELIGIBLE to be appointed as an arbitrator.