MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
Challenge Procedure Under the default procedure governing the challenge or removal of arbitrators, any party who intends to challenge the appointment of an arbitrator shall send a written statement of the reasons for the challenge to the arbitral tribunal, within 15 days of becoming aware of the constitution of the arbitral tribunal or of any of the reasons referred to above (see Section 15 of the AA 2005). In ZMSB v PSB [2025] 1 MLJ 120 , the Court of Appeal held that the timeframe to challenge the appointment of an arbitrator set out above must be complied with; a party cannot reserve its right to challenge the appointment until after the award has been delivered at the conclusion of the arbitration. Unless the challenged arbitrator withdraws from office or the other party agrees to the challenge, the arbi - tral tribunal shall decide on the challenge. Where the challenge is not successful, the challenging party may apply to the High Court to decide on the challenge, within 30 days of receiving notice of the decision rejecting the challenge. The High Court’s decision on the matter is final and non-appealable. 4.5 Arbitrator Requirements A person who is approached in connection with a pos - sible appointment as arbitrator is required to disclose any circumstances that are likely to give rise to justifi - able doubts as to his or her impartiality or independ - ence under the AA 2005 without delay (see Section 14 (2) of the AA 2005). In the case o f Persatuan Kanak-Kanak Spastik Selan- gor & Wilayah Persekutuan v Low Koh Hwa & Another Appeal [2023] 1 CLJ 536, the Court of Appeal found that although the arbitrator did not make the declara - tion promptly as required by Section 14 of the Arbitra - tion Act (AA), the crucial information regarding his rela - tionship with a witness was disclosed. This disclosure was enough to raise concerns about his impartiality or independence. The party’s decision not to object to the arbitrator’s continued appointment, after this disclosure indicates confidence in the arbitrator’s impartiality. The disclo - sure averted a breach of public policy.
the Director is final and non-appealable (see Section 13 (9) of the AA 2005). Multi-Party Arbitrations Where there are multiple parties in an arbitration, where the arbitration consists of a sole arbitrator and the parties fail to agree on the arbitrator, any party may apply to the Director of the AIAC for the appointment of the sole arbitrator. The decision of the AIAC is final and non-appealable. There is no default procedure in the AA 2005 gov - erning multi-party arbitrations where the number of arbitrators is three, as the AA 2005 only states that “each party shall appoint one arbitrator”. However, it is common practice for multiple parties on the same side (whether as joint claimants or respondents) to jointly appoint an arbitrator and Rule 3.5 of the AIAC Arbitration Rules 2023 addresses this. 4.3 Court Intervention Where the Director of the AIAC is unable to act or fails to act within 30 days when any party applies to him or her for the appointment of an arbitrator, any party may apply to the High Court for the appointment of the arbitrator (see Section 13 (7) of the AA 2005). If such an application is made, the High Court is required to have due regard to any qualifications required of the arbitrator by the agreement of the parties, other con - siderations that are likely to secure the appointment of an independent and impartial arbitrator, and the advisability of appointing an arbitrator of a nationality other than those of the parties. The appointment of the arbitrator by the High Court in this manner is final and non-appealable. The High Court does not have any power under the AA 2005 to intervene in the selection of arbitrators in any other manner. 4.4 Challenge and Removal of Arbitrators Grounds for Challenge of Arbitrators An arbitrator may be challenged in two situations: if the circumstances give rise to justifiable doubts as to his or her impartiality or independence; or if he or she does not possess the qualifications agreed by the parties (see Section 14 of the AA 2005).
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