Status and qualifications of arbitrators
Appointment of arbitrators
Challenge and removal
Emergency arbitrators

This article is part of a series on conducting arbitration in Malaysia.(1)

Status and qualifications of arbitrators

Number of arbitrators
1952 Act
There is no definition of an "arbitral tribunal" in the Arbitration Act 1952 (the 1952 Act).(2) The parties have the freedom to agree upon a sole arbitrator or a number of arbitrators. The arbitration agreement would normally specify the number of arbitrators. If the parties fail to determine the number of arbitrators, or in other words, in the absence of an agreed number, section 8 of the 1952 Act provides that every arbitration agreement shall be deemed to include a provision that the reference shall be to a single arbitrator.

2005 Act
The Arbitration Act 2005 (the 2005 Act) preserves the parties' freedom to determine the number of arbitrators for reference of their dispute. Section 12 does not impose limits on who may be appointed as an arbitrator. The parties are free to choose their arbitral tribunal. Where the arbitration agreement or the parties do not stipulate the number of arbitrators, a single arbitrator will constitute a tribunal.

Section 12 of the 2005 Act further provides that where the parties have failed to determine the number of arbitrators, there shall be three arbitrators in instances of international arbitrations and a single arbitrator in instances of domestic arbitrations. In practice, parties normally select an uneven number of arbitrators. The parties are also free to agree on a procedure for appointing the presiding arbitrator.

Legal status
The appointment of an arbitrator constitutes a special type of contract between the arbitrator and the parties for the purpose of arbitrating upon the dispute between the parties. The contract is therefore based upon the contract between the parties to submit the matter to the arbitrator for arbitration of the dispute.

Qualifications and accreditation requirements
Neither the 1952 Act nor the 2005 Act imposes any special qualification requirements on arbitrators. Section 13 of the 2005 Act provides that no person shall be precluded by reason of nationality from acting as an arbitrator unless there is an agreement to the contrary. Arbitrators also do not need legal training. Parties may contractually agree that arbitrators shall have specific qualifications by specifying this in their arbitration agreement or clause. However, the decision of the High Court under the 1952 Act in Salutory Avenue (M) Sdn Bhd v Malaysia Shipyard & Engineering Sdn Bhd & Anor appears to suggest that as a matter of a minimum standard, an arbitrator must possess knowledge of the subject matter of the dispute concerned (in this instance, the shipbuilding industry).(3)

Under the 2005 Act, the High Court in Sebiro Holdings Sdn Bhd v Bhag Singh & Anor held that in the absence of any agreement between the parties on the qualifications to be possessed by the arbitrator, the appointment of an arbitrator cannot be challenged for any lack of qualifications.(4)

It should also be noted that by virtue of section 37A, which came into force in June 2014, there are now no restrictions under the Legal Profession Act 1976 for international arbitrators and lawyers to participate in arbitral proceedings in Malaysia.

Appointment of arbitrators

Methods of appointment
The 1952 Act and the 2005 Act provide autonomy to the parties to decide on matters relating to the appointment of the arbitral tribunal, subject to any rules of arbitration that may be adopted. In Ragawang Corporation Sdn Bhd v One Amerin Residence Sdn Bhd, the High Court held that where parties have agreed on a set of procedures to be adhered to before applying to the court for the appointment of an arbitrator, the procedures agreed have to be followed before the court may exercise its jurisdiction to appoint an arbitrator.(5)

Appointing authorities
1952 Act
Where the parties are unable to agree on the appointment of an arbitrator, they have to resort to section 12 of the 1952 Act for the High Court to appoint the arbitrator. The identity of the arbitrator selected is left to the discretion of the High Court judge. The general practice is for both parties to file an affidavit suggesting names of suitable arbitrators or, alternatively, to bring to the attention of the court the nature of the dispute so that a suitable and appropriate arbitrator can be appointed.

2005 Act
The procedure for appointment of arbitrators under the 2005 Act is set out in section 13 of the 2005 Act. Section 13 also explains what is to happen in the event of a procedural failure or where no provisions are agreed upon. It corresponds with article 11 of the United Nations Commission of International Trade Law Model Law (the Model Law) and adopts a two-level approach to grant the parties autonomy in determining the procedure for the appointment of arbitrators followed by any default mechanism if none has been agreed.

The parties are also generally given a free hand to agree on the procedure for the appointment of the arbitrator or arbitrators; this is provided for in section 13(2) of the 2005 Act.

Effect of refusal of one party to cooperate in constitution of arbitral tribunal
1952 Act
The 1952 Act provides under section 9(b) that where an arbitration agreement provides that the reference shall be to two arbitrators – one to be appointed by each party – and one party fails to appoint an arbitrator, after 21 clear days, the party who has appointed an arbitrator may request this arbitrator to act as sole arbitrator. If the party does so, the award of the arbitrator so appointed is binding on both parties as if they have been appointed by consent.(6)

The two party-appointed arbitrators would normally appoint the third arbitrator to constitute the tribunal. It often occurs, however, that a party may refuse to or fail to appoint their own arbitrator, resulting in inability to appoint the third arbitrator. The 1952 Act makes no provision for such a situation. In practice, an application is normally made to the court for the appointment of the second arbitrator, who would then, together with the party-appointed arbitrator, appoint the third arbitrator. The arbitration agreement may, however, make provision for this.

2005 Act
Under section 13 of the 2005 Act, where the parties fail to make provision for the appointment procedure in the arbitration agreement or if there is disagreement or they refuse to exercise their rights to appoint a member of the arbitral tribunal, the director of the Asian International Arbitration Centre (AIAC) is given the power to appoint the arbitrator and must do so within 30 days. Failing this, the parties can proceed to court to have the appointment made. There is statutory guidance in section 13(8) of the 2005 Act as to how the director should exercise their discretion in making any appointment. There is no right of appeal from the decision of the director.

Resignation and its consequences
1952 Act
Section 12(b) of the 1952 Act provides for cases where the arbitrator refuses to act, is incapable of acting or dies. Refusal to act is a question for the court and not for the arbitrator. It must be an actual refusal to act as arbitrator and not merely a refusal to act in a particular manner.

The word "incapable" in section 12(b) refers to some incapacity arising after the date of the appointment or that was not known to the parties at that date. Subject to section 25(1), the court is not entitled to treat an arbitrator as incapable if the parties rightly or wrongly considered them to be capable. The standard of capability is that of the parties who selected the arbitrator. Having selected them, they must take them for better or worse. However, the 1952 Act makes no provision for what is to happen if the arbitrator should fail or neglect to act. In such a situation, the court has the power to remove the arbitrator concerned and to replace them pursuant to section 14(3)(a) and sections 12(b) and (d) of the 1952 Act.

2005 Act
Article 14 of the Model Law, as codified under section 16 of the 2005 Act, sets out an arbitrator's legal or physical inability to perform their functions as reasons for revoking their authority. Section 16(1) refers to an arbitrator who is legally or physically unable to perform the functions entrusted to them or who for some reason fails to act without undue delay. The non-performing arbitrator can voluntarily withdraw from office or the parties can agree to terminate their mandate. Section 16(1) provides three grounds that constitute an arbitrator's inability:

  • they are legally unable to perform their functions;
  • they are factually unable to perform their functions; or
  • they fail to act without undue delay for other reasons.

"Failure to act without undue delay" would involve situations at one end of the spectrum where the arbitrator has "unequivocally and absolutely refused to act which has resulted in the creation of a vacancy" to a consideration of varying circumstances in the light of technical difficulties and the complexity of the case.

According to section 16(1), an arbitrator's mandate terminates if they, after becoming unable to perform their functions in the manner described in the section, withdraw from their office or if the parties agree on the termination of their mandate. The arbitrator would be free from suit unless their act or omission is shown to have been made in bad faith.

A party who disagrees with the termination of the mandate of the arbitrator may, however, challenge the termination under section 16(2) of the 2005 Act by making an application to the High Court to decide on such termination. The decision of the High Court on this matter is non-appealable.

Section 16(3) states that if an arbitrator withdraws from their office for the reason listed in sections 16(1) and (2), this shall not imply that they accept the validity of those grounds. This provision facilitates the withdrawal of the arbitrator and avoids lengthy disagreements.

Challenge and removal

Grounds for challenge
It is unquestionable that an arbitrator must be independent and impartial. The impartiality and independence of the arbitrator comes into prominence in circumstances where the arbitrator has an interest in the outcome of the dispute.

1952 Act
The 1952 Act does not contain a specific requirement for disclosure, but it is advisable for arbitrators acting under the 1952 Act to disclose circumstances that may bring their impartiality or independence into question. The court may exercise its statutory authority to remove an arbitrator under section 25 of the 1952 Act if the arbitrator fails to be impartial.

2005 Act
Section 14 of the 2005 Act(7) provides that an arbitrator must be independent and impartial. Circumstances that will raise issues as to impartiality and independence include a personal, business or professional relationship with one party to a dispute or an interest in the outcome of the dispute.

Section 14(1) of the 2005 Act requires an arbitrator to disclose any circumstances likely to give rise to justifiable doubts as to their impartiality. "Justifiability" connotes that such doubts as to impartiality or independence must be sustainable upon judicial scrutiny.(8) This is a continuing duty from the time of appointment to the rendering of the award.

Where the impartiality or independence of an arbitrator is challenged or brought into question, the procedure to be followed is set out under section 15 of the 2005 Act. There is no equivalent provision in the 1952 Act. The procedure for challenge would normally also be drafted in the rules under which the parties have agreed to arbitrate. A party should exhaust those procedures before challenging the appointment of an arbitrator on grounds of the arbitrator's impartiality or independence in court. The normal grounds on which challenges are mounted are usually bias and conflict of interest. The test for bias is "real danger of bias".(9)

The applicable test in assessing an arbitrator's impartiality or independence include:

  • the "reasonable suspicion" test;
  • the "real likelihood" test; and
  • the "real danger of bias" test.

Regardless of the different tests employed, the existence of a "justifiable doubt" needs to be measured objectively, although it has been held that actual bias or partiality need not be established.(10) The "reasonable suspicion" test has been employed much more compared with the other two tests as it appears to be somewhat broader.(11)

Where a challenge under section 15 of the 2005 Act is unsuccessful, the challenging party may still apply to the High Court under order 69 of the Rules of Court 2012 to make a decision on the challenge within 30 days of having received notice of the decision rejecting the challenge. However, the courts have stressed that a party challenging an arbitrator cannot make an application to the court to disqualify an arbitrator without first challenging an arbitrator under section 15.(12)

Replacement of arbitrators
1952 Act
Under section 26(1) of the 1952 Act, the High Court may, on the application of any party to the arbitration agreement, appoint a person or persons to act as arbitrators in place of the person or persons who are removed by the High Court. Where the arbitrator removed is the sole arbitrator, or where the Court removes all the arbitrators who have been appointed, the Court may either appoint a sole arbitrator or order that the arbitration agreement ceases to have effect with respect to the dispute referred.

In theory, where an arbitrator is removed, the arbitration must begin completely afresh because the new arbitrator has a duty to deal with the whole dispute in all its aspects. However, the parties are free to agree on the question as to whether, after replacement, the new arbitrator should continue with the proceedings from the point in time where the mandate of the original arbitrator terminated or commence the proceedings afresh.

In practice, parties may agree to use the pleadings and discovery or even allow the new arbitrator to take over the reference at the point where their predecessor left off. If the arbitrator, either in accordance with the agreement of the parties or on their own discretion, decides that the hearing previously held may not be repeated, it would not be open to the party to question their decision.

2005 Act
Section 17 of the 2005 Act facilitates the appointment of a substitute arbitrator in the event that a member of the tribunal loses their mandate or has their mandate terminated in any other manner. It lists the situations in which a substitute arbitrator would be appointed, and the position of the arbitral proceedings where the arbitral tribunal has been reconstituted.

Section 17(1) provides that a substitute arbitrator shall be appointed in accordance with the provision of the 2005 Act in section 13. As a general provision, section 17(1) of the 2005 Act is stated more broadly than sections 15 and 16 of the 2005 Act. It envisages the situation where an arbitrator resigns at any point in time, without their mandate having been terminated in accordance with sections 15 and 16. Termination under section 15 is where an arbitrator is challenged and the arbitral tribunal supports the challenge, or they withdraw from their office voluntarily, or both parties agree on the challenge. Termination under section 16 concerns the case of an arbitrator's failure or impossibility to act and their mandate terminating upon withdrawal or upon the parties' agreement to terminate.

Section 17(2) deals with the effect the substitution of an arbitrator has on the proceedings – that is, whether they need to be repeated. This section, read together with section 21 of the 2005 Act, confirms that parties are free to determine the procedure to be followed in conducting the proceedings.

In the event the parties cannot agree, where the sole arbitrator or presiding arbitrator is replaced, Section 17(2)(a) provides that the substitute arbitrator will proceed afresh. In the case of other arbitrators being replaced, section 17(2)(b) provides that the arbitral tribunal has the discretion to decide whether to rehear the matter from the start.

Section 17(3) permits the parties to agree to rescind any order or ruling of the arbitral tribunal made prior to the replacement of the arbitrator. However, if the parties disagree, the parties and the reconstituted arbitral tribunal will have to abide by the previous orders or rulings passed by the predecessor arbitral tribunal. The section provides that such orders or rulings shall not be invalid solely on the ground that a substitute arbitrator has been appointed.

Emergency arbitrators

The AIAC Arbitration Rules 2018, which came into force on 9 March 2018, provided for the appointment of emergency arbitrators. The AIAC Arbitration Rules 2021 have since come into force as of 1 August 2021. Part 1, rule 17 and rule 18 of the AIAC Arbitration Rules 2021 now govern the procedure for the appointment of emergency arbitrators and the conduct of emergency arbitration proceedings. Part I, rule 16.2 of the AIAC Arbitration Rules 2021 allows parties to apply for emergency interim relief prior to the constitution of the arbitral tribunal. Where the arbitral tribunal is yet to be constituted and a party needs urgent interim measures, a party may submit a request to the director of the AIAC to appoint an emergency arbitrator pursuant to Part 1, rule 17 of the AIAC Rules 2021, to grant interim measures. The emergency arbitrator duly appointed would be empowered to determine all applications for emergency interim relief pending the constitution of a proper arbitral tribunal.(13) Emergency arbitrators are conferred generally wide powers to award any interim relief as is deemed necessary,(14) and any emergency interim relief so granted by the emergency arbitrator is to have the same effect as an award and would thus be binding on the parties. Such relief may only be ceased:

  • if an arbitral tribunal is not constituted within 90 days of the order;
  • upon the arbitral tribunal's final award; and
  • if the claim is subsequently withdrawn.

The powers of emergency arbitrators were similarly enlarged by virtue of the amendments made to section 19 of the 2005 Act since the coming into force of the Arbitration (Amendment) Act 2018 (No. 2).

Decisions of the emergency arbitrators are not subject to appeal, although modifications, variations or vacations may be made by the subsequent and properly established arbitral tribunal.

Subject to the renaming of the Regional Arbitration Centre for Kuala Lumpur to the AIAC, these rules remain in full force under section 3 of the Arbitration (Amendment) Act 2018 (No. 1).

For further information on this topic please contact Tan Sri Dato' Cecil Abraham, Dato' Sunil Abraham, Aniz Ahmad Amirudin or Syukran Syafiq at Cecil Abraham & Partners by telephone (+60 3 2726 3700) or email ([email protected], [email protected], [email protected] or [email protected]). The Cecil Abraham & Partners website can be accessed at


(1) For the first article in the series, see "Conducting arbitration in Malaysia: doctrine of separability, jurisdiction and arbitrability".

(2) For details of the current arbitration legislation in Malaysia, see "Introduction to arbitration in Malaysia: history and current legislation".

(3) [1999] 7 CLJ 514.

(4) [2014] 11 MLJ 761.

(5) [2020] 1 LNS 895.

(6) Fima Palmbulk Services Sdn Bhd v Suruhanjaya Pelabuhan Pulau Pinang [1988] 1 MLJ 269.

(7) In pari materia with article 12 of the Model Law.

(8) Page 130.

(9) MPPP v Syarikat Bekerjasama-sama Serbaguna Sungai Gelugor (1999) 3 MLJ 1.

(10) Country X v Company Q (Yearbook Commercial Arbitration), [XXII-1997] at pages 222-224.

(11) For the proper test on the appearance of bias, see Hock Hua Bank (Sabah) Bhd v Yong Link Thin & Ors [1995] 2 MLJ 213 at 226.

(12) Tan Sri Dato' Professor Dr Lim Kok Wing v Thurai Das a/l Thuraisingham & Anor [2011] 9 MLJ 640; Sebiro Holdings Sdn Bhd v Bhag Singh & Anor [2014] 11 MLJ 761.

(13) See rule 16 of the AIAC Rules 2021.

(14) Rule 16, rule 17 and rule 18 of the AIAC Rules 2021.