1. ADR
Question October 2010 Part C

2. Noor Nadiah Binti Zainol
Abidin
2011899794
Husna Binti Muhamad
Rodzi
2011634234
Farah Adibah Binti Azmi

3. October 2010
Part C
Question 1

4. O The easy Production System Sdn Bhd (hereinafter
referred to as “EPS”) bought a Group Personal Accident
Policy from Guarantee Insurance Sdn Bhd for all its
employees (hereinafter referred as “GI”) and paid a
premium of Rm2,000 per month. The insurance policy
covered the insured person named or referred to in the
specification of Insured Persons (Insured). The
Insurance policy, inter alia, was designed to cover the
insured’s death during the period of coverage and if
death or permanent disablement occurred, then in
either case, the insured’s estate or the insured was
entitled to a sum or RM120,000.

5. O However, the insurance policy would not cover
any death or disablement resulted directly or
indirectly from a suicide or attempted suicide.
On 23 February 2010 which was during the
period of coverage, one of EPS employees,
Barbara died. A death certificate was issued
by the government hospital and confirmed
that the cause of death as ‘pulmonary
aedema to acute drowning’. On 25 February
2010, EPS informed GI of the matter by a fax
message.

6. O EPS claimed that the death was an accident and thus
covered by the insurance policy. GI on the other hand said
that the death was caused by a suicide and thus was
outside the coverage of the insurance policy.
O Clause 10 of the insurance policy provides that”
O “All differences arising out of this policy shall be referred to
arbitration in accordance with the the Arbitration Act 2005.”
O EPS and GI seek your advice on the following:

7. a) What is the minimum and the maximum number or
arbitrators to be appointed?
(5 marks)

8. Answer:
O Section12 (1) of the Arbitration Act 2005 (AA), the
parties in dispute are free to determine the number of
the arbitrators.
O Usually in the arbitration agreement it includes a
reference to a single arbitrator
O Both parties to an agreement may each appoint an
arbitrator. or a third party to nominate one arbitrator
each.
O Section 12 of the AA provides that the High Court has
the power to appoint arbitrators.
O Section 12 (2) (a) and (b) if it is under the case of an
international arbitration, thus it needs to be consist of
three arbitrators and in the case of a domestic
arbitration, it shall consist of a single arbitrator.

9. O Section 13 of AA give power to the court to appoint
arbitrator under such circumstances
O under section 13(4) (a) (b) of AA where:
 a party fails to appoint an arbitrator within 30 days of
receipt or;
 the two arbitrator fail to agree on the third arbitrator
within 30 days of their appointment or such extended
period that agreed by both concerned parties.

10. O Thus, the minimum number of arbitrator is
one and the maximum number of arbitrators
is three or more than three in an odd
number as according to situations.

11. b) How to appoint the arbitrator/s?
(5 marks)

12. Answer:
O 3 ways :
O By agreement-Both parties consent
O High Court (section 13 of AA)
O KLRCA (section 13 of AA)

13. O Section 12 of the Arbitration Act 2005 (AA), the
parties in dispute are free to determine the number
of the arbitrators. Usually in the arbitration
agreement it includes a reference to a single
arbitrator, or both parties to an agreement may each
appoint an arbitrator. Sometimes the arbitrator in an
agreement may require a third party to nominate one
arbitrator each.
O section 12 (2) (a) and (b) if it is under the case of an
international arbitration, thus it needs to be consist of
three arbitrators and in the case of a domestic
arbitration, it shall consist of a single arbitrator.
O section 13 of the AA, that the High Court has the
power to appoint arbitrators.

14. O However, this is only come to an effect under certain
circumstances which are:
 the parties fail to agree on the appointment of a sole
arbitrator,
 if the appointed arbitrator refuses to act, or is incapable of
acting, or dies, and parties fail to appoint a replacement
 where the parties or two arbitrators are at the liberty to
appoint an umpire or third arbitrator and do no appoint
him
 where two arbitrator are required to appoint but do not
appoint him.
O The court may not intervene to appoint an arbitrator
which does not fall within the above section.

15. O If the agreement provides an appointment to be made
by the parties, then the parties are bounds by that
agreement.
O Case of Lim Su Sang v Teck Guan Construction &
Development Co. Ltd, where it was held that once the
Ltd
intention and consequent agreement to go to arbitration
are clear then in the absence of any appointment of an
arbitrator it would seem to be undoubtedly clear that
either the party is entitled to ask for an appointment by
the court.

16. O 3 arbitrators tribunal;
O Each party is to appoint one arbitrator each
and the two arbitrators were to appoint the
third arbitrator as the preceding arbitrator.
O If fails;
O Either party may apply to Director of KLRCA for
appointments.

17. O Single arbitrator
O Section 13(5) stated that where the parties
fail to agree on the procedure of the
proceeding or where the parties failed to
agree on the arbitrator, either party may
apply to the Director of KLRCA for the
appointment of arbitration.

18. O In appointing an arbitrator
O Director of KLRCA shall consider the
qualifications required of the arbitrator
by the agreement of the parties as well
as the other consideration that are likely
to secure the appointment of an independent
and impartial arbitrator.

19. PART C Q1(C)
GROUND FOR CHALLENGE
- Section 14 of Arbitration Act 2005
1.when there is an existence of circumstances that give rise
to that arbitrator’s impartiality or independence
(Sec 14(3)(a))
1.he does not possess qualifications that have been agreed
by the dispute parties (Sec 14(3)(b))

20. STEPS IN MAKING THE CHALLENGE
- Section 15 of Arbitration Act 2005
1. The party that intends to challenge the
arbitrator must send a written statement
about the reasons for the challenge(S.15(1))
2. the tribunal must make a decision about
the challenge unless the challenged
arbitrator withdraws from the office or the
other party agrees to the challenge the
decision does not have to be made(S.15(2))

21. 3. If the challenge is unsuccessful the challenging
party can apply to high court to make the
decision but only within 30 days after
receiving the notice of the decision on the
challenge (S.15(3))
4. While this happen the arbitral tribunal
together with the challenge arbitrator may
continue the arbitral proceedings and make
awards (S.15(4))

22. 5. no appeal can be apply upon the decision of
the High Court under subsection (3).
(S.15(4)).

23. Question D
O What are the processes involved in the
arbitral proceedings conducted by the
arbitrator/s?
(15 marks)

24. O Firstly is to appoint an arbitrator or
arbitrators. By three ways:
-by the parties
-by the third party
-by the court

25. Section 22
O (1) parties free to agree on the seat of
arbitration
O (2) if failed to comply with (1), the arbitral
tribunal will determine the seat of
arbitration.

26. O Then, holds a preliminary meeting to settle :
-matters of procedure
-dates of hearing
-inspection of relevant properties or papers
-discovery and inspection of documents
-etc..

27. Section 23
O unless otherwise agreed by the parties, the
arbitral proceedings in respect of a
particular dispute shall commence on the
date on which a request in writing for that
dispute to be referred to arbitration is
received by the respondent.

28. Section 21
O (1) parties are free to agree on the
procedure.
O (2) failed to comply with (1), the arbitral
tribunal will determine the procedure.

29. O Arbitrator may conduct the proceedings :
- in accordance with the arbitration
agreement.
- decided by him if there is not stated.
- generally follow the procedure of an
ordinary action in the courts.

30. Section 25
O (1) within a period of time agreed by parties,
the claimant shall state his facts to support
his claim, points at issue and the remedies
he sought.
O (3) either party may amend the claim or
defense during the course of arbitral
proceeding if both of them agreed to it.

31. Section 26
O (1) if both parties agreed, the tribunal will
decide whether to hold oral hearings or just
on the basis of documents.
O Both parties shall be given prior notice of
any hearing.
O (4) any documents, statements or any
information submitted by one party shall be
communicated to the other party.

32. Section 28
O Expert may be appointed by the arbitral
tribunal.
Section 29
O Parties may apply to High Court for the
assistance in taking evidence with the
approval of the tribunal.

33. Section 20
O Both parties shall be treated in equality and
be given a fair and reasonable oppurtunity
of presenting that party’s case.
Section 24
O Gives freedom to parties to choose and
agree on the language to be used in the
arbitral proceedings.