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      Question

      Under Section 12(3), on what grounds can a party challenge an arbitrator's impartiality or independence?

      A Any reason the challenging party considers appropriate Correct Answer Incorrect Answer
      B Only if the arbitrator has a direct financial interest in the outcome Correct Answer Incorrect Answer
      C Circumstances that give rise to justifiable doubts as to the arbitrator's independence or impartiality, or failure to possess agreed qualifications, as guided by Schedule V (IBA guidelines) Correct Answer Incorrect Answer
      D Only if the arbitrator has previously represented one party in unrelated matters Correct Answer Incorrect Answer
      E If the arbitrator is from a competing firm in the same industry Correct Answer Incorrect Answer

      Solution

      Explanation: Section 12(3) provides that an arbitrator may be challenged if "circumstances exist that give rise to justifiable doubts as to his independence or impartiality." The Explanation to Section 12 clarifies that these grounds are "guided by Schedule V" which incorporates the International Bar Association's (IBA) Guidelines on Conflicts of Interest in International Arbitration. This provides an objective standard rather than subjective preferences, ensuring consistency. Schedule V details specific situations (financial interests, past relationships, current advisorships) that may justify doubts.

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