Non-Payment Of Arbitrator's Fees – Is The Arbitration Agreement Still Operative?

The cost of an arbitration, which includes the fees of an arbitrator, is usually negotiated and agreed upon between parties and the arbitral tribunal before or at the start of the proceedings. Subject to the applicable arbitral rules and procedures, parties are typically required to pay deposits of the arbitration cost at the early stages of an arbitration.

What happens if a party to an arbitration refuses to pay the arbitrator's fees or the deposit of the arbitration cost? Will such conduct render an arbitration agreement inoperative? This issue was considered by the High Court in the recent decision of JKP Sdn Bhd v Anas Construction Sdn Bhd.¹

Brief Facts

The Plaintiff engaged the Defendant as the main contractor for the construction of a building in Penang.