2005 North Carolina Code - General Statutes § 1-567.42. Grounds for challenge.

§ 1‑567.42.  Grounds for challenge.

(a)       Except as otherwise provided in this Article, all persons whose names have been submitted for consideration for appointment or designation as arbitrators, or who have been appointed or designated as such, shall make a disclosure to the parties within 15 days of such submission, appointment, or designation of any information which might cause their impartiality to be questioned including, but not limited to, any of the following instances:

(1)       The person has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding;

(2)       The person served as a lawyer in the matter in controversy, or the person is or has been associated with another who has participated in the matter during such association, or has been a material witness concerning it;

(3)       The person served as an arbitrator in another proceeding involving one or more of the parties to the proceeding;

(4)       The person, individually or as a fiduciary, or such person's spouse or minor child residing in such person's household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;

(5)       The person, his or her spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person meets any of the following conditions:

a.         The person is or has been a party to the proceeding, or an officer, director, or trustee of a party;

b.         The person is acting or has acted as a lawyer in the proceeding;

c.         The person is known to have an interest that could be substantially affected by the outcome of the proceeding;

d.         The person is likely to be a material witness in the proceeding;

(6)       The person has a close personal or professional relationship with a person who meets any of the following conditions:

a.         The person is or has been a party to the proceeding, or an officer, director, or trustee of a party;

b.         The person is acting or has acted as a lawyer or representative in the proceeding;

c.         The person is or expects to be nominated as an arbitrator or conciliator in the proceeding;

d.         The person is known to have an interest that could be substantially affected by the outcome of the proceeding;

e.         The person is likely to be a material witness in the proceeding.

(b)       The obligation to disclose information set forth in subsection (a) of this section is mandatory and cannot be waived as to the parties with respect to persons serving either as sole arbitrator or as the chief or prevailing arbitrator.  The parties may otherwise agree to waive such disclosure.

(c)       From the time of appointment and throughout the arbitral proceedings, an arbitrator shall disclose to the parties without delay any circumstances referred to in subsection (a) of this section which were not previously disclosed.

(d)       Unless otherwise agreed by the parties or the rules governing the arbitration, an arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his or her independence or impartiality, or as to his or her possession of the qualifications upon which the parties have agreed.

(e)       A party may challenge an arbitrator appointed by it, or in whose appointment it has participated only for reasons of which it becomes aware after the appointment has been made. (1991, c. 292.)