I found 2 problems, with LSB compilant of initscript of arpwatch.
It should be based on 
https://fedoraproject.org/wiki/Packaging/SysVInitScript definition
test srcipt is situated on wiki pages:
https://wiki.test.redhat.com/BaseOs/Projects/InitScripts#testscript

see failing message in LOG:
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
:: [   LOG    ] :: Test                                                         
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

:: [   LOG    ] :: >>>>>>>>> service start
:: [   PASS   ] ::  Service must start without problem
:: [   PASS   ] ::  Then Status command               
:: [   PASS   ] ::  Already started service           
:: [   PASS   ] ::  Again status command              
:: [   LOG    ] :: >>>>>>>>> service restart          
:: [   PASS   ] ::  Restarting of service             
:: [   PASS   ] ::  Status command                    
:: [   LOG    ] :: >>>>>>>>> service stop             
:: [   PASS   ] ::  Stopping service                  
:: [   PASS   ] ::  Status of stopped service         
:: [   PASS   ] ::  Stopping service again            
:: [   PASS   ] ::  Status of stopped service         
:: [   LOG    ] :: >>>>>>>>> pid file                 
:: [   PASS   ] :: File /var/run/gpsd.pid should exist
:: [   PASS   ] :: Running 'echo 666666 > /var/run/gpsd.pid'
:: [   PASS   ] ::  Existing pid file, but service not started 
:: [   LOG    ] :: >>>>>>>>> lock file                         
:: [   PASS   ] :: File /var/lock/subsys/gpsd should exist     
:: [   PASS   ] :: Running 'touch /var/lock/subsys/gpsd'       
:: [   PASS   ] ::  Existing lock file, but service not started 
:: [   LOG    ] :: >>>>>>>>> insufficient rights                
:: [   PASS   ] ::  Starting service for restarting under nonpriv user 
:: [   FAIL   ] :: Insufficient rights, restarting resrvice under nonprivileged user must fail (Expected 4, got 0)
:: [   LOG    ] :: >>>>>>>>> operations
:: [   PASS   ] ::  Service have to implement start function
:: [   PASS   ] ::  Service have to implement restart function
:: [   PASS   ] ::  Service have to implement status function
:: [   PASS   ] ::  Service have to implement usage function
:: [   PASS   ] ::  Service have to implement condrestart function
:: [   PASS   ] ::  Service have to implement try-restart function
:: [   PASS   ] ::  Service have to implement reload function
:: [   PASS   ] ::  Service have to implement force-reload function
:: [   LOG    ] :: >>>>>>>>> nonexist operations
:: [   PASS   ] ::  Testing proper return code when nonexisting function
:: [   LOG    ] :: >>>>>>>>> invalid arguments
:: [   PASS   ] ::  When no arguments added to service, it must fail with proper return code
:: [   LOG    ] :: Duration: 47s
:: [   LOG    ] :: Assertions: 27 good, 1 bad
:: [   FAIL   ] :: RESULT: Test

So, there is only one issue, what should be fixed ( when working under nonprivileged user it should return code 4