In practice, the application of the IBA`s Conflict of Interest Guidelines, which require all arbitrators to be free from prejudice, is pervasive in Malaysia. There are specific declaration forms issued by Pertubuhan Arkitek Malaysia (“PAM”), the Malaysian Institute of Architects and AIAC, which must be signed by each arbitrator before confirming their appointment. In Malaysia, experienced arbitrators involved in domestic and international arbitration are familiar with these guidelines. AIAC statistics show that the majority of arbitrations registered in 2020-2021 concern works contracts. This is largely in line with the trend of previous years. AIAC also offers niche arbitration rules such as the AIAC Arbitration Rules i and the AIAC Expedited Arbitration Rules. Arbitration Rules i were introduced in 2012 and were intended for both Islamic and non-Islamic parties to settle a Sharia claim regarding commercial transactions. As such, it proposes a set of Sharia complaint rules that include a procedure for referring matters to a Sharia advisory board or Sharia expert. Over the past 10 years, key stakeholders have made concerted efforts to promote Malaysia as the seat of arbitration.

The efforts have been fruitful: today, Malaysia is widely recognized as a favorable destination for arbitration. A comprehensive legal framework governing arbitration laws in Malaysia under the Malaysian Arbitration Act 2005 (Act 2005) and an impartial, efficient and pro-arbitration judicial system have contributed significantly to this. No specific words or forms are required to form an arbitration clause or arbitration agreement; an electronic transmission relating to or involving the parties` intention to submit to arbitration is sufficient, provided that there is an agreement to submit the disputes to arbitration and that the intention of the parties to conduct the arbitration is clear and unambiguous (see the decision of the Malaysian Court of Appeal in Albilt Resources Sdn Bhd v Casaria Construction Sdn Bhd [2010] 3 MLJ 656). (5) A reference in an agreement to a document containing an arbitration clause constitutes an arbitration agreement, provided that the agreement is in writing and that the reference is capable of incorporating that clause into the agreement. [1] Part III also contains provisions relating to the costs and expenses of the arbitration, the extension of the time limit for initiating arbitration and the extension of the time limit for granting the award. Malaysia signed the New York Convention on 5 November 1985. Therefore, an arbitral award of Malaysia is enforceable in more than 161 countries that are parties to the New York Convention.4 With respect to foreign arbitral awards whose seat of arbitration is located in those 161 countries, section 38 of the Act permits the recognition and enforcement of such foreign arbitral awards in Malaysia, including an arbitral award in an international arbitration based in Malaysia. The Kuala Lumpur Regional Arbitration Centre (“KLRCA”) was established in 1978 by the Asia-Africa Legal Consultative Organization. In 2018, the Arbitration Act was amended to facilitate the renaming of KLRCA to the Asian International Arbitration Center (“AIAC”), in line with the Malaysian government`s efforts to make Kuala Lumpur an international arbitration center. Klrca`s “rebranding” in AIAC has already led to a significant number of new cases (see CIPAA 2018 statistical report). The AIAC Rules, a modern arbitration rule largely based on the UNCITRAL Arbitration Rules, were revised in 2018.

The most significant changes include provisions on the consolidation of proceedings, the technical control of arbitral awards and the possibility for third parties to join them. In addition, AIAC also provides for AIAC expedited arbitration rules with much shorter timelines that may apply if the parties agree. A party wishing to enforce an arbitral award may file an application with the High Court of Malaysia. Upon such request, the award shall be accepted as binding and enforced by submission as a judgment in respect of the award. The award to be enforced may be made in respect of the arbitration if the seat of the arbitration is in Malaysia or in a foreign State. With regard to the issue of costs and damages, Article 19G provides that the party seeking an interim measure or an injunction is liable for all costs and damages suffered. Sections 19H and 19I of the Act deal with the recognition and enforcement of interim measures that involve the application of Section 39 of the Act on the Recognition and Enforcement of an Arbitral Award. Section 19J provides that the High Court has the power to issue an interim measure in matters of arbitration, whether or not the seat of arbitration is in Malaysia.

AIAC maintains its own arbitration rules, known as the AIAC Arbitration Rules. In addition, AIAC is actively taking the lead in modernizing the AIAC Arbitration Rules in line with international trends in alternative dispute resolution procedures to compete with the best arbitration institutions in Asia, thus contributing to its popularity in Malaysia. Unlike court proceedings, arbitration is often considered less formal due to the concept of party autonomy described above. The parties do not have to deal with the formalities and formalities of a court case (e.B the etiquette in the courtroom). The place of arbitration may take place anywhere – e.B. in a party`s office or in a rented meeting room such as a hotel or the premises of the Asian International Arbitration Centre (AIAC). Effective March 9, 2018, AIAC will apply the 2018 AIAC Arbitration Rules (“AIAC Arbitration Rules”) as arbitration rules. The content of the 2018 AIAC Arbitration Rules is the same as that of the KLRCA Rules (as revised in 2017), and both sets of rules adopt the UNCITRAL Arbitration Rules in the revised 2013 version with some modifications. Similarly, other existing rules, such as the KLRCA i-Arbitration Rules and the KLRCA Expedited Arbitration Rules, which were introduced to meet the growing demands of the global business community, were renamed “AIAC i-Arbitration Rules 2018” and “AIAC Fast Track Arbitration Rules” in 2018. The AIAC Arbitration Rules i 2018 govern the settlement of disputes arising from commercial transactions based on Islamic principles, while the AIAC Expedited Arbitration Rules are designed for parties who wish to obtain an arbitral award in the fastest manner with minimal costs.7 Although most of us have a rough idea of what court proceedings are, few people are aware of an alternative dispute resolution procedure, known as “arbitration”.

While arbitration has the same purpose as a court case (i.e., the purpose is to resolve a dispute), arbitration is a private trial that takes place without a judge and can even be completed in your office`s meeting room. Here are five things you need to know about arbitration in Malaysia: (3) Nothing in this Act affects proceedings related to arbitration proceedings commenced before the courts before the effective date of this Act. (i) the subject matter of the dispute cannot be resolved by arbitration under Malaysian law; or In the absence of an agreement between the parties or the adoption of arbitration rules in the arbitration agreement with respect to procedures for the application of interim measures, it is for the arbitral tribunal to determine those procedures. The arbitral tribunal shall apply the conditions set out in articles 19A and 19B of the Act when considering an application for interim or interim orders. Even if the parties opt for ad hoc arbitration, the arbitration clause must still be properly formulated. There are obvious dangers if the arbitration clause is not properly worded. In the worst case, the clause renders the award unenforceable, or the clause may be declared null and void.[11] Although both provisions provide for the duty of confidentiality and its exceptions, any document filed with the courts is generally considered a public document, and the confidentiality of the arbitration may be compromised in the event of a challenge to the award and arbitration documents submitted to the High Court. However, the Court of Appeal warned that even if a conflict with public policy is established, the power of the courts to set aside an arbitral award under article 37 remains discretionary […].