International Commercial Arbitration at Malaysia
Sure! Here’s a detailed overview of International Commercial Arbitration in Malaysia — one of Asia’s leading arbitration hubs:
International Commercial Arbitration in Malaysia
1. Legal Framework
a. Arbitration Act 2005
Malaysia’s arbitration is governed by the Arbitration Act 2005 (Act 646).
The Act is largely based on the UNCITRAL Model Law on International Commercial Arbitration (1985, with 2006 amendments).
It applies to both domestic and international commercial arbitration.
The law emphasizes party autonomy, limited court intervention, and recognition/enforcement of arbitral awards.
b. International Treaties
Malaysia is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) since 1985.
Malaysia also recognizes awards made under the Geneva Protocol (1924) and Geneva Convention (1927).
Enforcement of awards is streamlined under these treaties.
2. Arbitration Institutions in Malaysia
a. Kuala Lumpur Regional Centre for Arbitration (KLRCA) / Asian International Arbitration Centre (AIAC)
Formerly known as KLRCA, the institution was rebranded as AIAC in 2018.
It is Malaysia’s premier arbitration institution, offering administrative support, arbitration rules, and a panel of qualified arbitrators.
AIAC is recognized as a regional hub for arbitration in Asia.
It offers a variety of dispute resolution services: arbitration, mediation, adjudication, etc.
b. Other Institutions
Parties can also use international bodies like:
ICC (International Chamber of Commerce)
SIAC (Singapore International Arbitration Centre)
HKIAC (Hong Kong International Arbitration Centre)
3. Key Features
Party Autonomy: Parties can choose arbitrators, governing law, language, and procedural rules.
Flexibility: The law supports different types of arbitration, including expedited procedures.
Confidentiality: Proceedings are private, which is preferred in commercial disputes.
Judicial Support: Malaysian courts provide strong support for arbitration, minimizing interference except in limited grounds.
Enforceability: Awards (both domestic and foreign) are enforceable under the Arbitration Act and the New York Convention.
4. Enforcement of Arbitral Awards
Malaysian courts enforce both domestic and foreign awards efficiently.
Grounds for refusal are consistent with the New York Convention — mainly public policy and procedural irregularities.
Malaysia’s pro-arbitration judicial stance helps reduce delays in enforcement.
5. Advantages of Malaysia as Arbitration Seat
Strategic Location: At the heart of ASEAN and close to major Asian markets.
Multilingual Environment: English is widely used in arbitration and legal proceedings.
Developed Legal System: Malaysia’s common law system is familiar to international businesses.
Government Support: The government actively promotes Malaysia as a dispute resolution hub.
Cost-effective: Arbitration costs and living costs are relatively affordable compared to other hubs like Singapore or Hong Kong.
Summary
Malaysia offers a robust and internationally aligned arbitration framework with an established arbitration institution (AIAC), strong court support, and convenient geographic and linguistic advantages. This makes Malaysia one of the preferred venues for international commercial arbitration in Asia.
RELATED Blog
0 comments