Arbitration in Malaysia
Arbitration is a popular alternative dispute resolution method in Malaysia. It is governed by the Malaysian Arbitration Act 2005 (Act 646) which is based on the UNCITRAL Model Law on International Commercial Arbitration.
Arbitration is commonly used in Malaysia to resolve disputes in various industries such as construction, engineering, oil and gas, and shipping. Parties may choose to refer their disputes to arbitration by including an arbitration clause in their contract or by agreeing to arbitrate after a dispute has arisen.
The Malaysian arbitration process is generally administered by arbitral institutions such as the Asian International Arbitration Centre (AIAC) or the Kuala Lumpur Regional Centre for Arbitration (KLRCA). These institutions provide facilities and support services for the arbitration process, including the appointment of arbitrators.
Arbitration awards in Malaysia are generally enforceable in the Malaysian courts and internationally under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Overall, arbitration in Malaysia provides parties with a flexible, efficient, and cost-effective means of resolving their disputes outside of the traditional court system.
The PAM Agreement refers to the standard form contracts published by the Pertubuhan Akitek Malaysia (PAM), which is the Malaysian Institute of Architects. These contracts are commonly used in the construction industry in Malaysia.
Arbitration can be used as a means of resolving disputes arising from a PAM Agreement. The PAM contracts have provisions for arbitration under the Malaysian Arbitration Act 2005 (Act 646) and the rules of the the Asian International Arbitration Centre (AIAC).
If the parties to a PAM Agreement have included an arbitration clause, any disputes arising from the contract will be referred to arbitration. The parties can agree on the number of arbitrators, the language of the arbitration, the place of arbitration, and the rules that will govern the arbitration process.
The arbitral tribunal will hear the dispute and make a final and binding decision known as an arbitration award. This award can be enforced in the Malaysian courts and internationally under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Overall, arbitration can provide a faster, more efficient, and cost-effective means of resolving disputes arising from PAM Agreements compared to traditional court proceedings.
How to start an Arbitration
Starting an arbitration typically involves the following steps:
(a) Check the contract
First, check whether the contract between the parties includes an arbitration clause. If it does, the parties must follow the procedures outlined in the clause to initiate the arbitration.
(b) Choose an arbitral institution
If the contract does not specify an arbitral institution, the parties must choose one. There are several reputable arbitral institutions in Malaysia, the Asian International Arbitration Centre (AIAC).
(c) Send a notice of arbitration
The party initiating the arbitration must send a written notice of arbitration to the other party or parties, stating the nature of the dispute and the relief sought. The notice should also include the name of the arbitrator or the proposed method of appointing the arbitrator.
(d) Appoint arbitrators
If the contract or the arbitral institution’s rules do not provide for the appointment of arbitrators, the parties must agree on a method for selecting the arbitrator or arbitrators. If they cannot agree, the arbitral institution will appoint an arbitrator or arbitrators.
(e) File a statement of claim
The party initiating the arbitration must file a statement of claim with the arbitral institution, detailing the facts and legal arguments supporting their case.
(f) Respond to the statement of claim
The other party or parties must respond to the statement of claim by filing a statement of defense, which should address the issues raised in the statement of claim.
(g) Attend the hearing
The arbitral tribunal will hold a hearing to allow the parties to present their evidence and arguments. The parties may also submit written evidence and legal briefs.
(h) Receive the arbitration award
After considering the evidence and arguments, the arbitral tribunal will issue an award, which is final and binding on the parties.
Overall, the process of starting an arbitration in Malaysia involves following the procedures outlined in the contract or the rules of the chosen arbitral institution, filing the necessary documents, and attending the hearing to present evidence and arguments
Written by Lawyer Khoo