What You Should Know About Arbitration In Malaysia

International Commercial Arbitration

There are many court proceedings happening every day of the year. Either about businesses, real estates or marital problems, but they all involve in trying to resolve conflicts between two or more people. However, these proceedings inside the courtroom takes a lot of time and cost more than necessary. Hence, many opt for alternative dispute resolution, which also known as arbitration. There are many types of it, from the basic, to international commercial arbitration.

Though many of us have a basic understanding of what court procedures entail, few are familiar with the alternative dispute resolution method known as “arbitration.” While arbitration has the same goal as judicial proceedings (resolving a dispute), it is a private procedure that is conducted without the presence of a judge and can also be completed in your workplace conference room. Here are five things to know about Malaysian arbitration.

There will be no judge, only an arbitrator.

An arbitrator is the person who oversees a dispute resolution process. The arbitral tribunal can be made up of a single arbitrator or an odd number of arbitrators, such as three or five arbitrators, depending on the arbitration agreement or rules of arbitration.

An arbitrator does not have to be a lawyer, a judge, or someone with legal training. Parties are able to stipulate the skills and competence necessary — for example, in a development dispute, parties may agree that any arbitrator selected must have engineering credentials or a certain number of years of construction business experience. This is in contrast to court processes, where the judge hearing your case is chosen at random, and you are unable to pick or enforce pre-conditions on the judge’s credentials. If the parties cannot agree on an arbitrator, the arbitrator can be appointed by an impartial third party.

International Commercial Arbitration

Arbitration proceedings are kept private.

Court procedures can be made public: certain court judgements are published, court records can be accessed by the public via an online file search, and trials are typically held in “open court” (which means any member of the public can observe the proceedings). Arbitration, on the other hand, is a private procedure involving just the parties involved. To that end, the Malaysian Arbitration Act 2005 was recently amended to provide that, unless the parties otherwise agree, no party may publish, disclose, or communicate any information relating to the arbitration proceedings or an award made in those arbitral proceedings, unless the parties agree otherwise.

An arbitral award is binding and essentially identical to a court decision.

An “award” refers to the arbitral tribunal’s ruling on the merits of the claim. An arbitral award is final and binding on the parties, and it can only be overturned in rare cases (e.g.: if the award was obtained via fraud). Once registered with the High Court, an arbitration award (even if acquired outside of Malaysia) can be enforced like a court decision. An arbitral award made in Malaysia may be enforced in other countries in specific situations.

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