Malaysian Arbitration Act to be amended in line with 2006 amendments to UNCITRAL Model Law on International Commercial Arbitration
27 April 2018
On 5 April 2018, Malaysia’s Dewan Negara (the Upper House of Parliament) passed the Arbitration (Amendment) (No 2) Bill 2018 (“Bill”). It was passed by the Dewan Rakyat (the Lower House of Parliament) on 3 April 2018. The Bill has yet to be assented to by the Yang-di Pertuan Agong and has not been gazetted into law.
The Bill amends the Malaysian Arbitration Act 2005 (“Act”) to enhance Malaysia’s profile as a safe seat and arbitration-friendly jurisdiction. The amendments are based on the 2006 amendments to the United Nations Commission on International Trade Law (“UNCITRAL”) Model Law on International Commercial Arbitration.
The Bill introduces the following key amendments:
- Introduction of a new section 3A which allows domestic and international parties to an arbitral proceeding freedom to choose and appoint any representative.
- The requirement for an arbitration agreement to be in writing will be broadened to cover content which is recorded in any form, or if it is contained in an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. This requirement will also be met by any electronic communications.
- The scope of interim measures will be widened to include any temporary measure, whether in the form of an award or in another form, including, restoring status quo pending determination of the dispute.
- New sections regulating preliminary orders and interim measures are introduced which deal with, among others, the application, conditions, modifications, suspensions, terminations and enforcement of an interim measure.
- The arbitral tribunal will decide a dispute in accordance with the rules of law as chosen by the parties to be applicable to the substance of the dispute. Malaysian laws will no longer be the default laws applicable for domestic arbitrations where the seat of arbitration is in Malaysia.
- Court proceedings under the Bill will be heard otherwise than in an open court, subject to certain exceptions. This will protect the confidentiality elements of an arbitration proceeding.
- Deletion of section 42 of the Act, which stipulates, among others, that any party may refer to the High Court any question of law arising out of an award, thereby narrowing the scope of recourse against an award.
- The arbitral tribunal will be able to award pre-award and post-award interest.