{"id":154168,"date":"2026-11-04T11:02:09","date_gmt":"2026-11-04T11:02:09","guid":{"rendered":"https:\/\/www.legal500.com\/guides\/?post_type=comparative_guide&#038;p=154168"},"modified":"2026-11-04T12:23:29","modified_gmt":"2026-11-04T12:23:29","slug":"malaysia-international-arbitration","status":"publish","type":"comparative_guide","link":"https:\/\/www.legal500.com\/guides\/chapter\/malaysia-international-arbitration\/","title":{"rendered":"Malaysia: International Arbitration"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-154168","comparative_guide","type-comparative_guide","status-publish","hentry","guides-international-arbitration","jurisdictions-malaysia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Shearn Delamore &amp; Co<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/07\/ShearnDelamore_Original-2.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Shearn Delamore &amp; Co<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/07\/ShearnDelamore_Original-2.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of International Arbitration laws and regulations applicable in Malaysia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What legislation applies to arbitration in your country? Are there any mandatory laws?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Arbitration Act 2005 (\u201c<strong>AA 2005<\/strong>\u201d) applies to arbitrations seated in Malaysia. The Act applies to both domestic and international arbitration seated in Malaysia.<\/p>\n<p>The mandatory provisions include those preserving the parties\u2019 right to equal treatment (Section 20), competence-competence (Section 18), limited judicial intervention (Section 8), and automatic stay of court proceedings (Section 10).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your country a signatory to the New York Convention? Are there any reservations to the general obligations of the Convention?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Malaysia acceded to the 1958 New York Convention and implements it through Sections 38 and 39 AA 2005.<\/p>\n<p>Malaysia maintains the \u201creciprocity\u201d and \u201ccommercial\u201d reservations: the Convention applies only to awards made in the territory of another contracting state and to differences arising out of legal relationships considered commercial under Malaysian law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What other arbitration-related treaties and conventions is your country a party to?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Malaysia is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965 (\u201c<strong>ICSID Convention<\/strong>\u201d), implemented via the Convention on the Settlement of Investment Disputes Act 1966 (\u201c<strong>ICSID Act<\/strong>\u201d).<\/p>\n<p>Malaysia is also a party to many Bilateral Investment Treaties (\u201c<strong>BIT<\/strong>\u201d) with various countries, which include provisions for the protection of foreign investments and provide for investor-state dispute settlement (ISDS) mechanisms.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the law governing international arbitration in your country based on the UNCITRAL Model Law? Are there significant differences between the two? Are there any impending plans to reform the arbitration laws in your country? Has your jurisdiction adopted, or is it considering adopting, the amendments of 6 July 2026 regarding electronic awards and communications?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The AA 2005 substantially incorporates the UNCITRAL Model Law, including: &#8211;<\/p>\n<p style=\"padding-left: 40px\">(a) dual-track structure distinguishing domestic and international arbitration;<\/p>\n<p style=\"padding-left: 40px\">(b) express kompetenz-kompetenz (Section 18), limited judicial intervention; and<\/p>\n<p style=\"padding-left: 40px\">(c) statutory confidentiality provisions (Sections 41A \u2013 41J).<\/p>\n<p>The Arbitration (Amendment) Act 2024 (\u201cAmendment Act\u201d) came into force on 1 January 2026. It, among other things: &#8211;<\/p>\n<p style=\"padding-left: 40px\">(a) introduced a statutory third-party funding regime (new Sections 46A \u2013 46I);<\/p>\n<p style=\"padding-left: 40px\">(b) re-framed recognition by providing automatic binding effect of awards with consequential procedural changes to enforcement;<\/p>\n<p style=\"padding-left: 40px\">(c) introduced Section 9A, under which the parties may choose the law applicable to the arbitration agreement and, absent a choice, the law of the seat applies;<\/p>\n<p style=\"padding-left: 40px\">(d) expressly recognised digital and electronic signatures on awards; and<\/p>\n<p style=\"padding-left: 40px\">(e) reflected the Asian International Arbitration Centre (\u201cAIAC\u201d) restructuring (creation of the AIAC Court of Arbitration (\u201cAIAC Court\u201d) and the President replacing the \u201cDirector\u201d in appointment functions).<\/p>\n<p>Malaysia has not adopted the UNCITRAL amendments and recommendations of 6 July 2026 concerning electronic awards and electronic communications. Malaysian law is nevertheless already aligned with important aspects of those reforms: Section 33 expressly recognises awards bearing digital or electronic signatures, and the AIAC Arbitration Rules 2026 facilitate electronic communications and digitally signed institutional decisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What arbitral institutions (if any) exist in your country? When were their rules last amended? Are any amendments being considered?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The main arbitral institution in Malaysia is the AIAC. The AIAC Arbitration Rules 2026 (effective 1 January 2026) (\u201cAIAC Rules 2026\u201d) replaced the AIAC Arbitration Rules 2023.<\/p>\n<p>Key changes include: &#8211;<\/p>\n<p style=\"padding-left: 40px\">(a) the establishment of AIAC Court and the position of President.<\/p>\n<p style=\"padding-left: 40px\">(b) mandatory disclosure of existence and identity of any third-party funder (Rules 5.1(f), 6.1(d), 31).<\/p>\n<p style=\"padding-left: 40px\">(c) procedures for summary determination (Rule 9) and emergency arbitration (Rules 12 to 14).<\/p>\n<p style=\"padding-left: 40px\">(d) enhanced fast-track procedure (Rule 7).<\/p>\n<p style=\"padding-left: 40px\">(e) expanded joinder and consolidation provisions (Rules 8 and 10).<\/p>\n<p style=\"padding-left: 40px\">(f) remote participation and electronic service of documents (Rule 37).<\/p>\n<p style=\"padding-left: 40px\">(g) hybrid procedure integrating mediation within arbitration (Rule 49).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a specialist arbitration court in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. Arbitration-related applications are heard by the High Court (Commercial Division) and appeals from a High Court decision on an arbitration related matter are heard by the Court of Appeal and thereafter there is a final right of appeal by leave to the Federal Court, which is the apex court.<\/p>\n<p>The AIAC Court performs supervisory and administrative functions, but it is not a judicial body and does not exercise adjudicatory powers.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the validity requirements for an arbitration agreement under the laws of your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 9 AA 2005, an arbitration agreement must: &#8211;<\/p>\n<ul>\n<li>Identify a defined legal relationship;<\/li>\n<li>Be in writing, including by exchange of letters, emails, or other electronic communications; and<\/li>\n<li>Provide for arbitration as a method of dispute resolution.<\/li>\n<\/ul>\n<p>An arbitration agreement can also satisfy the writing requirement where one party asserts its existence in an exchange of statements of claim and defence, or other documents, and the other party does not deny it (Section 9(4)(b), as amended in 2024).<\/p>\n<p>The parties also need not reproduce the arbitration clause in the document they sign. Under Section 9(5), they may refer to another document containing that clause, provided the reference makes the clause part of their agreement.<\/p>\n<p>In <em>Ajwa for Food Industries Co (MIGOP), Egypt v Pacific Inter-Link Sdn Bhd<\/em> [2013] 5 MLJ 625, the Federal Court held that the reference need not specifically mention the arbitration clause. The Court of Appeal applied that principle in <em>Apex Communications Sdn Bhd v Sumber Khazanah Sdn Bhd (in liquidation) and another appeal<\/em> [2026] 3 MLJ 152. In this case, a downstream subcontractor had undertaken to comply with \u201call terms and conditions\u201d of an earlier subcontract. As those terms included an arbitration clause, the downstream subcontractor was held to be bound by the arbitration clause even though its appointment did not separately name, identify or refer to the clause.<\/p>\n<p>In <em>Setia Awan Management Sdn Bhd v SPNB Aspirasi Sdn Bhd<\/em> [2025] 4 MLJ 181, the Court of Appeal confirmed that even where a clause contains permissive wording and provides that disputes \u201cmay be referred to arbitration\u201d, the agreement remains binding once a party elects arbitration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are arbitration clauses considered separable from the main contract?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Section 18(2) AA 2005 recognises that an arbitration clause is independent of the underlying contract. Even if the main contract is invalid, terminated, or rescinded, the arbitration clause survives unless the clause itself is specifically challenged. (see <em>Gise Kam Kwan International Trade Ltd v Antara Steel Mills Sdn Bhd<\/em> [2024] 6 MLJ 662 and <em>Peninsula Education (Setia Alam) Sdn Bhd v Biaxis (M) Sdn Bhd (in liquidation)<\/em> [2024] 5 MLJ 388).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do the courts of your country apply a validation principle under which an arbitration agreement should be considered valid and enforceable if it would be so considered under at least one of the national laws potentially applicable to it?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No reported Malaysian decision has adopted a free-standing \u201cvalidation principle\u201d requiring the court to select whichever potentially applicable law would validate the arbitration agreement.<\/p>\n<p>The position is now governed by Section 9A of the Arbitration Act 2005. Parties may expressly agree on the law applicable to the arbitration agreement. In the absence of such an agreement, the law of the seat applies. An agreement on the law governing the main contract does not, by itself, constitute an express choice of law for the arbitration agreement. This statutory rule is deterministic rather than a validation principle.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are asymmetric arbitration clauses \u2013 for instance, where one party has the right to choose between arbitration or litigation while the other party does not have this option \u2013 valid in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. In <em>Majlis Perbandaran Seremban v Maraputra Sdn Bhd<\/em> [2004] 5 MLJ 469, the High Court held that clauses granting only one party the right to refer disputes to arbitration \u201care not unusual and are valid and binding.\u201d<\/p>\n<p>In <em>Setia Awan Management<\/em> (<em>supra<\/em>), the Court of Appeal, referring to a Singapore Court of Appeal decision in <em>Wilson Taylor Asia Pacific Pte Ltd v Dyna-Jet Pte Ltd<\/em> [2017] SGCA 32, confirmed that unilateral or one-way arbitration agreements are enforceable under Malaysian law.<\/p>\n<p>The determinative test is whether there exists a valid arbitration agreement that is not null, void, inoperative, or incapable of performance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In what instances can third parties or non-signatories be bound by an arbitration agreement? Are there any recent court decisions on these issues?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A person is not bound by an arbitration agreement that he\/it is not a signatory to merely because the person is involved in the same dispute as the signatories to an arbitration agreement.<\/p>\n<p>In <em>Jaya Sudhir a\/l Jayaram v Nautical Supreme Sdn Bhd &amp; Ors<\/em> [2019] 5 MLJ 1, the Federal Court held that the AA 2005 does not apply to non-parties, and a non-party seeking to restrain arbitration must show that there is a serious issue to be tried, damages would not be an adequate remedy, and the balance of convenience favours an injunction (see <em>Keet Gerald v Mohd Noor <\/em>[1995] 1 MLJ 193).<\/p>\n<p>A non-signatory may, however, be bound where the contractual arrangements and its conduct establish that it had assumed the relevant obligations or had intended to be bound. In <em>PT Wijaya Karya (Persero) TBK &amp; Anor v Zecon Bhd &amp; Anor<\/em> [2025] 6 MLJ 867, the Court of Appeal recognised the \u201cgroup of companies\u201d doctrine. On the facts, two principal companies had each appointed a related company as agent; the principals\u2019 conduct showed consent to assigning their contractual obligations to those agents. All four companies could therefore participate in the same arbitration. Corporate affiliation alone was not the basis for the result.<\/p>\n<p>See also <em>Apex Communications<\/em> (<em>supra<\/em>). The third-layer subcontractor\u2019s position was assigned to Sumber Khazanah. Separately, Sumber Khazanah undertook to comply with all terms of the earlier subcontract, including its arbitration clause. It was therefore bound by that clause even though its appointment did not identify the clause.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any recent court decisions and\/or legislative reform in your country concerning the choice of law applicable to an arbitration agreement where no such law has been specified by the Parties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In <em>Thai-Lao Lignite Co Ltd &amp; Anor v Government of The Lao People\u2019s Democratic Republic<\/em> [2017] 9 CLJ 273, the Federal Court held that where the seat of arbitration is Malaysia, Malaysian law governs the arbitration agreement, absent an express or implied choice to the contrary.<\/p>\n<p>For arbitration agreements made from 1 January 2026, the new section 9A of the AA 2005 supplies an express rule: the parties may choose the law governing their arbitration agreement; if they do not, the law of the seat applies. A choice of law for the main contract does not, by itself, amount to an express choice of law for its arbitration clause. The amendment operates prospectively and expressly preserves the application of the pre-amendment law to arbitration agreements made before the amendment came into force.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the law applicable to the substance determined? Is there a specific set of choice of law rules in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The applicable substantive law is governed by Section 30 AA 2005.<\/p>\n<p>The tribunal applies the rules of law chosen by the parties. If they have made no choice, section 30(4) directs the tribunal to apply the law determined by the conflict of laws rules that it considers applicable.<\/p>\n<p>Malaysian conflict of laws principles, as outlined in <em>James Capel (Far East) Ltd v YK Fung Securities Sdn Bhd<\/em> [1996] 2 MLJ 97, consider an express choice, then an implied choice, and, failing either, the law with the closest and most real connection to the transaction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In your country, are there any particular requirements for and\/or restrictions in the appointment of arbitrators?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Sections 12 and 13 AA 2005, parties are free to agree on the number, qualifications, and procedure for appointment. Arbitrators must be independent and impartial and satisfy any agreed qualifications. There are no restrictions on nationality, residence, or profession. If the parties have not chosen the number, the statutory default is three arbitrators for an international arbitration and one for a domestic arbitration.<\/p>\n<p>The new Section 13(3A) provides that, in a three-member tribunal with multiple claimants or respondents, the claimants jointly appoint one arbitrator and the respondents jointly appoint one.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can the local courts intervene in the selection of arbitrators? If so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, but only after the statutory route is exhausted. Under Section 13(4) to (7) of the AA 2005, the statutory appointment route generally goes to the President of the AIAC Court of Arbitration first.<\/p>\n<p>Where the default appointment mechanism or an agreed appointment procedure fails, a party may seek the President\u2019s assistance under Section 13(4) to (6). Under section 13(7), a party may apply to the High Court if the President is unable to act or fails to act within 30 days of the request.<\/p>\n<p>Sections 15 to 17 separately address challenges, termination of an arbitrator\u2019s mandate and replacement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can the appointment of an arbitrator be challenged? What are the grounds for such a challenge? What is the procedure for such a challenge?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under Sections 14 and 15 AA 2005, an arbitrator may be challenged for justifiable doubts as to independence or impartiality, or if lacking agreed qualifications. The challenge must be made in writing within 15 days of learning the relevant facts.<\/p>\n<p>Unless otherwise agreed, the arbitral tribunal decides the challenge. If rejected, the challenging party may apply to the High Court within 30 days, and the arbitration may proceed pending that decision. The Court\u2019s determination is final.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any recent developments concerning the duty of independence and impartiality of the arbitrators, including the duty of disclosure?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In <em>MMC Engineering Group Bhd &amp; Anor v Wayss &amp; Freytag (M) Sdn Bhd &amp; Anor<\/em> [2015] MLJU 477, the High Court held that an allegation of bias must concern the particular arbitration; conduct in unrelated matters was insufficient.<\/p>\n<p>In <em>Persatuan Kanak-Kanak Spastik Selangor &amp; Wilayah Persekutuan v Low Koh Hwa @ Low Kok Hwa<\/em> [2023] 1 MLJ 342, the arbitrator disclosed that he knew a representative and witness of one of the parties. The Court of Appeal held that the other party, having continued with the arbitration without challenging the arbitrator within the 15-day period under Section 15(1), could not raise the alleged bias only after receiving an award unfavourable to it.<\/p>\n<p>More recently, the Malaysian Court of Appeal decision in <em>ZMSB v PSB<\/em> [2025] 1 MLJ 120 (CA) reinforced the need to object to an arbitrator\u2019s appointment within the applicable time, rather than reserving the point until after the award. These cases should be read alongside the arbitrator\u2019s continuing disclosure duty under section 14 and the 15-day default challenge period under section 15.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are arbitrators immune from liability?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Section 47 AA 2005 provides that an arbitrator is not liable for any act or omission done in the discharge of their functions unless shown to be in bad faith.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the principle of competence-competence recognized in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Section 18(1) AA 2005 empowers a tribunal to rule on its own jurisdiction, including the existence, validity and scope of the arbitration agreement. (see <em>Press Metal Sarawak Sdn Bhd v Etiqa Takaful Bhd<\/em> [2016] 5 MLJ 417 and <em>TNB Fuel Services Sdn Bhd v China National Coal Group Corp<\/em> [2013] 4 MLJ 857).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the approach of local courts towards a party commencing litigation in apparent breach of an arbitration agreement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 10 AA 2005, courts must stay court proceedings that are subject to an arbitration agreement unless the applicant has taken steps in the proceedings to defend the proceedings or the agreement is null, void, inoperative, or incapable of performance. (see Press Metal Sarawak (supra), <em>Tindak Murni Sdn Bhd v Juang Setia Sdn Bhd and another appeal\u00a0<\/em><a href=\"https:\/\/plus.lexis.com\/apac\/document\/teaserdocument\/?pdmfid=1539268&amp;crid=e19c6c4b-97ee-4653-b491-293620fc4405&amp;pddocfullpath=%2Fshared%2Fdocument%2Fcases-my%2Furn%3AcontentItem%3A65TH-RT51-JBT7-X1Y6-00000-00&amp;pddocid=urn%3AcontentItem%3A65TH-RT51-JBT7-X1Y6-00000-00&amp;pdcontentcomponentid=500354&amp;pdteaserkey=h1&amp;pdislpamode=false&amp;ecomp=_yqg&amp;earg=sr6&amp;prid=f9cee0a8-e990-4116-b5bd-1503f5dbae9e\">[2020] 3 MLJ 545<\/a> (Federal Court) and Airbus Helicopters Malaysia Sdn Bhd v Aerial Power Lines Sdn Bhd [2024] 4 CLJ 243). In <em>Padda Gurtaj Singh v Tune Talk Sdn Bhd &amp; Ors and another appeal<\/em>\u00a0[2022] 4 MLJ 257, the Malaysian Court of Appeal held that a court has no discretion and that a stay is mandatory, unless at least one of the three exceptions set out in section 10(1) of the AA 2005 is satisfied.<\/p>\n<p>In <em>Universiti Malaya v Esa Jurutera Perunding Sdn Bhd<\/em> [2026] 4 MLJ 418, the Federal Court held that requests for time to file a defence and a notice to produce documents did not, on the facts, unequivocally show an intention to abandon arbitration. Whether conduct amounts to a \u201cstep\u201d requires an assessment of the circumstances as a whole.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What happens when a respondent fails to participate in the arbitration? Can the local courts compel participation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A respondent\u2019s absence does not stop the arbitration.<\/p>\n<p>Under Section 27 of the AA 2005, the tribunal may continue if the respondent fails to submit a defence or attend a hearing, but it must still assess the claimant\u2019s case: a missing defence is not, by itself, an admission. Rule 39 of the AIAC Arbitration Rules 2026 similarly addresses default. A Malaysian court cannot compel a respondent to defend the arbitration.<\/p>\n<p>A separate practical problem arises if deposits are unpaid: Rule 48 permits suspension or termination in specified circumstances. In <em>Kebabangan Petroleum Operating Co Sdn Bhd v Mikuni (M) Sdn Bhd &amp; Ors <\/em>[2021] 1 MLJ 693, a party\u2019s refusal to pay arbitration fees rendered the agreement inoperative on the facts, allowing the dispute to proceed in court.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can third parties voluntarily join arbitration proceedings? If all parties agree to the intervention, is the tribunal bound by this agreement? If all parties do not agree to the intervention, can the tribunal allow for it?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, a proposed additional party may request joinder under Rule 10 of the AIAC Rules 2026. Before the tribunal is constituted, the AIAC Court decides the request; afterwards, the tribunal decides it.<\/p>\n<p>Written consent from all existing parties and the proposed party is one basis for joinder, but it does not make the decision automatic: the decision-maker must consult them and consider the relevant circumstances.<\/p>\n<p>Without unanimous consent, joinder may still be allowed if the additional party is prima facie bound by the arbitration agreement, or its participation is necessary for efficient resolution and directly affects the outcome.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What interim measures are available? Will local courts issue interim measures pending the constitution of the tribunal? Are anti-suit and\/or anti-arbitration injunctions available and enforceable in your country? What is the approach of local courts in your jurisdiction to anti-arbitration injunctions issued in breach of arbitration agreements?  Have there been any recent decisions on this point?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 19 AA 2005, a tribunal may grant interim measures to preserve the position between the parties, protect assets or evidence, or prevent harm pending the award. Under Section 11 AA 2005, the High Court has concurrent jurisdiction to grant interim measures before or during arbitration, including asset arrest or security under its admiralty powers.<\/p>\n<p>Anti-suit and anti-arbitration injunctions are available in appropriate cases.<\/p>\n<ul>\n<li>In <em>Mobikom Sdn Bhd v Inmiss Communications Sdn Bhd<\/em> [2007] 3 MLJ 31, the Court of Appeal affirmed jurisdiction to grant anti-suit injunctions where interest of justice demands so.<\/li>\n<li>In <em>Jaya Sudhir a\/l Jayaram v Nautical Supreme Sdn Bhd &amp; Ors<\/em> [2019] 5 MLJ 1, the Federal Court allowed a non-party to restrain an arbitration that threatened its claimed rights; the court distinguished the test for a non-party from the more demanding approach applicable to a party seeking to stop its agreed arbitration. The availability of relief therefore depends on who seeks it and why.<\/li>\n<\/ul>\n<p>In <em>Cockett Marine Oil (Asia) Pte Ltd v MISC Bhd &amp; Another Appeal<\/em> [2023] 1 CLJ 20, MISC sued over a fuel supply dispute in Malaysia, while Cockett started arbitration in London under a clause in terms referred to in their emails. The High Court granted MISC an injunction restraining Cockett from taking further steps in the London arbitration. The Court of Appeal reversed that decision: the emails gave enough initial evidence of an arbitration agreement for the Malaysian court case to be paused. The arbitral tribunal should then decide whether the agreement actually binds the parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there particular rules governing evidentiary matters in arbitration? Will the local courts in your jurisdiction play any role in the obtaining of evidence? Can local courts compel witnesses to participate in arbitration proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Section 21 AA 2005 lets the parties agree on procedure. In the absence of agreement, the tribunal may decide the admissibility, relevance and weight of evidence and order document production. The IBA Rules on the Taking of Evidence may be adopted or used as guidance; they do not apply automatically.<\/p>\n<p>Under Section 29(1), a party may apply to the High Court for assistance in taking evidence with the tribunal\u2019s approval. Under Section 29(2), the court may order a witness to attend to give evidence or produce documents, including before the tribunal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your country? Do these codes and professional standards apply only to counsel and arbitrators having the nationality of your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sections 14 and 15 AA 2005 govern an arbitrator\u2019s independence, impartiality, disclosure and challenge. In AIAC proceedings, the AIAC Code of Conduct for Arbitrators also applies and identifies the IBA Guidelines on Conflicts of Interest as a relevant reference for disclosure.<\/p>\n<p>Malaysian advocates and solicitors acting as counsel remain subject to the Legal Profession Act 1976 and the Legal Profession (Practice and Etiquette) Rules 1978.<\/p>\n<p>These obligations turn on the arbitrator\u2019s role, the applicable institutional rules, or the counsel\u2019s professional status, not simply on Malaysian nationality.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In your country, are there any rules with respect to the confidentiality of arbitration proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Section 41A of the AA 2005 restricts disclosure of information relating to arbitral proceedings and awards, subject to exceptions including disclosure needed to pursue or protect a legal right, enforce or challenge an award, comply with a legal obligation, or obtain professional advice.<\/p>\n<p>The amendments effective in 2026 add section 46F, which permits disclosure for the purpose of seeking or securing third-party funding, subject to restrictions on further disclosure. Rule 52 of the AIAC Arbitration Rules 2026 imposes contractual confidentiality obligations on participants. It also permits the AIAC to publish a redacted award after two years unless a party or the tribunal objects in writing before the award is made.<\/p>\n<p>Statutory confidentiality does not automatically bind a non-party to the arbitration: Dato\u2019 Seri Timor Shah Rafiq v Nautilus Tug &amp; Towage Sdn Bhd [2019] 10 MLJ 693.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the IBA guidelines on conflicts of interest and other similar soft law sources viewed by courts and tribunals in your jurisdiction? Are they frequently applied? Have any developments under the 2024 IBA Guidelines, including the expanded Orange List, the treatment of social media conduct, or due diligence obligations on parties, and the UNCITRAL Code of Conduct for Arbitrators been addressed by courts and tribunals in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The IBA Guidelines on Conflicts of Interest are not binding under Malaysian law, but they provide guidance on what an arbitrator should disclose. The AIAC Code of Conduct for Arbitrators expressly refers to them as a relevant point of reference.<\/p>\n<p>In <em>Bumimetro Construction Sdn Bhd v Must Ehsan Development Sdn Bhd<\/em> [2025] CLJU 2601, the High Court considered an Orange List example concerning repeated appointments by the same lawyers. It rejected a challenge to the arbitrator because the required number of appointments had not been shown.<\/p>\n<p>No reported Malaysian arbitration decision has yet decided on the specific 2024 additions or applied the UNCITRAL Code of Conduct for Arbitrators.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the costs of arbitration proceedings estimated and allocated? Can pre- and post-award interest be included in the principal claim and costs incurred?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The costs of arbitration are governed by AA 2005 and the agreed institutional rules. Where the AIAC Arbitration Rules 2026 apply, Rules 47\u201348 govern costs and deposits, with fee scales in Schedule 1 and general fee and deposit provisions in Schedule 2.<\/p>\n<p>Section 44 AA 2005 confers broad discretion on the tribunal to determine costs.<\/p>\n<p>Separately, under Section 33(6) AA 2005, the tribunal may award pre- and post-award interest on the principal sum and on costs at such rates and for such periods as it considers appropriate, unless otherwise agreed by the parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are applications for security for costs viewed in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sections 19(2)(e) and 21(3)(d) AA 2005 allow the tribunal to order security for costs, while Section 11(1)(e) gives the High Court power to do so. A party seeking security should ordinarily apply to the tribunal and explain, with evidence, why it may be unable to recover its costs if it succeeds. The tribunal then decides whether security is warranted.<\/p>\n<p>In <em>Malaysia Resources Corporation Bhd v Desaru Peace Holdings Club Sdn Bhd<\/em> [2023] 4 CLJ 91, the High Court dismissed an application for security for costs made directly to it. Although both the tribunal and the court can order security for costs, parties should first apply to the tribunal unless exceptional circumstances exist. Examples include urgency, a tribunal that has not yet been constituted, or a need for powers that only the court can exercise. The other party\u2019s consent is not needed to apply to the tribunal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What legal requirements are there in your country for the recognition and enforcement of an award? Is there a requirement that the award be reasoned, i.e. substantiated and motivated?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 38 AA 2005, an award made at a Malaysian seat, or an award from a foreign State within the Act, is recognised as binding. Enforcement still requires a written application to the High Court and remains subject to Section 39. The applicant must produce the authenticated original award or a certified copy, and the original arbitration agreement or a certified copy, with a certified English translation where required by Section 38.<\/p>\n<p>Under Section 33(3), an award must state its reasons unless the parties agree otherwise or it records agreed settlement terms. The 2026 amendment also expressly recognises digital and electronic signatures for this purpose.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the estimated timeframe for the recognition and enforcement of an award (domestic and international)? Can a party bring a motion for the recognition and enforcement of an award on an ex parte basis? Would the standard of review be different for domestic and international awards?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 38(1) AA 2005, a qualifying award is recognised as binding without a separate court application. A party seeking to enforce it must, however, apply to the High Court.<\/p>\n<p>Under Order 69 rule 8 of the Rules of Court 2012, the initial application for permission to enforce the award as a judgment may be made without notice to the respondent. If permission is granted, the creditor draws up and serves the order on the respondent. The respondent has 14 days from service, or such other period as the court sets for service outside Malaysia, to apply to set aside the order. The award cannot be executed until that period expires or, if an application is made, until it is finally disposed of.<\/p>\n<p>An uncontested application might take approximately two to three months; a contested one might take six to nine months or longer.<\/p>\n<p>Section 39 supplies the grounds for opposing recognition or enforcement of both Malaysian and qualifying foreign awards; the court does not rehear either award on its merits. See <em>CTI Group Inc v International Bulk Carriers SpA<\/em> [2017] 5 MLJ 314 (FC).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can arbitration awards be appealed or challenged in local courts? What are the grounds and procedure in this regard? Is it possible for parties to waive any rights of appeal or challenge to an award by agreement?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Arbitral awards are final, binding, and conclusive, with no right of appeal on fact or law (see <em>Asean Bintulu Fertilizer Sdn Bhd v Wekajaya Sdn Bhd<\/em> [2018] 4 MLJ 799).<\/p>\n<p>The limited circumstances in which an arbitral award may be set aside, or its recognition and enforcement opposed, are set out under Sections 37 and 39 of the AA 2005. The limited grounds include: &#8211;<\/p>\n<ul>\n<li>an invalid arbitration agreement,<\/li>\n<li>inadequate notice or inability to present a case,<\/li>\n<li>decisions outside the submission,<\/li>\n<li>improper tribunal composition or procedure,<\/li>\n<li>non-arbitrability, and<\/li>\n<li>public policy.<\/li>\n<\/ul>\n<p>Section 37 expressly includes an award induced or affected by fraud or corruption, or a relevant breach of natural justice. In <em>Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd<\/em> [2020] 12 MLJ 198, the Federal Court held that, when deciding whether to set aside an award, the court considers whether a breach of natural justice was material to the outcome; proof of actual prejudice is not a separate requirement. In <em>Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd<\/em> [2021] 1 MLJ 1, the Federal Court held that the arbitrator does not breach natural justice merely by applying his own expertise to an issue on which the parties gave evidence.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In what instances can third parties or non-signatories be bound by an award? To what extent might a third party challenge the recognition of an award?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, an arbitral award pursuant to an arbitration agreement is only binding on the parties to the arbitration agreement (Section 36(1) AA 2005). Further, the AA 2005 does not confer the right to a third party to challenge the recognition of an arbitral award.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any rules \/ court decisions that regulate or prohibit third party funding of arbitration proceedings \u2013 for instance, where funding by an entity not involved in the dispute in return for a share of the eventual award may be barred \u2013 in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Since 1 January 2026, third party funding has become possible in Malaysia in relation to arbitrations. Sections 46A\u201346I of the Arbitration Act 2005 now regulate third-party funding of arbitration. Section 46C removes the common-law objection based on maintenance and champerty to third-party funding of arbitration, although other grounds of illegality or public policy remain possible. The regime does not, however, apply retrospectively to a funding agreement made before its commencement.<\/p>\n<p>Under section 46G, the funded party must disclose the existence of the funding agreement and the funder\u2019s name to the other party and the tribunal or relevant court: on commencement if funding was already agreed, or within 15 days if agreed later. Termination must also be disclosed within 15 days under section 46H.<\/p>\n<p>The Code of Practice for Third Party Funding 2026 sets standards for funders, including financial capacity and management of conflicts of interest. Rule 31 of the AIAC Arbitration Rules 2026 also requires disclosure in AIAC arbitrations and allows the tribunal to take funding into account when making orders or allocating costs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is emergency arbitrator relief available and recognized in your country? Are decisions made by emergency arbitrators readily enforceable?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Section 2 of the Arbitration Act 2005 includes an emergency arbitrator within the definition of an \u201carbitral tribunal\u201d. Rules 12 and 13 of the AIAC Arbitration Rules 2026 allow a party to seek urgent relief before the main tribunal is formed, and make an emergency arbitrator\u2019s order or award binding on the parties when issued.<\/p>\n<p>An emergency arbitrator\u2019s interim measure may be enforced through a court application under Section 19H, subject to the grounds for refusal in Section 19I. These include a party\u2019s incapacity or an invalid arbitration agreement; lack of notice or an opportunity to present a case; a measure beyond the scope of the arbitration; improper tribunal composition or procedure; failure to comply with security ordered by the tribunal; suspension or termination of the measure; incompatibility with the court\u2019s powers; non-arbitrability; or conflict with Malaysian public policy. Enforcement is therefore available, but it is not automatic.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there arbitral laws or arbitration institutional rules in your country providing simplified or expedited procedures for claims under a certain value? Are they often used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Under Rule 7 of the AIAC Arbitration Rules 2026, a party may request the Fast Track Procedure before the tribunal is constituted where the parties agreed to it, the amount in dispute is less than USD3 million for an international arbitration or RM2 million for a domestic arbitration, or there is exceptional urgency. For the value and urgency routes, the AIAC President decides whether it applies. The default is a sole arbitrator and a documents-only process, with an award due within six months of constitution unless the parties agree otherwise.<\/p>\n<p>However, it remains infrequently utilised in practice, as noted in AIAC\u2019s recent Annual Reports.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any recent court decisions in your country considering the setting aside of an award that has been enforced in another jurisdiction or vice versa?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. The governing provision is Section 39(1)(a)(vii) AA 2005: proof that the award has been set aside or suspended by a competent court in the country where, or under whose law, it was made is a ground on which Malaysian recognition or enforcement may be refused.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any recent court decisions in your country considering the issue of corruption? What standard do local courts apply for proving corruption? Which party bears the burden of proving corruption?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Section 37(2)(a) AA 2005 expressly treats an award whose making was induced or affected by fraud or corruption as contrary to Malaysian public policy; section 39 permits refusal of enforcement for conflict with public policy. The party alleging corruption bears the burden. Applying the general civil standard, it must prove its allegation on the balance of probabilities, with evidence connecting the alleged wrongdoing to the making of the particular award.<\/p>\n<p>In <em>MMC Engineering Group Bhd &amp; Anor v Wayss &amp; Freytag (M) Sdn Bhd &amp; Anor<\/em> [2015] MLJU 477, the challenge relied in part on an arbitrator\u2019s undisclosed bribery charge arising from another arbitration. The High Court did not treat that charge, without evidence of a connection to the arbitration before it, as proof that this award was tainted. The case supports the need for a link to the particular award; it should not be described as a finding that corruption occurred in that arbitration, or as fixing a special corruption-specific standard of proof.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your country withdrawn from, or announced its intention to withdraw from, the Energy Charter Treaty?  What is the status of the sunset clause in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Malaysia is not a signatory or contracting party to the Energy Charter Treaty (\u201c<strong>ECT<\/strong>\u201d), so it has not withdrawn or announced a withdrawal from it. The ECT\u2019s Article 47(3) provision continuing protection for certain existing investments for 20 years after a contracting party\u2019s withdrawal therefore has no application to Malaysia.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any recent court decisions or legislative developments in your country with respect to intra-European investor-State arbitration, the Energy Charter Treaty, or the enforcement of intra-EU? Are there any pending decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No Malaysian decision has been identified that directly addresses intra-EU investor\u2013State arbitration, the Energy Charter Treaty, or the recognition or enforcement in Malaysia of an intra-EU award.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have arbitral institutions in your country implemented reforms towards greater use of technology and a more cost-effective conduct of arbitrations? Have there been any recent developments regarding virtual hearings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The AIAC Arbitration Rules 2026 facilitate remote participation and more efficient conduct: &#8211;<\/p>\n<ul>\n<li>The term \u201cvirtually\u201d now covers the entire arbitration, not merely hearings (Rule 2.4);<\/li>\n<li>Emergency arbitrations may be conducted virtually (Rule 13.5); and<\/li>\n<li>Tribunals are expressly empowered to hold case management meetings virtually (Rule 28.1(c)).<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have there been any recent judicial and\/or legislative developments in your jurisdiction with regard to disputes involving ESG issues such as climate change, sustainability, social responsibility and\/or human rights?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no Malaysian arbitral decision establishing new ESG-specific arbitration rule.<\/p>\n<p>On the other hand, in terms of legislative developments in Malaysia, the Energy Efficiency and Conservation Act 2024 took effect on 1 January 2025. The Carbon Capture, Utilisation and Storage Act 2025 also came into force on 1 October 2025 (except Part VII concerning onshore assessment and permanent storage), establishing a framework for carbon capture, transportation, utilisation and permanent storage.<\/p>\n<p>On social responsibility, the Gig Workers Act 2025 came into force on 31 March 2026 and establishes a dedicated dispute resolution mechanism and Gig Workers Tribunal.<\/p>\n<p>On human rights, the Federal Court in <em>Amir Hariri Abd Hadi v PP<\/em> [2025] 5 MLRA 395 held the penal provision in section 9(5) of the Peaceful Assembly Act 2012 unconstitutional.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have any international economic sanctions regimes been implemented (either independently, or based on EU law) in your jurisdiction recently? Have there been any recent decisions in your country considering the impact of sanctions on international arbitration proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Malaysia gives effect to relevant United Nations Security Council sanctions through domestic measures, including the Strategic Trade Act 2010 and its subsidiary legislation concerning prohibited end users and targeted financial sanctions. EU sanctions do not apply automatically in Malaysia.<\/p>\n<p>There are no reported decisions addressing the impact of sanctions on arbitration proceedings in Malaysia.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your country enacted any regulation and\/or implemented any rules, guidlines or regulations regarding the use of artificial intelligence (AI), generative AI or large language models in the context of dispute resolution?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Malaysia has not enacted rules specifically governing the use of AI, generative AI or large language models in arbitration. The AIAC Arbitration Rules 2026 contain no dedicated provision on their use.<\/p>\n<p>The Government plans to table an AI Governance Bill in early 2027. The proposed Bill would provide a framework across sectors, with safeguards based on the potential harm posed by an AI system. The Digital Minister has said it would address safety, human rights and individual well-being, with stronger testing, monitoring and human oversight for more powerful systems. The Bill has not been enacted and does not currently impose requirements on arbitrations.<\/p>\n<p>More generally, the National Guidelines on AI Governance and Ethics set out seven voluntary principles, supplemented by a voluntary AI Code of Ethics. The Cyber Security Act 2024 regulates national critical information infrastructure and cybersecurity service providers, but does not prescribe how AI may be used in dispute resolution.<\/p>\n<p>The Malaysian Bar\u2019s 2025 advisory on generative AI in legal practice reminds lawyers to check AI-generated work and safeguard client confidentiality. These measures are relevant to lawyers conducting arbitrations, but do not prescribe an arbitration-specific procedure for AI use.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any specific legal, institutional, or procedural frameworks in your jurisdiction governing the arbitration of digital asset or blockchain-related disputes?  Have there been any court decisions in your jurisdiction concerning the validity or enforceability of arbitration agreements incorporated into smart contracts or digital asset terms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Malaysia has no separate arbitration framework for digital asset or blockchain disputes. Such disputes may be arbitrated under the Arbitration Act 2005 and applicable institutional rules where the parties have a valid arbitration agreement and the subject matter is arbitrable.<\/p>\n<p>The Securities Commission regulates the offering and trading of certain digital assets, but those rules do not establish a separate dispute-resolution procedure.<\/p>\n<p>There is no reported Malaysian decision directly deciding whether an arbitration clause incorporated into a smart contract or digital asset terms is valid or enforceable.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">6658<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/154168","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=154168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}