In recent years, an increasing number of Malaysian and foreign
companies have embraced arbitration as an alternative means for
resolving their commercial disputes. With careful drafting, the
parties to a contract can tailor the arbitration process to meet
their specific needs and circumstances. Because of this trend
towards arbitration, courts are routinely asked to determine
whether arbitration is compulsory under a given
contract.[1] Interestingly, while the Malaysian courts
uniformly answer this question in the affirmative for arbitration
agreements containing the word "shall", the presence of
the term "may" does not render an arbitration clause
permissive.
Anzen
The Privy Council decision in Anzen[2] has
important implications for the drafting of arbitration clauses. In
that case, the Privy Council addressed the issue of whether an
arbitration clause in a shareholders' agreement — which
provided that in the event of an unresolved dispute, "any
party may submit
