Arbitration Updates: Malaysia's 2026 Arbitration Reform

Malaysia's arbitration framework has undergone significant reform with effect from 1 January 2026, when the Arbitration (Amendment) Act 2024 (the "2024 Act") entered into force and introduced substantial changes to the Arbitration Act 2005 (as previously amended) (the "2005 Act"). At the same time, Malaysia's principal arbitral institution, the Asian International Arbitration Centre (Malaysia) (the "AIAC"), brought into force a revised suite of AIAC Arbitration Rules (the "2026 AIAC Rules").

Taken together, these developments amount to a significant update of Malaysia's arbitration framework. On the legislative side, the 2024 Act introduces, among other changes, a statutory regime for third-party funding, clarifies the default law governing the arbitration agreement, and updates a number of procedural provisions relevant to tribunal constitution, arbitral procedure, and the form of awards. On the institutional side, the 2026 AIAC Rules establish a new AIAC Court of Arbitration and