Trade Disputes in Malaysia

Overview by
Arbitration has become the main instrument of conflict resolution. The only, if constraining, alternative to often long and costly legal procedures, arbitration has the advantage of being confidential, neutral and flexible.
Arbitration Law
Legislation concerning arbitration has been modernized recently, and it is the Arbitration Act 2005 which applies presently.
Conformity to International Commercial Arbitration Rules
Party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Appointment of Arbitrators
The parties are free to choose the number of arbitrators and the way they are selected. If they do not agree, two arbitrators are designated if it is a local arbitration, and three arbitrators for an international arbitration. If there is no agreement, each party chooses an arbitrator and the two arbitrators designate a third arbitrator who presides. If there is disagreement, recourse must be had to the director of the Kuala Lumpur Regional Center for Arbitration. In a case where only one arbitrator is planned and if there is no agreement, recourse must also be had to the Kuala Lumpur Regional Center for Arbitration. In the case of default by the latter, recourse must be had to the High Court.
Arbitration Procedure
The parties are free to determine the procedure to be followed by the arbitration tribunal. If there is no agreement, the arbitration tribunal sets its own procedures and thus decides if the request for arbitration is admissible, the deadlines to be observed for producing documents and evidence, the dates of hearings, etc. The choice of the language used is left to the parties, and if there is no agreement, to the arbitration tribunal. Within a period of time decided by the parties, or if not by the arbitration tribunal, the plaintiff must state the facts supporting his complaint, the object of the dispute, the solution or compensation suggested, and the defendant must formulate his defense. The parties must base their declaration on any document judged to be pertinent, or refer to it. Unless there is prior agreement between the parties, the tribunal decides if an oral hearing is appropriate, to be added to the examination of the written documents provided. The tribunal can appoint an expert, and the parties can, with the agreement of the tribunal, have recourse to the High Court to provide evidence. The law applicable is that of Malaysia for a local case, or that of the State chosen by the parties in the case of international arbitration. The procedure terminates when the tribunal prounounces its judgement, or when the plaintiff withdraws his complaint, the parties agree to terminate the procedure, or the tribunal decides to terminate the procedure. The judgement pronounced is definitive and binding.
Permanent Arbitration Bodies
Kuala Lumpur regional center for arbitration (KLRCA)
International center for settlement of investment disputes (ICSID)

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