By J.R. Tey
1. Alongside adjudication and mediation, arbitration
has been an effective means to avoid taking your case to the level of
litigation where legal procedures must be involved. When it comes to matters of
the law, the utmost skill and attention need to be paid to the particulars of
any case, especially those that involve disputes of any nature from
straightforward to contentious ones and these are not to be compromised. At
its core, arbitration is an alternative process to dispute resolution that is
conducted outside of the courtroom.
2. In
Malaysia, it has been a myth that arbitration serves as a less time consuming
and more cost effective means to settling a legal issue than those which would
be employed if the matter were taken to court. This perception subsisted until
quite recently the judiciary underwent a dramatic and historic reform under the
leadership of the then Chief Justice Tun Zaki whom is a true believer of Magna
Carta’s “Justice Delayed is Justice
Denied” that sees a drastic improvement in the judiciary in a lot of ways.
3. Due
to the nature and the way in which arbitration is conducted, it is most often
used to resolve commercial disputes, especially those that involved
international commercial transactions. Arbitration is further employed in
matters pertaining to inter alia
construction law, insurance law, employment law as well as Islamic banking law
(KLRCA recently published the very first iKLRCA Rules governing all syariah
compliant disputes).
4. Intrinsically,
it is the arbitration agreement that extricates arbitration from other form of
dispute resolution i.e. mediation and conciliation. Only if there is an
agreement reached between the parties, can they submit the dispute arisen for
arbitration. Section 9 of the 2005 Act spells out the definition and nature of
an arbitration agreement.
5. To
arbitrate a dispute or to commence arbitration, as opposed to filing a writ in
the court of law; the party claiming is to issue a notice of arbitration to the
respondent showing its intention to claim against the respondent. In this
regard, the procedural rules governing the arbitration proceedings fall back to
the provision of the arbitration agreement. It is not uncommon for parties to
decide and agree upon the specific rules i.e. KLRCA Rules, ICC Rules and SIAC
Rules governing the arbitration proceedings.
6. Rather
than employing the professional services of a judge, matters of arbitration
will be addressed by an arbitrator whom will act as the deciding factor in how
a dispute occurred and how it could be corrected or compensated. The
appointment of the arbitral tribunal is rather flexible as it allows the
parties to arrive at an agreement as to whom to be the arbitrator(s) most
suitable to hear and decide upon their dispute(s).
7. All
parties subject to the jurisdiction of an arbitrator will be legally bound to
the decisions ruled by said authority. This is meant to act as a resolution
technique. After care review of the evidence provided regarding the given
situation at hand, an arbitrator will impose a decision regarding the matter
that will be considered legally binding for all parties involved in the matter
and all parties are expected to follow suit in terms of the ruling made. This
is reflected vide section 36 of the 2005 Act. Upon making their ruling, an
arbiter’s decision will be immediately enforceable.
8. Enforcement
of an arbitration award is another major concern of the parties when
arbitrating their dispute(s). This is particularly important especially when
the arbitration concerned involves parties from different jurisdictions. In
this regard, the New York Convention is one of the key instruments in
international arbitration for the convention primarily intends to facilitate
the enforcement of awards against foreign parties. In this region, whilst
nearly every Asian jurisdiction is a signatory to this convention, fully
implementing of and giving full effect to the convention is as
challenging.
9. Finally,
what is evident over the past few years is that the development of arbitration
in Asia will unlikely to regress. There has been exponential growth in most of
the major economies in this region in various aspects from establishing a
user-friendly set of rules for practitioners by our legislatures to giving
support to the arbitral process by our courts.
10. Over
the years of development in Malaysia, in particular the introduction of the new
2005 Act which superseded the previous 1952 Act as well as the tireless efforts
of various stakeholders in promoting Malaysia as the arbitration hub along with
Hong Kong and Singapore in the region; there have been a plethora of case laws
and discussions stemming from various issues as regards arbitration and these
are vitally important in order to brand Malaysia as the best alternative to
those established arbitration centres; at least in the region, if not in the
world. KLRCA has been swift and resilient to keep pace with the demands of the
market from updating its rules to providing good facility in this regard.