MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
Shearn Delamore & Co 7th Floor Wisma Hamzah-Kwong Hing
No 1 Leboh Ampang 50100 Kuala Lumpur Malaysia Tel: +603 2027 2727 Fax: +603 2078 5625
Email: info@shearndelamore.com Web: www.shearndelamore.com
1. General 1.1 Prevalence of Arbitration
1.2 Key Industries AIAC statistics indicate that the majority of arbitra - tions registered in 2022-2023 relate to construction contracts. This is largely consistent with the trend in previous years. We expect this trend to continue in 2025. AIAC statistics do not indicate any particular indus - tries that experienced significant international arbitra - tion activity in 2022-2023. 1.3 Arbitration Institutions The arbitral institution most used for international arbi - tration in Malaysia is the AIAC. The AIAC was previously known as the Kuala Lumpur Regional Centre for Arbitration. It was first established in 1978 under the Asian–African Legal Consultative Organization as a not-for-profit, non-governmental international organisation aimed at promoting alter - native dispute resolution in the Asian region. It was subsequently rebranded as the AIAC on 7 February 2018. In 2021, the Affordable Arbitration and ADR Cham - bers PLT (AA-ADR Chambers) was established with the goal of promoting University cum Court Annexed Arbitration – ie, where courts allow parties to opt, by mutual agreement, out of the court system and refer the dispute to arbitration. The chambers targets arbi - tration and alternative dispute resolution solutions for matters filed in court where there is no agreement to arbitrate. The chambers provides all forms of domes - tic and international alternative dispute resolution ser -
Litigation continues to be the primary method of resolving disputes in Malaysia, for both domestic and international disputes. This is not expected to change in the near future. The Asian International Arbitration Centre (AIAC) has not published its statistics for 2024. Based on statistics from the Asian International Arbi - tration Centre (AIAC), for arbitrations registered with the AIAC (both AIAC-administered matters and ad hoc appointments), the number of domestic arbitration registrations is increasing in recent years (69 domes - tic arbitrations in 2022 and 92 domestic arbitrations in 2023) and it is expected to improve further. Quite a fair number of domestic construction-based disputes are disposed of by adjudication. The number of international arbitration registrations at the AIAC has been relatively constant over the last few years (nine international arbitrations in 2022 and 11 international arbitrations in 2023). The available statistics for 2023 show a significant surge in AIAC-registered domestic arbitration and a slight rise in international arbitrations compared to the preceding year. We expect this trend to continue in 2024 as the effects of the COVID-19 pandemic recede.
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