MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
5.6 Jurisdiction Over Third Parties The arbitral tribunal cannot assume jurisdiction over individuals or entities that are neither party to an arbi - tration agreement nor signatories to the contract con - taining the arbitration agreement. The AA 2005 does not apply to non-parties to an arbitration agreement (see the Malaysian Federal Court decision in Jaya Sudhir a/l Jayaram v Nautical Supreme Sdn Bhd & Ors [2019] 5 MLJ 1).
6.2 Role of Courts The High Court has the power to issue any interim relief before or during arbitration proceedings, and it is only approached to grant an interim remedy which will ultimately support or aid that arbitration (see the Malaysian Court of Appeal decision in KNM Process Systems Sdn Bhd v Lukoil Uzbekistan Operating Com- pany LLC [2020] MLJU 85; [2020] 1 LNS 479 affirmed in the Court of Appeal case of Damai City Sdn Bhd v MCC Overseas (M) Sdn Bhd and other appeals [2023] 1 MLJ 258). This is irrespective of whether the seat of arbitration is in Malaysia (see Sections 11 (3) and 19J(1) AA 2005). Pursuant to Section 11 of the AA 2005, the High Court may make the following orders: • to maintain or restore the status quo pending the determination of the dispute; • to take action that would prevent current or immi - nent harm or prejudice to the arbitral process, or to refrain from taking action that is likely to cause such harm or prejudice; • to provide a means of preserving assets out of which a subsequent award may be satisfied, whether by way of arrest of property or bail or other security, pursuant to the admiralty jurisdiction of the High Court; • to preserve evidence that may be relevant and material to the resolution of the dispute; or • to provide security for the costs of the dispute. It should be noted that the powers of the court to grant interim relief are wider than the powers of an arbitral tribunal. In considering an order to provide a means of preserving assets out of which a subsequent award may be satisfied, the High Court has the power to order an arrest of property or bail or other security. Such power is not confined to the admiralty jurisdic - tion of the High Court; it extends to its civil jurisdic - tion under the Courts of Judicature Act 1967 (see the High Court decision in JANA DCS Sdn Bhd v TAR PH Family Entertainment Sdn Bhd and other cases [2022] 8 MLJ 201). Recently, in Malaysia Resources Corporation Bhd v Desaru Peace Holdings Club Sdn Bhd [2023] 4 CLJ 91, the claimant in an arbitration filed an application
6. Preliminary and Interim Relief 6.1 Types of Relief
Pursuant to Section 19 of the AA 2005, unless oth - erwise agreed by the parties, an arbitral tribunal is permitted to grant the following interim reliefs: • to order a party to maintain or restore the status quo pending determination of the dispute; • to take action that would prevent current or immi - nent harm or prejudice to the arbitral process itself, or to refrain from taking action that is likely to cause such harm or prejudice; • to provide a means of preserving assets out of which a subsequent award may be satisfied; • to preserve evidence that may be relevant and material to the resolution of the dispute; or • to provide security for the costs of the dispute. An interim measure issued by an arbitral tribunal shall be recognised as binding and, unless otherwise pro - vided by the arbitral tribunal, enforced upon applica - tion to the court, irrespective of the country in which it was issued (see Section 19H of the AA 2005). The powers of the tribunal under Section 19 of the AA 2005 were further clarified in the case of Malaysia Resources Corporation Bhd v Desaru Peace Hold- ings Clubs Sdn Bhd [2023] 4 CLJ 91, which affirmed that, by default, arbitral tribunals have jurisdiction to grant interim measures. The phrase “unless other - wise agreed by the parties” in Section 19 (1) requires a clear, mutual agreement that interim measures are to be sought exclusively from the courts rather than the arbitral tribunal. A mere refusal to consent or a lack of response does not constitute such an agreement.
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