MALAYSIA Trends and Developments Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
further emphasised that Section 33 of the AA, when read together with Section 2, requires an award to be made in writing and to state the reasons for the deci - sion, subject to limited exceptions. Accordingly, the Federal Court held that since the oral decision on liability constituted a final and bind - ing determination on the substance of the dispute, it was mandatory for the arbitrator to issue a written award on liability in compliance with the AA, before proceeding with the determination of quantum. With - out the written award, the arbitrator’s oral decision on liability was invalid and of no legal effect as it could not be enforced, set aside or even form the basis for reference in law. Limitation Period Stops to Run for Arbitration Proceedings When an Action is Filed in Court In Bongsor Bina Sdn Bhd v SH Builders & Marketing Sdn Bhd [2024 5 MLJ 856], the Court of Appeal clari - fied the issue of whether arbitration proceedings are time-barred if prior court proceedings were filed within the limitation period. The Court of Appeal affirmed the High Court decision that (i) the limitation period stops running when proceedings are filed in court, even if the dispute is later referred to arbitration as a result of a successful stay application; and that (ii) Section 30 of the Limitation Act 1953 and Section 23 of the AA only apply to cases where the disputes are referred directly to arbitration without a prior court action relat - ing to the same dispute.
However, the Court of Appeal cautioned that this does not justify unreasonable delays in issuing the notice of arbitration once the stay application is granted in favour of the defendant; the plaintiff must act promptly or within a reasonable time in filing the Notice of Arbi - tration, failing which they risk losing the right to arbi - trate their dispute via the doctrine of laches. Conclusion These decisions collectively reaffirm that while Malay - sia remains firmly arbitration-friendly, arbitration must operate within the bounds of established legal norms and statutory requirements. Arbitrators are expected to respect binding precedent, adhere to procedural safeguards under the Arbitration Act 2005, and issue awards in compliance with formal requirements.
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