MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
BICAM’s Initiatives BICAM has a set of arbitration rules – the BICAM Arbi - tration Rules 2023 – and is seeking to promote arbitra -
Section 21 of the AA 2005 also gives tribunals broad procedural powers, including powers to order par - ticulars, discovery, interrogatories, evidence on oath, security for costs and procedural timetables. 2.2 Changes to National Law The key recent development is that the Arbitration (Amendment) Act 2024, gazetted on 1 November 2024, came into force on 1 January 2026. The key changes are as follows. • Where parties have not agreed on the law applica - ble to the arbitration agreement, the default law is the law of the seat of arbitration (Section 5). • Digital and electronic signatures on arbitral awards are now expressly recognised (Section 8). • An arbitration award shall now be recognised as binding without requiring an application to be made for its recognition (Section 9). • The common law against maintenance and cham - perty shall cease to apply in relation to third-party funding and shall not be treated as contrary to public policy (Section 10). • A Code of Practice for Third Party Funding 2026 has been introduced, setting out the practices and standards relating to third-party funding in which third-party funders are expected to comply with disclosure requirements (Section 10). The Code came into force on 1 January 2026. • The term “Director of the Asian International Arbi - tration Centre (Malaysia)” has been substituted with the term “President” (which refers to the Presi - dent of the Asian International Arbitration Centre Court of Arbitration (Sections 2 and 6).
tion under those Rules. 1.4 National Courts
The High Courts of Malaysia are designated to hear disputes related to international arbitration and domestic arbitrations for matters where they have jurisdiction under the Arbitration Act 2005. There are designated arbitration specialist courts that deal with arbitration-related matters arising typically from con - struction and commercial-related arbitration disputes.
2. Governing Legislation 2.1 Governing Law
The Arbitration Act 2005 (the “AA 2005”) governs domestic and international arbitration in Malaysia. Parts I, II and IV of the AA 2005 are mandatory for international arbitration. Part III, comprising Sections 40 to 46, does not apply to international arbitrations unless the parties agree to opt in, in writing. Comparison With the UNCITRAL Model Law The AA 2005 is based closely on the UNCITRAL Model Law. Part II of the AA 2005 comprises general provisions and provisions relating to arbitration agree - ments, the composition of arbitrators, the jurisdiction of the arbitral tribunal, conduct of arbitral proceed - ings, the making of awards and termination of pro - ceedings, recourse against awards and the recogni - tion and enforcement of awards – closely mirroring the subject headings and sequence of Articles 3 to 36 of the UNCITRAL Model Law. In the context of international arbitration, there are no significant differences between the AA 2005 and the UNCITRAL Model Law. However, specific powers are provided to arbitrators in several sections of the AA 2005 which are not found in the UNCITRAL Model Law. For instance, the AA 2005 empowers the arbi - tral tribunal to grant security for costs as an interim measure (see Section 19E of the AA 2005) and to give directions for the speedy determination of a claim if the claimant fails to proceed with the claim (see Sec - tion 27 (d) of the AA 2005).
3. The Arbitration Agreement 3.1 Enforceability
An arbitration agreement must be an agreement by the parties to submit to arbitration all or certain dis - putes which have arisen or may arise between them in respect of a defined legal relationship, whether con - tractual or not (see Section 9 of the AA 2005). Forms of Arbitration Agreement An arbitration agreement may be in the form of an arbitration clause contained in an agreement, in a
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