MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
treated as an agreement independent of the other terms of the agreement in which it is contained. A decision by an arbitral tribunal that the agreement is null and void does not invalidate the agreement to arbitrate (see Standard Chartered Bank Malaysia Bhd v City Properties Sdn Bhd and Another [2008] 1 MLJ 233 – High Court). The Court of Appeal has reiterated the rule of sepa - rability of arbitration clauses in the recent cases of Tumpuan Megah Development Sdn Bhd v Ing Bank N V and Another [2024] 3 CLJ 18 and Peninsula Educa- tion ( Setia Alam ) Sdn Bhd v Biaxis ( M ) Sdn Bhd [2024] 5 MLJ 388. There are no limits set by the AA 2005 on the par - ties’ autonomy to select arbitrators in Malaysia. It is explicitly provided in Section 13 of the AA 2005 that no person shall be precluded by reason of nationality from acting as an arbitrator, unless the parties agree otherwise. 4.2 Default Procedures Where the parties’ chosen method for selecting arbi - trators fails, the default procedure depends on the number of arbitrators appointed – ie, one or three. In the context of international arbitration, where parties fail to determine the number of arbitrators, the default position is three arbitrators in an international arbitra - tion and one in a domestic arbitration (see Section 12 AA 2005). Where the arbitration consists of three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitra - tor as the presiding arbitrator (see Section 13 (3) AA 2005). If a party fails to appoint an arbitrator within 30 days of receiving a request in writing to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within 30 days of their appointment or within such extended period as the parties may agree, either party may apply to the President of the AIAC Court of Arbitration for such appointment (see Section 13 (4) AA 2005). 4. The Arbitral Tribunal 4.1 Limits on Selection
Where the arbitration consists of a sole arbitrator and the parties fail to agree on the arbitrator, either party may apply to the President for the appointment of the sole arbitrator (see Section 13 (5) AA 2005). Where the parties have agreed on the procedure for appointment of the arbitrator(s), and a party fails to act as required under such procedure, or the parties, or two arbitrators, are unable to reach an agreement under such procedure, or a third party, including an institution, fails to perform any function entrusted to it under such procedure, any party may request the President to take the necessary measures, unless the agreement on the appointment procedure provides other means for securing the appointment (see Sec - tion 13 (6) AA 2005). The decision of the President is final and non-appealable (see Section 13 (9) AA 2005). Multiparty Arbitrations Where there are multiple parties in an arbitration con - sisting of a sole arbitrator and the parties fail to agree on the arbitrator, any party may apply to the President for the appointment of the sole arbitrator. The decision of the AIAC is final and non-appealable. The newly inserted Section 13 (3A) provides that, where there are multiple claimants or multiple respondents and the arbitration consists of three arbitrators, all the claimants shall jointly appoint one arbitrator and all the respondents shall jointly appoint one arbitrator. The two arbitrators so appointed shall then appoint the third arbitrator as the presiding arbitrator. This posi - tion is also consistent with the AIAC Arbitration Rules 2026 (Rule 20). 4.3 Court Intervention Where the President is unable to act or fails to act within 30 days when any party applies to them for the appointment of an arbitrator, any party may apply to the High Court for the appointment of the arbitra - tor (see Section 13 (7) AA 2005). If such an applica - tion is made, the High Court is required to have due regard to any qualifications required of the arbitrator by the agreement of the parties, other considerations that are likely to secure the appointment of an inde - pendent and impartial arbitrator, and the advisability of appointing an arbitrator of a nationality other than those of the parties. The appointment of the arbitra -
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