MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
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. 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 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 for security for costs in the High Court instead of the arbitral tribunal. This was opposed by the respond - ent, who argued that the application should have been made to the arbitral tribunal instead. The High Court held that, in the absence of a prior agreement between the parties to exclude the arbitral tribunal’s jurisdiction to grant interim measures pursuant to Sec - tion 19 of the AA 2005, the parties must resort to the arbitral tribunal first to grant such interim measures notwithstanding the court’s parallel jurisdiction. The only exceptions which may justify bypassing the arbi - tral tribunal’s jurisdiction in granting interim relief are where: • the interim measure is sought against a third party over whom the arbitral tribunal has no jurisdiction; • the issue in question is very urgent; • the High Court’s coercive powers of enforcement are needed; or • the arbitral tribunal has not been constituted. Emergency Arbitrators The AA 2005 recognises the use of emergency arbitra - tors. The definition of “arbitral tribunal” under the AA 2005 includes an emergency arbitrator. Emergency arbitrators are prescribed the same pow - ers as the arbitral tribunal. Accordingly, pursuant to Section 19H AA 2005, decisions of emergency arbitra - tors are recognised as binding, and can be enforced
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