MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
11. Review of an Award 11.1 Grounds for Appeal
on the arbitral tribunal by the parties in the agreement to arbitrate. Reliefs that form part of the exclusive jurisdiction of the court pursuant to statute may not be granted by an arbitral tribunal, even if the arbitral tribunal may decide on the subject matter of the dispute (see the UK Court of Appeal decision in Fulham Football Club ( 1987 ) Ltd v Richards and another [2011] EWCA Civ 855. The English position is also adopted in the Malay - sian Federal Court case of Arch Reinsurance Ltd v Akay Holdings Sdn Bhd [2019] 5 MLJ 186. 10.3 Recovering Interest and Legal Costs Parties are entitled to recover interest and legal costs in an arbitration, especially where such entitlements are expressly provided for in the arbitration agree - ment. The arbitral tribunal has the discretion to award simple or compound interest from such date, rate and rest as the arbitral tribunal considers appropriate. The interest granted may also be for: • any period, ending no later than the date of pay - ment; • of the whole or any part of sums awarded by the arbitral tribunal; • sums paid before the date of the award; or • costs awarded or ordered by the arbitral tribunal in the arbitral proceedings. The AA 2005 does not limit the grant of interest to simple interest or compound interest. This is dealt with in accordance with underlying contract and the substantive law. The general principle in relation to the award of costs is for the arbitral tribunal to order costs in favour of the successful party and to award all reasonable costs incurred by that party during the arbitration. This would generally include legal fees and disburse - ments reasonably incurred by the party in respect of the arbitration. The AIAC Arbitration Rules 2026 expressly recognise the tribunal’s power to determine arbitration costs, legal expenses and apportionment, including in fund - ed arbitrations.
An arbitral award made by an arbitral tribunal pursu - ant to an arbitration agreement is final, binding and conclusive, and is not appealable based on questions of fact or law. The limited circumstances in which an arbitral award may be set aside are on the following grounds: • a party to the arbitration agreement was under any incapacity; • the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the laws of Malaysia; • the party making the application was not given proper notice of the appointment of an arbitrator or the arbitral proceedings, or was otherwise unable to present their case; • the award deals with a dispute that is not contem - plated by or does not fall within the terms of the submission to arbitration; • the award contains decisions on matters that are beyond the scope of the submission to arbitration; • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties; • the subject matter of the dispute is not capable of settlement by arbitration under the laws of Malay - sia; or • the award is in conflict with the public policy of Malaysia (see Section 37 AA 2005). These grounds are exhaustive (see Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd and another appeal [2021] 1 MLJ 1). In MRCB Builders Sdn Bhd v Thien Hong Machin- ery ( M ) Sdn Bhd [2026] MLJU 263, the High Court dismissed an application to set aside an award on jurisdiction and public policy grounds. The applicant argued that the tribunal exceeded its jurisdiction by deciding claims arising from 11 invoices which alleg - edly fell outside the lease agreements containing the arbitration clauses. The Court rejected the challenge because the invoices formed part of the dispute referred to arbitration, and the applicant had partici -
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