MALAYSIA Law and Practice Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
13. Miscellaneous 13.1 Class Action or Group Arbitration The possibility of class action arbitration or group arbi - tration remains untested in Malaysia. 13.2 Ethical Codes It is implicit in the AA 2005 that an arbitrator must be impartial; the requirement to disclose any circum - stances that are likely to give rise to justifiable doubts regarding that person’s impartiality or independence makes this clear. Good faith requirements are also mandated by the AA 2005. Arbitrations pursuant to the AIAC are bound by the AIAC’s Code of Conduct for Arbitrators, which references the IBA Guidelines on Conflict of Interest in International Arbitration. Advocates and solicitors in Malaysia who act as coun - sel in arbitration proceedings remain bound by the ethical codes and professional standards governing advocates and solicitors contained in the Legal Pro - fession Act 1976. 13.3 Third-Party Funding Third-party funding is now expressly regulated under Sections 46A to 46I of the AA 2005, introduced by the Arbitration (Amendment) Act 2024. Maintenance and champerty no longer apply to third- party funding of arbitration, and such agreements are not contrary to public policy on those grounds. Where the funded party has made a third-party funding agreement, the funded party must disclose or com - municate to the other party to the arbitration and the arbitral tribunal or the court before which proceedings are brought in respect of the arbitration, as the case may be, the fact that a third-party funding agreement has been made and the name of the third-party funder in the third-party funding agreement. The disclosure or communication must be made, where the third-party funding agreement is made on or before the com - mencement of the arbitration or court proceedings in respect of the arbitration, upon the commencement of the arbitration or court proceedings or, where the third-party funding agreement is made after the com - mencement of the arbitration or court proceedings
sum is allegedly not due ( Southern HRC Sdn Bhd v Danieli Co , Ltd [2023] 2 CLJ 831). In the recent case of ING Bank NV v Tumpuan Megah Development Sdn Bhd [2025] MLJU 2449; [2025] 8 CLJ 873, the Federal Court clarified that a foreign arbi - tral award may be enforced in Malaysia through more than one route. The award creditors had obtained a London arbitral award, which was then entered as a judgment of the English High Court under Section 66 of the UK Arbitration Act 1996. They then sought to register that English judgment in Malaysia under the Reciprocal Enforcement of Judgments Act 1958 (REJA). The Federal Court held that they were not confined to enforcing the award directly under the AA 2005. Where an award has been converted into, or confirmed by, a judgment of a court in a reciprocating jurisdiction, that judgment may also be registered and enforced in Malaysia under REJA. The rationale is that the AA 2005 and REJA are separate regimes, and the AA 2005 does not impliedly repeal or override REJA. 12.3 Approach of the Courts The public policy considerations that domestic courts apply in refusing to enforce foreign arbitral awards are based not on domestic public policy but on interna - tional norms; conflict with public policy is defined as violating the most basic notions of morality and justice, or as that which would shock the public conscience or be injurious to the public good. Thus, instances such as “patent injustice”, “manifestly unlawful and unconscionable”, “substantial injustice”, “serious irregularity” and other similar serious flaws in the arbi - tral process and award would fall within the applicable concept of public policy ( Jan De Nul ( Malaysia ) Sdn Bhd v Vincent Tan Chee Yioun [2019] 2 MLJ 413). In Master Mulia Sdn Bhd v Sigur Rus Sdn Bhd [2020] 12 MLJ 198, the Malaysian Federal Court confirmed that the Malaysian courts may set aside an arbitra - tion award that was made in breach of natural justice, but this would only be done where the breach had material and causative effect on the outcome of the arbitration.
579 CHAMBERS.COM
Powered by FlippingBook