MALAYSIA Trends and Developments Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
Once a party was dissatisfied with the appointed officer’s decision, arbitration became the exclusive dispute resolution mechanism. The decision is also significant because it clari - fies the binding effect of arbitration agreements on downstream contractors. Although SKSB was not an original party to the second subcontract, the Court held that it had expressly adopted all the rights and obligations under that subcontract when it assumed the position of the original subcontractor. The Court further recognised that arbitration agreements may be incorporated by way of general reference without the strict requirement of specific reference or explicit mention of the arbitration clause. Holistic Approach in Determining What Amounts to “Any Other Steps in the Proceedings” The Federal Court in Universiti Malaya v Esa Jurutera Perunding Sdn Bhd [2026] MLJU 2093 provided clar - ity on what amounts to “any other steps in the pro - ceedings” under Section 10 (1) of the AA, which may consequently amount to a waiver of a party’s right to refer disputes to arbitration. Before this decision, the authorities were divided on whether certain procedur - al steps amounted to a waiver of the right to arbitrate. The Federal Court held that the issue is not to be determined by a rigid or purely technical rule. Rather, the enquiry is a fact-sensitive and holistic one, direct - ed at whether the defendant’s conduct demonstrates a clear and unequivocal intention to abandon its rights for arbitration and submit instead to the court’s juris - diction. The Federal Court held that an express res - ervation of rights is an important indication but does not displace the need to examine the party’s overall conduct in the circumstances of the case. The court also reaffirmed that entering appearance remains a permitted procedural step and does not, by itself, amount to taking a step in the proceedings. As to the specific acts in question, which involves seeking extension of time to file a defence, the Federal Court held that this does not automatically amount to taking a step in the proceedings. What matters is the surrounding context, including whether the request was made merely to obtain documents, evaluate the claim, or ascertain whether arbitration should be
invoked. Likewise, the service of a Notice to Produce Documents Referred to in the Pleadings was held not to amount to a step in the proceedings where it was a necessary but peripheral act, purely investigative in nature, and did not advance the substantive merits of the dispute. Enforcement of Foreign Confirmation Judgments of Arbitral Awards Through the Reciprocal Enforcement of Judgments Act 1958 The Federal Court case of ING Bank NV and Another v Tumpuan Megah Development Sdn Bhd [2025] 6 MLJ 751 provides significant guidance on the modes of enforcement for foreign arbitral awards. In this case, the appellants obtained an arbitral award in London against the respondent arising from two commercial contracts, which the respondent denied existed. The arbitral tribunal rejected the respondent’s objections on jurisdiction and merits, and issued an award in favour of the appellants. The respondent neither com - plied with nor challenged the award. Instead of enforcing the arbitral award directly in Malaysia under the AA, the appellants first converted the award into a judgment of the English High Court and subsequently registered the judgment in Malaysia under the Reciprocal Enforcement of Judgments Act 1958 (REJA). The respondent applied to set aside the registration, alleging that the judgment was obtained without jurisdiction and by fraud. The respondent also sought a trial of issues that had already been deter - mined by the arbitral tribunal. The High Court dismissed the application as an abuse of process, but the Court of Appeal reversed the deci - sion, holding that allegations of lack of jurisdiction and fraud should be heard afresh by the Court and that enforcement should have been pursued exclu - sively under the AA pursuant to Section 8 thereof. The appellants then appealed to the Federal Court. The Federal Court clarified that there are two separate and distinct statutory avenues for the enforcement of foreign arbitral awards in Malaysia: • direct enforcement under the AA; and • enforcement of a foreign judgment (confirmation judgment) under the REJA, where the award has
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