MALAYSIA Trends and Developments Contributed by: Rabindra S. Nathan, Rodney Gomez, K. Shanti Mogan and Alexius Lee, Shearn Delamore & Co
the arbitration agreement itself but also by the issues raised in the parties’ pleadings. Since GKL had specif - ically pleaded that its liability was capped at USD200 million and SSPC had disputed that position, it was held that the High Court erred in not perusing the pleadings so as to ascertain the terms and scope of submission to the arbitration with regard to GKL’s limit of liability under the contract. Interestingly, the award was not set aside but was varied under Sections 37 (3) and 39 (3) of the AA to sever the offending portion of the award. As a result, GKL’s liability was limited to USD200 million, and the remainder of the award remained enforceable.
The decision is significant because it demonstrates that Malaysian courts may intervene where an arbi - tral tribunal exceeds the limits of the parties’ agreed submission to arbitration. At the same time, the Court reaffirmed the principle of minimal judicial intervention by preserving the valid portions of the award rather than setting it aside in its entirety. The foregoing shows that the Malaysian courts con - tinue to support and uphold arbitration proceedings and awards, demonstrating Malaysia’s commitment to providing a fair and reliable environment for business, including in cross-border trade.
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