CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS ACT 1985

LAWS OF MALAYSIA Act 646 ARBITRATION ACT 2005 2 Date of Royal Assent Laws of Malaysia ... 30 December 2005 Date of publication in the Gazette ... ... ... 31 December 2005 ACT 646 Publisher’s Copyright C PERCETAKAN NASIONAL MALAYSIA BERHAD All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording and/or otherwise without the prior permission of Percetakan Nasional Malaysia Berhad (Appointed Printer to the Government of Malaysia). Arbitration LAWS OF MALAYSIA Act 646 ARBITRATION ACT 2005 ARRANGEMENT OF SECTIONS PART I PRELIMINARY Section 1. Short title and commencement 2. Interpretation 3. Application to arbitrations and awards in Malaysia 4. Arbitrability of subject-matter 5. Government to be bound PART II ARBITRATION Chapter I General provisions 6. Receipt of written communications 7. Waiver of right to object 8. Extent of court intervention Chapter 2 Arbitration agreement 9. Definition and form of arbitration agreement 10. Arbitration agreement and substantive claim before court 11. Arbitration agreement and interim measures by High Court 3 4 Laws of Malaysia Chapter 3 Composition of arbitrators Section 12. Number of arbitrators 13. Appointment of arbitrators 14. Grounds for challenge 15. Challenge procedure 16. Failure or impossibility to act 17. Appointment of substitute arbitrator Chapter 4 Jurisdiction of arbitral tribunal 18. Competence of arbitral tribunal to rule on its jurisdiction 19. Power of arbitral tribunal to order interim measures Chapter 5 Conduct of arbitral proceedings 20. Equal treatment of parties 21. Determination of rules of procedure 22. Seat of arbitration 23. Commencement of arbitral proceedings 24. Language 25. Statements of claim and defence 26. Hearings 27. Default of a party 28. Expert appointed by arbitral tribunal 29. Court assistance in taking evidence Chapter 6 Making of award and termination of proceedings 30. Law applicable to substance of dispute 31. Decision making by panel of arbitrators 32. Settlement ACT 646 Arbitration Section 33. Form and contents of award 34. Termination of proceedings 35. Correction and interpretation of award or additional award 36. An award is final and binding Chapter 7 Recourse against award 37. Application for setting aside Chapter 8 Recognition and enforcement of awards 38. Recognition and enforcement 39. Grounds for refusing recognition or enforcement PART III ADDITIONAL PROVISIONS RELATING TO ARBITRATION 40. Consolidation of proceedings and concurrent hearings 41. Determination of preliminary point of law by court 42. Reference on questions of law 43. Appeal 44. Costs and expenses of an arbitration 45. Extension of time for commencing arbitration proceedings 46. Extension of time for making award PART IV MISCELLANEOUS 47. Liability of arbitrator 48. Immunity of arbitral institutions 49. Bankruptcy 50. Mode of application 51. Repeal and savings 5 6 Laws of Malaysia ACT 646 7 Arbitration LAWS OF MALAYSIA Act 646 ARBITRATION ACT 2005 An Act to reform the law relating to domestic arbitration, provide for international arbitration, the recognition and enforcement of awards and for related matters. [ ] ENACTED by the Parliament of Malaysia as follows: PART I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Arbitration Act 2005. (2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette. Interpretation 2. (1) In this Act, unless the context otherwise requires— “award” means a decision of the arbitral tribunal on the substance of the dispute and includes any final, interim or partial award and any award on costs or interest but does not include interlocutory orders; 8 Laws of Malaysia ACT 646 “High Court” means the High Court in Malaya and the High Court in Sabah and Sarawak or either of them, as the case may require; “Minister” means the Minister charged with the responsibility for arbitration; “State” means a sovereign State and not a component state of Malaysia, unless otherwise specified; “presiding arbitrator” means the arbitrator designated in the arbitration agreement as the presiding arbitrator or chairman of the arbitral tribunal, a single arbitrator or the third arbitrator appointed under subsection 13(3); “arbitration agreement” means an arbitration agreement as defined in section 9; “party” means a party to an arbitration agreement or, in any case where an arbitration does not involve all the parties to the arbitration agreement, means a party to the arbitration; “seat of arbitration” means the place where the arbitration is based as determined in accordance with section 22; “international arbitration” means an arbitration where— (a) one of the parties to an arbitration agreement, at the time of the conclusion of that agreement, has its place of business in any State other than Malaysia; (b) one of the following is situated in any State other than Malaysia in which the parties have their places of business: (i) the seat of arbitration if determined in, or pursuant to, the arbitration agreement; (ii) any place where a substantial part of the obligations of any commercial or other relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or (c) the parties have expressly agreed that the subject-matter of the arbitration agreement relates to more than one State; Arbitration 9 “domestic arbitration” means any arbitration which is not an international arbitration; “arbitral tribunal” means a sole arbitrator or a panel of arbitrators. (2) For the purposes of this Act— (a) in the definition of “international arbitration”— (i) where a party has more than one place of business, reference to the place of business is that which has the closest relationship to the arbitration agreement; or (ii) where a party does not have a place of business, reference to the place of business is that party’s habitual residence; (b) where a provision of this Act, except sections 3 and 30, leaves the parties free to determine a certain issue, such freedom shall include the right of the parties to authorize a third party, including an institution, to determine that issue; (c) where a provision of this Act refers to the fact that the parties have agreed or that they may agree or in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules referred to in that agreement; (d) where a provision of this Act refers to a claim, other than in paragraphs 27(a) and 34(2)(a), it shall also apply to a counterclaim, and where it refers to a defence, it shall also apply to a defence to that counterclaim. Application to arbitrations and awards in Malaysia 3. (1) This Act shall apply throughout Malaysia. (2) In respect of a domestic arbitration, where the seat of arbitration is in Malaysia— (a) Parts I, II and IV of this Act shall apply; and (b) Part III of this Act shall apply unless the parties agree otherwise in writing. 10 Laws of Malaysia ACT 646 (3) In respect of an international arbitration, where the seat of arbitration is in Malaysia— (a) Parts I, II and IV of this Act shall apply; and (b) Part III of this Act shall not apply unless the parties agree otherwise in writing. (4) For the purposes of paragraphs (2)(b) and (3)(b), the parties to a domestic arbitration may agree to exclude the application of Part III of this Act and the parties to an international arbitration may agree to apply Part III of this Act, in whole or in part. Arbitrability of subject-matter 4. (1) Any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration unless the arbitration agreement is contrary to public policy. (2) The fact that any written law confers jurisdiction in respect of any matter on any court of law but does not refer to the determination of that matter by arbitration shall not, by itself, indicate that a dispute about that matter is not capable of determination by arbitration. Government to be bound 5. This Act shall apply to any arbitration to which the Federal Government or the Government of any component state of Malaysia is a party. Arbitration 11 PART II ARBITRATION Chapter 1 General provisions Receipt of written communications 6. (1) Unless otherwise agreed by the parties— (a) a written communication is deemed to have been received if it is delivered to the addressee personally or if it is delivered at his place of business, habitual residence or mailing address; and (b) where the places referred to in paragraph (a) cannot be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee’s last known place of business, habitual residence or mailing address by registered post or any other means which provides a record of the attempt to deliver it. (2) Unless otherwise agreed by the parties, a written communication sent electronically is deemed to have been received if it is sent to the electronic mailing address of the addressee. (3) The communication is deemed to have been received on the day it is so delivered. (4) This section shall not apply to any communications in respect of court proceedings. Waiver of right to object 7. A party who knows— (a) of any provision of this Act from which the parties may derogate; or (b) that any requirement under the arbitration agreement has not been complied with, 12 Laws of Malaysia ACT 646 and yet proceeds with the arbitration without stating its objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived its right to object. Extent of court intervention 8. Unless otherwise provided, no court shall intervene in any of the matters governed by this Act. Chapter 2 Arbitration agreement Definition and form of arbitration agreement 9. (1) In this Act, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in an agreement or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing where it is contained in— (a) a document signed by the parties; (b) an exchange of letters, telex, facsimile or other means of communication which provide a record of the agreement; or (c) an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other. (5) A reference in an agreement to a document containing an arbitration clause shall constitute an arbitration agreement, provided that the agreement is in writing and the reference is such as to make that clause part of the agreement. Arbitration 13 Arbitration agreement and substantive claim before court 10. (1) A court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds— (a) that the agreement is null and void, inoperative or incapable of being performed; or (b) that there is in fact no dispute between the parties with regard to the matters to be referred. (2) The court, in granting a stay of proceedings pursuant to subsection (1), may impose any conditions as it deems fit. (3) Where the proceedings referred to in subsection (1) have been brought, arbitral p