If you have signed a credit card contract, a health insurance application, or a variety of other contracts, you have probably already agreed to arbitration without even knowing it. Arbitration clauses are found in an assortment of different agreements and often require parties to use arbitration to resolve any disputes arising out of the contract.
Arbitration is a less formal way for parties to resolve legal disputes outside of the court system. It aims to provide fair and unbiased resolution to disputes without causing needless delay or expenses.In arbitration, each party has the right to be represented by an attorney, but may proceed without one. Rather than going to court, in arbitration both parties present evidence to an arbitrator who follows the provisions of the arbitration agreement and the rules of the administrator when making a decision. Arbitrators are deemed judges and their rulings are equivalent to any judicial award.
The choice to arbitrate may be exercised at any time, even after the dispute has occurred. The conditions to arbitrate are (1) the parties’ expressed consent and (2) the subject matter of the controversy must be capable of arbitration according to the venue’s arbitration law.
Businesses need cost-effective and timely solutions in resolving contractual disputes, especially when it involves payment issues such as money owed, goods sold or services rendered.This is where arbitration plays its role, providing these advantages:
- Choice. Liberty to select one or three arbitrators who specialise in their own areas of expertise. For example, parties can choose a technical person as arbitrator if the dispute is of a technical nature so that the evidence will be more readily understood.
- Convenient. Arbitration can usually be heard sooner than it takes for court proceedings to be heard. The arbitration hearing is briefer, and the preparation work less demanding compared to conventional litigation.
- Confidential. Arbitration hearings are private meetings in which the media and public are not allowed to attend. Final decisions are not published and this is pertinent in cases where confidentiality is essential.
- Cost-Effective. Arbitration involves lower costscompared to litigation.
- Enforceability.Due to the provisions of the New York Convention 1958,in cross border cases, enforcement of arbitration award in other countries is generally easier than a court’s judgement.
Arbitration Act 2005
Arbitration proceedings in Malaysia are governed by the Arbitration Act 2005 based substantially on the UNCITRAL model law. This Act only applies to arbitrations commencing after 15 March 2006. Arbitrations that commenced prior to this date are governed by the Arbitration Act 1952.
According to this Act, courts may not intervene in any arbitration, except in specific cases. The Act distinguishes indeed between domestic and international arbitrations (where one of the parties has its place of business outside Malaysia, or where the seat of the arbitration is outside Malaysia or where outside Malaysia the substantial part of the obligations of any commercial or other relationship is performed or the place where the subject matter of the dispute is most closely connected with). It provides for stronger court supervision over domestic arbitrations than over international arbitrations but the parties may choose to treat a local arbitration as an international arbitration (and conversely). For international arbitrations and unless the parties agree otherwise, the supervisory jurisdiction of the courts is restricted to those situations set out in the model law. In any case, the courts have no general rights to supervise either domestic or international arbitrations.
to read more on the Arbitration Act 2005
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One of the essential requirements for dispute resolution through arbitration is the existence of an arbitration agreement between the parties. An arbitration agreement must be in the form of an arbitration clause in an agreement or in the form of a supplementary agreement.
KLRCA’s model clause, which is recognisable and enforceable internationally, is as follows:
“Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or invalidity thereof shall be settled by arbitration in accordance with the Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration.”
Parties wishing to substitute an existing arbitration clause for one referring the dispute to arbitration under the Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration may adopt the following form of agreement:
“The parties hereby agree that the dispute arising out of the contract dated ______ shall be settled by arbitration under the Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration.”
This form may also be used where a contract does not contain an arbitration clause.
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On 15th August 2010, KLRCA became the first arbitration centre in the world to adopt the UNCITRAL Arbitration Rules as revised in 2010.
The Kuala Lumpur Regional Centre for Arbitration initially adopted, with modification the UNCITRAL Arbitration Rules 1976, which has been recommended by the United Nations General Assembly by its Resolution No. XXXI 98 adopted on the 15th December 1976, and has been widely accepted by the international community. The Rules provide guidelines on the arbitration process and must be adhered to ensure validity of the arbitration proceeding. It is recognised as one of the most successful international instruments of a contractual nature in the field of arbitration and has been used for the settlement of a broad range of disputes, including disputes between private commercial parties where no arbitral institution is involved, commercial disputes administered by arbitral institutions, investor-state disputes and state-to-state disputes. They have also been adopted by numerous arbitral institutions as their institutional rules.
On 25 June 2010, the United Nations Commission on International Trade Law adopted the revised UNCITRAL Arbitration Rules, which came into effect on 15 August 2010. They include additional provisions dealing with, for example, multiple-party arbitration and joinder, liability, and a procedure to object to experts appointed by the arbitral tribunal. A number of innovative features aim to enhance procedural efficiency, including revised procedures for the replacement of an arbitrator, a requirement for reasonableness of costs and a mechanism for reviewing the costs of arbitration.
Certain modifications and adaptations have been made in the Rules for Arbitration of Regional Centre for Arbitration Kuala Lumpur, and on 15 August 2010, KLRCA has become the first arbitration centre to adopt the new arbitration rules incorporating the UNCITRAL Arbitration Rules as revised in 2010.
Rules for Arbitration of the Kuala Lumpur Regional Centre for Arbitration (as revised in 2010)
KLRCA Fast Track Rules 2nd Edition 2012
Arbitration Act 2005 (As Amended in 2011)
Akta Timbang Tara 2005
Akta Timbang Tara (Pindaan) 2011
Arbitration (Amendment) Act 2011
*Please email firstname.lastname@example.org if you have any questions about the rules.
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The fees and charges for conference/meeting rooms at KLRCA are fixed, making it cost effective. Such fees and charges will be borne by the parties in such proportion as may be determined by the arbitral tribunal.
KLRCA Rental Fees (34.0KB)
The fees of arbitrator will be fixed in each case in accordance with the relevant schedule of fees under the Kuala Lumpur Regional Centre for Arbitration Rules.
Schedule of Fees for International Arbitration (45.8KB)
Schedule of Fees for Domestic Arbitration (48.1KB)
All payments should be made in favour of the Kuala Lumpur Regional Centre for Arbitration
to the following account:-
|Name of Bank:
Jalan Sultan Ismail,
50250 Kuala Lumpur
||5143 5680 7190
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