Notes on the Arbitration Amendment (No. 2) Act 2018

by Admin ~ 8 May 2018

Notes on the Arbitration Amendment (No. 2) Act 2018

The Malaysian Parliament has passed the Arbitration Amendment (No. 2) Act 2018 (the “Amendment Act”), which is aimed at boosting Malaysia’s reputation as a safe place and arbitrary-friendly jurisdiction.

Significant amendments to the Arbitration Act 2005 (“AA 2005”) include:

  • An expansion to the definition of an arbitral tribunal under Section 2 AA 2005 to include ‘emergency arbitrator’, thereby ensuring that decisions rendered by emergency arbitrators are recognised;

  • A categorical extension to the definition of an arbitration agreement to include validly concluded arbitration agreements through any electronic communication, such as emails and faxes;

  • The introduction of powers available to the arbitral tribunal to grant pre-award interest;

  • The introduction of supplementary powers available to an arbitral tribunal to grant interim measures, such as the prevention of actions which could cause harm or prejudice to the arbitral process, as well as the preservation of evidence and assets; and

  • The enhancement of confidentiality to include all court proceedings falling within the purview of the AA 2005. The newly introduced Section 41B provides that all proceedings shall not be heard in open court except where the court determines that it should be heard in open court, or through an application by one party.

Notably, the Amendment Act has now removed the right of a party to apply to the High Court to review the decision of the arbitral tribunal, thereby augmenting the finality of arbitration awards. This therefore removes the current uncertain and differing threshold to successfully review the award rendered by arbitral tribunals.