Issue 9 (6/21)
The independence from courts in arbitration proceedings is the salient factor for parties to opt for arbitration. Minimum judicial intervention and maximum judicial support has been the longstanding rule in almost all known safe seat for arbitrations.
In the Malayan Law Journal publication entitled “The Extent of Court Intervention in Arbitration in Malaysia as a Model Law Jurisdiction [2021] 2 MLJ cccxxiv” I explore the limitation of the powers of the court to intervene in arbitration proceedings and the extent the UNCITRAL Model and the Arbitration Act 2005 limits the powers of the court, followed by the application of Section 8 of the Arbitration Act by the Malaysian courts.
Article 5 of the UNCITRAL Model Law provides that the courts will not intervene in matters governed under this Law unless expressly stated. Section 8 of the Arbitration Act 2005 as amended in 2011 and 2018 mirrors Article 5 of the UNCITRAL but the 2011 amendment went the extra mile to strengthen the independence of arbitration proceedings by limiting the application of other laws both statutory and inherent that fall outside the Arbitration Act. The Act‘s primary objective is to uphold party’s autonomy by minimizing the courts intervention.
In a recent decision, the Federal Court in Far East Holdings Bhd & Anor v Majlis Ugama Islam dan Adat Resam Melayu Pahang and Other Appeals stated that Section 8 of the Arbitration Act 2005 does not exclude intervention for matters that do not fall under the Arbitration Act 2005 because unlike the UNCITRAL , the Arbitration Act includes provisions relating to stay of court proceedings and outlines the limited grounds where the courts can refuse to grant the stay of court proceedings.
The wording of Section 8 of is mandatory. The test to determine the court’s intervention is simply to consider whether the Act provides for the intervention in question. For matters that are not governed by the Act, the presumption is that the courts are not to intervene because if the legislature had intended to such effect this would have been reflected this in the express provision of the Arbitration Act. The courts should not usurp the functions of the Arbitration tribunal and this is reflected in a series of Malaysian precedents that the courts are unlikely to interfere in arbitration matters.
The courts minimalist interference goes to mirror the UNCITRAL Model Law and bolster arbitration tribunals , upholding the principle of autonomy, confidentiality , commerciality and the multitude of reasons that drives parties to opt for arbitration in lieu of litigation.
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Datuk Professor Sundra Rajoo
President of the Asian Institute of Alternative Dispute Resolution (AIADR)
14th June 2021.
Disclaimer: This Brevi Nota does not and is not intended to constitute legal advice. All information, content, and materials are for general informational purposes only. © 2021 AIADR All Rights Reserved.
