MALAYSIA ARBITRATION ACT 2005
Have you read the Malaysia Arbitration Act 2005 to see how it can assist in resolving breach of agreements? Do you subscribe to Astro, TM, Digi, Maxis
or any other subscription service?
If you signed a contract form with these
organizations you probably have already signed to an arbitration agreement even
if you did not read the whole document before signing to it. Of course, the
contract with your educational institution is one contract that surely would
contain an arbitration agreement.
This discussion of the Malaysia Arbitration Act 2005
will focus on its benefits to tertiary students in Malaysia. So what is
Arbitration and how does the Malaysia Arbitration Act 2005 relate to tertiary students
Definition of Arbitration
Arbitration is a process of conflict
resolution outside the formal court system to resolve issues with conflicting
parties using an arbitrator. An arbitrator is a person chosen by conflicting
parties to preside over and resolve a conflict that have arisen between the
parties (Malaysia Arbitration Act 2005).
Reasons for Arbitration
- Low cost - involves less money compared to the cost
- Confidentiality –
arbitration hearings are usually carried out where the public and media
are not privy to the hearings
- Time investment –
arbitration hearings and arrangements are usually faster and sooner
compared to court hearings and proceedings. Documentations are usually
shorter and less time demanding to complete.
- Choice – provides the
liberty for the parties to choose their judges called arbitrators.
(Kuala Lumpur Regional Center for Arbitration, 2012).
Conditions for arbitration
The Kuala Lumpur Center for Arbitration (KLRCA) (2012) highlights the following conditions that must be satisfied for arbitration to occur:
- The parties to the
disagreement/misunderstanding/ conflict consent to the arbitration process
- The matter under
controversy and venue of the incident should be capable of arbitration within
the existing arbitration laws
The Malaysian Arbitration Act 2005 specifies that parties are in
agreement to an arbitration when:
1. There is a document that contains an
arbitration agreement clause, in writing and signed by the parties.
2. There is an exchange of
fax, mail and other communications providing a record of the agreement.
3. There is a claim and defense among conflicting parties where one party makes
reference to an agreement that is not denied by the other party
(Chapter 2- section
Provisions of the Malaysia Arbitration Act 2005
The following provisions are included in the Arbitration Act 2005:
- Arbitration may be
domestic or international. Domestic arbitration involves businesses that
are primarily operating and conducting business in Malaysia. This is more
relevant to tertiary students in Malaysia (Part 1-section 2).
- Any matter is subject
to arbitration where the parties consent to an arbitration agreement
unless contrary to public policy (Part 1-section 4).
- The fact that
written laws confer jurisdiction to a matter by a court of law and does
not refer to arbitration does not mean that a matter cannot be determined
by arbitration (Part 1-section 4).
- The arbitral
tribunal has powers to determine the relevance, admissibility and weight
of evidence, give security for cost, order evidence to be given under oath
and make other orders as may be appropriate (Part 2- chapter 5- section
- The arbitral
proceedings may be carried out using the language agreed upon by the parties.
Where there is disagreement between the conflicting parties the arbitral
tribunal will decide on the language to be used (Part 2- chapter 5-
- All awards arising
from domestic arbitration will be carried out with regard to the
substantive laws of Malaysia (Part 2, chapter 6 section 30).
- An award by an
arbitral tribunal is final and binding pursuant to the arbitral agreement
and may be used for any other proceedings in any court (Part 2, chapter 6-
- An allowance of thirty
days (30) is provided after an award for any party to seek correction
and/or interpretation of any part of the award (Part 2, chapter 6- section 35).
Implications for tertiary students in Malaysia
- Tertiary students
in Malaysia should be aware and careful when signing contracts and should
ensure that if there are conflicts the arbitration clause they are signing
to affords them arbitration where they can easily seek redress.
- If and when conflicts
occur with any organization or business in Malaysia,
an arbitral tribunal offers a less expensive resolution process than a
formal court system.
- Whenever you can, when
entering into agreements with others include an arbitration clause
specifying whose country’s laws will be used in resolving the conflict in
addition to the penalties for breach of the agreement. A simple inclusion of
a domestic arbitration agreement clause can be written as follows:
“Any dispute, controversy or misunderstanding,
breach or termination of this agreement shall be settled by arbitration in
accordance with the applicable laws in force in Malaysia”.
- Wherever possible
employ the services of an attorney (lawyer) to represent you in an arbitration
How to proceed with a breach of agreement
- Notify the other
party (individual or organization) of the perceived breach with reference
to the agreement in writing or through any communication means that can be
recorded and retrieved.
- Allow time for the
other party to respond and effect correction if possible.
- Where the other
party responds too slowly, responds irresponsibly or refuses to respond,
consult an attorney (lawyer) for advice.
- If possible and as
a first alternative file a case against the other party in an arbitral
tribunal. The Kuala Lumpur Regional Centre for Arbitration (KLRCA) is one
authority that can preside over arbitration requests in Malaysia
especially if no arbitration authority was mentioned in your agreement.
The Malaysia Arbitration Act 2005 is a provision by
the Malaysian government to resolve disputes in a less costly, convenient and
confidential manner. SO USE IT. We encourage you to exhaust other options at
resolving your conflict personally but when such attempts fail or is heading nowhere,
don’t be the victim. Go ahead and file a complaint to the tribunal and seek
Malaysia Arbitration Act 2005
Kuala Lumpur Regional Center for Arbitration
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