The Arbitration Rules like Rules of Court (“ROC”) are often designed to set the directions for the parties to manage their disputes effectively and painlessly. The parties gain confidence in a dispute resolution process through procedural transparency, and predictability of steps to be taken by each party, including the tribunal. In a dynamic world with increasing interactions in virtual forums, devoid of place and time, the rules and procedures for ADR proceedings, ought to be adaptable to the constantly changing world. Hats-off to the Directorate and the Secretariat of AIAC for paving the way for smooth and steady transition, from pandemic period to new world order of virtual hearings and virtual case management. The launch of the AIAC Arbitration Rules 2021 (the “Rules”) on 1 August 2021, marks the readiness of Malaysia boldly facing the challenges of continuing disruptions in the industry and economies worldwide.
The timing for the launch of Rules 2021 is also significant by the fact that these Rules will be subjected to acid test and scrutiny, by the upcoming generation of 1000+ legal sleuths and lawyers from across the world, participating in the 29th Willem C. Vis International Commercial Arbitration Moot 2022. The law professors and coaches guiding their teams of lawyers, from countries with diversity of legal regimes (Civil Law, Common Law and Shariah Law), will be studying the Moot Problem and applying these Rules, from October 2021 till April 2022 to compete for the grand prize. Moreover, it will be the first time that Arbitration Rules of AIAC Malaysia have been selected for this prestigious Moot (also known as International Young Lawyers Olympics), in applying CISG (UN Convention on Contracts for the International Sales of Goods) and AIAC Arbitration Rules.
What is New?
A quick glance from user’s perspective, without going into the details of each new provision and amendments, which will be available in a Commentary to be published by AIAC, the following are some quick-wins and noteworthy changes.
At first glance users of the past Arbitration Rules 2018 will notice the appealing Format and logical structure of the Rules 2021. The mix of Rules 2018 and Articles of UNCITRAL Arbitration Rules 2013, have been transformed as one set of Rules 2021. It will be easier for referencing, interpretation and implementation.
Consolidation of Types of Proceedings
The Fast-Track Procedure and Emergency Arbitration Rules are within the Arbitration Rules 2021. This avoids the need for cross-referencing and provides clarity on the best option available for the parties in dispute.
Third Party Funding
The parties are explicitly permitted if desired, for financing of arbitration costs by use of third-party funding, subject to the laws of a competent jurisdiction.
Summary determination procedure incorporated under the new Rules will certainly be useful for the parties to focus on real issues in dispute and avoid wastage of time and cost on arbitrary matters. The parties may even seek a consent award on specific issues, prior to publishing of a final award.
The procedure for Joinder of third parties and Consolidation of multiple arbitration proceedings, is finetuned and conducive for parties engaged in a construction project, to save time and cost for managing disputes with sub-contractors, vendors and clients under one arbitration.
Benefits for the Parties
The new Rules 2021 are clearly introduced for the benefit of the parties to speedily resolve their disputes while keeping the costs under check.
- The parties are encouraged and are free to opt for Mediate-First under AIAC Mediation Rules at a nominal cost. In the event mediation is unsuccessful, half of the AIAC’s mediation cost will be credited towards the Arbitration Administration cost.
- The fee of the tribunal remains unchanged at the same level as per the 2018 Rules, despite rising costs.
- With the increasing use of virtual hearings which are now explicitly permitted under the new Rules, it will help parties to save costs of travel, hearing room booking and hotels.
- AIAC Malaysia, remains the most attractive and cost-effective forum for arbitration due to very competitive fees of the solicitors and senior counsel in Malaysia, with world class quality and professional standards of legal expertise.
- The international parties are at liberty to adopt AIAC Arbitration Rules 2021 when a dispute arises, even if it was not provided in their contracts.
The more details about the Rules 2021 and its implementation in the arbitration matters registered after 1 August 2021, would be available during the Asia ADR Week 2021 events. In conjunction with the official launch of the all-new and improved AIAC Arbitration Rules 2021 can be accessed here: https://bit.ly/AIACArbRules2021.
In conclusion, the launch of AIAC Arbitration Rules 2021 is very timely to meet the need of the hour, with genuine desire at heart for safeguarding the interests of the litigating parties.