10 Dec Arbitration Act 2005: Malaysia Joins the Model Law Arbitration Community – Law Review 2006

Arbitration is an important part of commercial life and every legal system must to some degree be concerned with it. The business and arbitral communities in Malaysia had long clamoured for a total revision and updating of the Arbitration Act 1952. Malaysia’s arbitration legislation has now seen a major overhaul with the passing of the Arbitration Act 2005.

The Arbitration Act 2005, Act 646 (the new Act) received the Royal Assent on December 30, 2005 and was published in the Gazette on December 31, 2005. The Minister has fixed the commencement date as March 15, 2006 and thus, the current 1952 Act (the old Act) will only continue to apply to arbitrations which have already commenced, and the new Act will apply to all other arbitrations. It is therefore timely for practitioners in the arbitration field to take a close look at the new Act. In what material ways does the new Act depart from the old?

Following the pattern of the time, the old Act was based almost word for word on the English Arbitration Act of 1950. While the old Act had the merits of simplicity and clarity, it was long outdated. With the increasing emphasis on arbitrations, there was more and more judicial grist exposing the infirmities, shortcomings and lacunae found in the old Act. It has remained virtually unchanged for over half a century; the major amendments made by the English Acts of 1979 and 1996 and similar Acts in other common law countries have upto now escaped us.