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KCLRA revises Rules to incorporate international trends and best practices

Anne Foster

06 November 2013
On 24 October 2013 the Kuala Lumpur Regional Centre for Arbitration (KLRCA) unveiled its revised Rules.  According to the Director of the KLRCA, Datuk Sundra Rajoo, the revisions to the Rules (which comprise the KLRCA Arbitration Rules, the KLRCA i-Arbitration Rules and the KLRCA Fast Track Rules) are "evidence of KLRCA's determination to keep abreast with both global and national developments of alternative dispute resolution.  KLRCA has retained the essence of the Rules, and the modifications have been made with the sole intention of lifting Malaysia to the same competitive ranks as the best that the Asia-Pacific region can offer."

To attract parties from overseas to arbitrate at the KLRCA, the 2013 Rules have been translated into Arabic, Spanish, Korean, Mandarin, Bahasa Malaysia and Bahasa Indonesia.

The 2013 revisions follow on from the previous revision to the Rules made in 2012.  They also follow on from the recent passing in September 2013 by the Malaysian Parliament of the Legal Profession (Amendment) Act 2013 which removes the prohibition against foreign lawyers staying in the country for more than 60 days and dispenses with the need for foreign lawyers to obtain immigration approval to enter Malaysia for the purposes of arbitration proceedings.

The substantive changes to the KLRCA Arbitration Rules are:

  • The introduction of an emergency arbitrator procedure to assist parties requiring urgent interim relief prior to the appointment of the arbitral tribunal (Rule 7)
  • The ability to consolidate or have concurrent hearings of multiple arbitration proceedings with the consent of the parties (Rule 8)
  • The extension of an arbitrator's authority to grant interest on sums awarded for the whole or any part of the period between the date on which the cause of action arose and the date on which the award was made (Rule 11(8)
  • The enhancement of the confidentiality restrictions to matters in the public domain or where disclosure is required by law (Rule 15).

The i-Arbitration Rules provide for the resolution of disputes which arise from commercial transactions that may contain Shari 'ah elements or are premised on Shari 'ah principles.  As well as introducing the same changes as the KLRCA Arbitration Rules on the appointment of an emergency arbitrator, consolidation of proceedings and confidentiality, the i-Arbitration Rules have also been amended to:

  • Broaden the procedure for referral to a Shari 'ah expert by removing any reference to a particular jurisdiction – this is aimed at assisting parties to international arbitrations (Rule 11)
  • Introduce an optional mechanism in a Shari 'ah related dispute which enables the tribunal to award compensation to parties for late payment of an award by applying the principles of ta'widh and gharamah (Rule 12(8)(a).

The KLRCA released the second edition of the KLRCA Fast Track Arbitration Rules in 2012.  These laid down procedures to enable parties to fast track the resolution of their disputes over a 160 day period.  The KLRCA has now sought to streamline and increase efficiency in the process further by:

  • Reducing timelines – requests for extensions of time must now be made before expiry of a time limit
  • Allowing the Director of the KLRCA to appoint a sole arbitrator where parties to the Fast Track Arbitration have failed to reach agreement in writing within seven days of service of the Notice of Arbitration.

The KLRCA has also revised its schedule of fees and administrative costs in an effort to maintain the KLRCA's costs advantage over the other arbitration centres in the region such as SIAC and HKIAC.

The KLRCA is aiming to increase its case load to around 250 cases a year by 2016.  Its ability to handle this volume of arbitrations will be improved by its move next year to the Sulaiman Building in Kuala Lumpur which will have 19 hearing rooms and associated facilities.

The revised Rules apply to KLRCA arbitrations commenced on or after 24 October 2013.

Anne Foster

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