Tan Sri Dato’ Cecil W M Abraham Dato’ Sunil Abraham Aniz Ahmad Amirudin March 24 2022 Conducting arbitration in Malaysia: procedure Cecil Abraham & Partners | Arbitration & ADR - Malaysia Tan Sri Dato’ Cecil W M Abraham, Dato’ Sunil Abraham, Aniz Ahmad Amirudin Arbitration & ADR Basic procedural principles or mandatory rules to be applied by arbitral tribunalParty autonomy and arbitrators' power to determine procedureTribunal's power to issue procedural ordersOral hearing or proceeding on basis of written documentsLegal representationThis article is part of a series on conducting arbitration in Malaysia.(1)Basic procedural principles or mandatory rules to be applied by arbitral tribunal1952 ActThe Arbitration Act 1952(2) is silent on the issue of who should determine the procedure to be applied in arbitration. The principle of party autonomy dictates the procedure. Nevertheless, it is advisable for the parties to follow accepted and recognised arbitration rules.2005 ActArbitration procedure is provided for in sections 20 to 29 of the Arbitration Act 2005 (the 2005 Act). The procedures are largely a matter for the arbitrator to decide, subject to any agreements that have been reached by the parties as provided for in section 21.Party autonomy and arbitrators' power to determine procedureThe parties to an arbitration are free to agree on the applicable procedures in an arbitration, subject to overriding rules of fairness.(3) Where the parties have failed to determine this, however, the arbitral tribunal will have the prerogative to determine the matter of procedure,(4) which is considerably wide. The parties may choose institutional arbitration rules or conduct an ad-hoc arbitration. In the absence of an agreement between the parties on the procedure to be adopted in the conduct of the arbitration, the arbitrator may conduct the arbitration as they deem fit and avail themselves of all the powers conferred under section 21(3) of the 2005 Act.(5)Tribunal's power to issue procedural ordersWhere the parties cannot agree on the procedure, the arbitrator becomes the master of the procedure subject to the rules of natural justice.Oral hearing or proceeding on basis of written documentsNormally, hearings are held orally in respect of arbitrations unless the parties agree to a document-only arbitration. However, in the case of an arbitration under the 2005 Act as provided for in section 26, the tribunal can at their discretion hold an oral hearing or conduct the arbitration based on documents. The tribunal must hold an oral hearing if required by a party.Submissions and notificationsContents and form of submissionsSection 25 of the 2005 Act, which corresponds with article 23 of the United Nations Commission of International Trade Law Model Law, sets out the procedure for identifying the issues which are in dispute in a formal manner. There is provision for each party to state the facts supporting its claim or defence and also to submit documents and other references to the evidence relied upon. There are also provisions for the parties to amend their pleadings. In practice, arbitrators in Malaysia tend to follow the provisions of section 25 for parties to file "points of claim" followed by "points of defence and counterclaim" and other written pleadings. The purpose of the points of claim is to identify both the issues in dispute and the remedy required.Legal deadlines (provided by law or set by tribunal) and effect of non-complianceUnder section 27 of the 2005 Act, the tribunal can terminate proceedings if a claimant, without sufficient cause, fails to deliver its pleading within the time agreed by the parties or determined by the tribunal. However, if the respondent fails to deliver a defence, or if a party fails to appear at the hearing or produce documents, the tribunal may proceed with the arbitration and hand down an award.Statutory requirements as to notifications during arbitrationUnless the parties agree to the contrary, each party must be notified of the hearing. This would enable the parties to:effectively prepare their case;answer the case of the opponent (if any);appear at the hearing; andmake their representation.If a party is not aware that a hearing of the arbitration is going to take place, the arbitral proceedings cannot be properly conducted.If a meeting takes place before the oral hearing of the reference and one party is not given notice of the meeting and fails to attend, the award will not be invalidated provided that nothing was done at the meeting. If the proceedings are postponed for any reason, the arbitrator should communicate the date and time of the resumed hearing to all the parties and not leave it to one party to notify the other.Section 26(3) of the 2005 Act requires that the parties be given reasonable advance notice of any hearing or meeting of the arbitral tribunal for the purposes of inspection of goods, other property or documents. What is reasonable advance notice is dependent on the nature of the case and circumstances, such as the geographical distances involved.Legal representationThere is also no requirement that the parties need to be represented by legally qualified persons. As a result of amendments to the Legal Profession Act 1976, which came into effect in June 2014, there are no restrictions on international lawyers participating in arbitral proceedings held in the territory of Malaysia, except for arbitral proceedings held in the territory of the state of Sabah. In Samsuri bin Baharuddin & 813 Ors v Mohamed Azahari bin Matiasin (and Another Appeal), the Federal Court held that the Advocates Ordinance 1953(6) conferred an exclusive right to Sabah advocates that they alone could practise in Sabah, thus prohibiting foreign lawyers from representing parties to arbitration proceedings in Sabah.The Arbitration (Amendment) Act 2018 (No. 2) introduced section 3A of the 2005 Act, which provides that a party to arbitral proceedings may be represented in such proceedings by any representative appointed by that party, unless otherwise agreed by the parties. The interplay between section 3A and the decision of the Federal Court in interpreting the Advocates Ordinance 1953 remains to be seen.For further information on this topic please contact Tan Sri Dato' Cecil Abraham, Dato' Sunil Abraham, Aniz Ahmad Amirudin or Syukran Syafiq at Cecil Abraham & Partners by telephone (+60 3 2726 3700) or email ([email protected], [email protected], [email protected] or [email protected]). The Cecil Abraham & Partners website can be accessed at cecilabraham.com.Endnotes(1) For earlier articles in the series, see:"Conducting arbitration in Malaysia: doctrine of separability, jurisdiction and arbitrability";"Conducting arbitration in Malaysia: arbitral tribunals"; and"Conducting arbitration in Malaysia: law governing conduct".(2) For details of the current arbitration legislation in Malaysia, see "Introduction to arbitration in Malaysia: history and current legislation".(3) See Amalgamated Metal Corporation Ltd v Khoon Seng Co  2 Lloyd's Rep 310 at 317.(4) Arbitration Act 2005, s 21(2).(5) See Pancaran Prima Sdn Bhd v Iswarabena Sdn Bhd & Another Appeal  1 MLJ 1; Bumimetro Construction Sdn Bhd v Monday-Off Development Sdn Bhd & Other Cases  1 LNS 2137; Ragawang Corporation Sdn Bhd v. One Amerin Residence Sdn Bhd  1 LNS 895.(6) (Cap 2) (Sabah).