ARBITRATION (AMENDMENT) (NO. 2) ACT 2018

This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette.

Amendment of section 2

by substituting for subsection (4) the following subsection:

“(4)  An arbitration agreement is in writing—

if its content is recorded in any form, whether or not the arbitration agreement or contract has been concluded orally, by conduct, or by other means; or

if it is contained in an exchange of statement of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.”;

by inserting after subsection (4) the following subsection:

“(4a)  The requirement that an arbitration agreement be in writing is met by any electronic communication

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that the parties make by means of data message if the information contained therein is accessible so as to be useable for subsequent reference.”; and

by inserting after subsection (5) the following subsection:

“(6)  For the purpose of this section, “data message”

means information generated, sent, received or stored by electronic, magnetic, optical or similar means, including, but not limited to, electronic data interchange, electronic mail, telegram, telex or telecopy.”.

Amendment of section 11

by substituting for the words “for:” the words “for the party to—”; and

by substituting for paragraphs (a) to (h) the following paragraphs:

“(a) maintain or restore the status quo pending the determination of the dispute;

take action that would prevent or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process;

provide a means of preserving assets out of which a subsequent award may be satisfied, whether by way of arrest of property or bail or other security pursuant to the admiralty jurisdiction of the High

Court;

preserve evidence that may be relevant and material to the resolution of the dispute; or

provide security for the costs of the dispute.”.

Amendment of section 19

in subsection (1)—

by substituting for the words “a party may apply to the arbitral tribunal for any of the following orders:” the words “the arbitral tribunal may, at the request of a party, grant interim measures.”;

and

by substituting for subsection (2) the following subsection:

“(2)  An interim measure is any temporary measure, whether in the form of an award or in another form, by which, at any time prior to the issuance of the award by which the dispute is finally decided, the arbitral tribunal orders a party to—

maintain or restore the status quo pending the determination of the dispute;

take action that would prevent or refrain from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process itself;

provide a means of preserving assets out of which a subsequent award may be satisfied;

preserve evidence that may be relevant and material to the resolution of the dispute;

or

provide security for the costs of the dispute.”;

and

by deleting subsection (3).

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New sections 19a, 19b, 19c, 19d, 19e, 19f, 19g, 19h, 19i and 19j

harm not adequately reparable by an award of damages is likely to result if the measure is not ordered, and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted; and

there is a reasonable possibility that the requesting party will succeed on the merits of the claim.

The determination on the reasonable possibility referred to in paragraph (1)(b) shall not affect the discretion of the arbitral tribunal in making any subsequent determination relating to the dispute.

In respect of the request for an interim measure order under paragraph 19(2)(d), the conditions in subsections (1)

and (2) shall apply only to the extent the arbitral tribunal considers appropriate.

Application for preliminary orders and conditions for granting preliminary orders 19b.  (1)  Unless otherwise agreed by the parties, a party may, without notice to any other party, make a request for an interim measure together with an application for a preliminary order directing a party not to frustrate the purpose of the interim measure requested.

The arbitral tribunal may grant a preliminary order provided that the arbitral tribunal considers that prior disclosure of the request for the interim measure to the party against whom the measure is directed risks frustrating the purpose of the interim measure.

The conditions specified in section 19a shall apply to any preliminary order provided that the harm to be assessed under paragraph 19a(1)(a) is the harm that is likely to result from the order being granted or not.

Specific regime for preliminary orders 19c.  (1)  Immediately after the arbitral tribunal has made a determination in respect of an application for a preliminary order, the arbitral tribunal shall—

The arbitral tribunal shall decide immediately on any objection to the preliminary order.

A preliminary order shall expire after twenty days from the date on which the order was issued by the arbitral tribunal.

Notwithstanding subsection (3), the arbitral tribunal may issue an interim measure which adopts or modifies the preliminary order, after the party against whom the preliminary order is directed has been given notice and an opportunity to present his case.

A preliminary order shall be binding on the parties but shall not be subject to any enforcement by the High Court.

The preliminary order referred to in subsection (5)

shall not constitute an award.

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Modification, suspension or termination 19d.  The arbitral tribunal may modify, suspend or terminate an interim measure it has granted, upon an application of any party or, in exceptional circumstances and upon prior notice to the parties, on the arbitral tribunal’s own initiative.

Provision of security 19e.  (1)  The arbitral tribunal may require the party requesting an interim measure to provide appropriate security in connection with the measure.

The arbitral tribunal shall require the party applying for a preliminary order to provide security in connection with the order unless the arbitral tribunal considers it inappropriate or unnecessary to do so.

Disclosure 19f.  (1)  The arbitral tribunal may require any party to immediately disclose any material change in the circumstances on the basis of which the interim measure or preliminary order was requested or applied or granted.

The party applying for a preliminary order shall disclose to the arbitral tribunal all the circumstances that are likely to be relevant to the arbitral tribunal’s determination on whether to grant or maintain the order and such obligation shall continue until the party against whom the order has been requested has had an opportunity to present its case.

Costs and damages 19g.  (1)  The party requesting for an interim measure or applying for a preliminary order shall be liable for any costs and damages caused by the interim measure or the preliminary order to any party if the arbitral tribunal later determines that, in the circumstances, the interim measure or the preliminary order should not have been granted.

The arbitral tribunal may award such costs and damages referred to in subsection (1) at any point during the proceedings.

Recognition and enforcement 19h.  (1)  Subject to the provisions of section 19i, an interim measure issued by an arbitral tribunal shall be recognized as binding and, unless otherwise provided by the arbitral tribunal, enforced upon application to the competent court, irrespective of the country in which it was issued.

The party who is seeking or has obtained recognition or enforcement of an interim measure shall immediately inform the court of any termination, suspension or modification of that interim measure.

The court where recognition or enforcement is sought may, if it considers it proper, order the requesting party to provide appropriate security if the arbitral tribunal has not already made a determination with respect to security or where such a decision is necessary to protect the rights of third parties.

Grounds for refusing recognition or enforcement 19i.  (1)  Recognition or enforcement of an interim measure may be refused only—

Any determination made by the High Court on any of the grounds in subsection (1) shall be effective only for the purposes of the application to recognize or enforce the interim measure.

The High Court where recognition or enforcement is sought shall not, in making any determination on any of the grounds in subsection (1), undertake a review of the substance of the interim measure.

Court-ordered interim measures 19j.  (1)  The High Court has the power to issue an interim measure in relation to arbitration proceedings, irrespective of whether the seat of arbitration is in Malaysia.

The High Court shall exercise the power referred to in subsection (1) in accordance with its own procedures in consideration of the specific features of international arbitration.

Where a party applies to the High Court for any interim measure and an arbitral tribunal has already ruled on any matter which is relevant to the application, the High Court shall treat any findings of fact made in the course of such ruling by the arbitral tribunal as conclusive for the purposes of the application.”.

Amendment of section 30

by substituting for subsection (1) the following subsection:

“(1)  The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute.”;

by deleting subsection (2);

in subsection (3), by substituting for the words “Any designation by the parties of the law” the words “Any designation of the law or legal system”;

by substituting for subsection (4) the following subsection:

“(4)  Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable.”;

and

by inserting after subsection (4) the following subsection:

“(4a)  The arbitral tribunal shall decide according to equity and conscience only if the parties have expressly authorized it to do so.”.

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Amendment of section 33

by substituting for subsection (6) the following subsection:

“(6)  Subject to subsection (8), unless otherwise agreed by the parties, the arbitral tribunal may, in the arbitral proceedings before it, award simple or compound interest from such date, at such rate and with such rest as the arbitral tribunal considers appropriate, for any period ending not later than the date of payment of the whole or any part of—

any sum which is awarded by the arbitral tribunal in the arbitral proceedings;

any sum which is in issue in the arbitral proceedings but is paid before the date of the award; or

costs awarded or ordered by the arbitral tribunal in the arbitral proceedings.”; and

by inserting after subsection (6) the following subsections:

“(7)  Nothing in subsection (6) shall affect any other power of an arbitral tribunal to award interest.

Where an award directs a sum to be paid, that sum shall, unless the award otherwise directs, carry interest as from the date of the award and at the same rate as a judgment debt.”.

New sections 41a and 41b

the arbitral proceedings under the arbitration agreement; or

an award made in those arbitral proceedings.

Nothing in subsection (1) shall prevent the publication, disclosure or communication of information referred to in that subsection by a party—

Notwithstanding subsection (1), the court may order the proceedings to be heard in an open court—

An order of the court under subsection (2) is final.”.

Deletion of section 42