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2019 Statistics indicates Malaysian’s continued demand for arbitration.
According to Herbert Smith Freehills’ report, which compiles access to arbitration institutions based on statistics from arbitral institutions between 2015-2018, as well as, statistical compilations in 2019 as well.
Herbert Smith Freehills reports that in 2019, the Asian International Arbitration Center “AIAC”) [TS1] summarized that there were 98 ongoing disputes involving Malaysia (100 cases in 2018). Moreover, the AIAC Director (who was appointed under the 2005Malaysia Arbitration Act) reported a total of 27 adhoc cases. In addition, AIAC also for the first time, has an emergency arbitration proceeding which is processed under the rules of AIAC as well.
As for the International Arbitration Court of the International Chamber of Commerce, or ICC, it is also a popular institution in Malaysia with a high arbitration record for the past three years, i.e. 17 cases in 2019.
The Singapore International Arbitration Center (SIAC) is significantly less popular with Malaysia than in 2018, whereby it reported a decrease of 82 cases in 2018 to just 38 in 2019. This also includes its company’s headquartered in Malaysia and with subsidiaries as an affiliate to SIAC, but with locations elsewhere.
It is also evident that the past 2019, arbitration in institutions located in Asia has proved to be very popular with Malaysia. The Korean Commercial Arbitration Board (KCAB), reported that 1.4 percent of all involved in the institution’s arbitration were involved with Malaysian parties. Although KCAB did not report the total number of people involved in the service, but it reported that it processed 443 arbitration cases in [TS2] 2019.
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The 2019 summary report of the China International Economic and Trade Arbitration Commission (CIETAC), also states the use of the institution’s services, though it did not clearly specify the total number of Malaysian users.
In addition, the Japan Commercial Arbitration Association (JCAA), has reported that arbitration has been requested by Malaysia, i.e. by a single petitioner and a respondent between the period of 2015-2019.
Additionally, it was reported by the Stockholm Chamber of Commerce (SCC), that there were two cases of dispute involving Malaysian stakeholders that was registered in 2018.
The statistics originating from these Asian countries do not necessarily mean that arbitral institutions, such as: the London Court of International Arbitration (LCIA), the Hong Kong International Arbitration Center (HKIAC), or the American Arbitration Association – International Center for Dispute Resolution (AAA-ICDR), were not popular in Malaysia in 2019, but it was due to reports showing access to Malaysian services in particular were not released. In addition to this, the use of the LCIA and HKIAC services were already popular. Moreover, HKIAC also ranked the top 10 users based on geographic locations [TS3] or nationalities [1].
It can be seen that arbitration at AIAC, ICC, and SIAC, have proved to be very popular with Malaysia. However, though each institution discloses user information on a varying basis, it can still be seen that the popularity of accessing arbitral institutions by Malaysians is relatively stable. In addition, the use of various arbitral institutional services is often more preferable by Malaysian parties than ad hoc arbitration. The option in choosing to use adhoc arbitration or an arbitration institution often depends on the nature and background of the dispute in question. However, Malaysian parties’ choice of arbitration institutions is due to the reputation and transparency of these leading institutions.
In addition, Malaysia is currently focused on participating in larger and more multilateral investment initiatives in the region, from the Belt and Road Initiative, to Malaysia’s signing of a comprehensive and progressive agreement for trans-Pacific partnerships. This includes the recent signing of the Regional Comprehensive Economic Partnership Agreement. Therefore, there is no doubt that arbitration has proved to be very popular among businesses in Malaysia. This also includes potential partners to Malaysian companies.
Source:
[1] Including Hong Kong, People’s Republic of China, British Virgin Islands, United States, Cayman Islands, Singapore, South Korea, United Kingdom, Switzerland, and Macau respectively. See more at https://www.hkiac.org/about-us/statistics
