DISPUTE AND APPEAL

DISPUTE SETTLEMENT
MECHANISMS
DISPUTE SETTLEMENT
A dispute settlement mechanism is a
structured process that addresses disputes or
grievances that arise between two or more
parties engaged in business, legal, or societal
relationships.
Dispute mechanisms are used in dispute
resolution, and may incorporate negotiation,
conciliation, mediation, arbitration and
litigation.
Otherwise known as grievance
mechanisms, dispute mechanisms are
typical non-judicial in nature, meaning
that they are not resolved within the
court of law.
ADR is seen as an alternative to litigation
in resolving contractual disputes as it is
perceived to be cost saving, more private
and able to avoid ill-will or animosity as
it sometimes does, in litigation.

ADR: Alternative Dispute Resolution

The realisation of ADR as a process that
complements both litigation and
arbitration has meant that the processes
are constantly expanding to include new
techniques which offer no limits to the
types of dispute resolution processes that
can be utilised.
 The main attraction of ADR is often
the consensual process, but this also
means that it will not be successful
unless the parties each have a
genuine desire to reach a settlement
(Holtham et al., 1999).
The ADR processes differ in their formality and
placement of decision- making power.

Some methods are non-binding and allow the

parties to have control at all times over the
outcome of the dispute, participate in the
development of an agreeable settlement in the
presence of a neutral third party and withdraw
from the process at any point. (Pẽna- Mora et al.,
2003).
 Other methods may become binding
where all powers lies with the neutral
third party which is mandatory and
have a formal structure that require
strict adherence to the rules and
implementation (Uff, 2005a).
 Brown and Marriot (1999) have
identified eighteen main dispute
resolution methods ranging from
processes which offer the least
control, which is litigation, to those
that offer the greatest control, that
is, negotiation.
Arbitration: The use of an arbitrator to settle a
dispute.
Mediation: Intervention in a dispute in order to resolve
it; arbitration
Conciliation: The action of mediating between two
disputing people or groups
Negotiation: negotiations/discussion aimed at reaching
an agreement.
Litigation: The process of taking legal action.
ARBITRATION
Arbitration

The Rules for arbitration under the auspices of

the Centre are the UNCITRAL Arbitration Rules of
1976 with certain modifications and adaptations
as set forth in the rules for Arbitration of Regional
Centre for Arbitration Kuala Lumpur.
Arbitration

The UNCITRAL Rules have been

recommended by the United Nations
General Assembly by its Resolution No.
XXXI 98 adopted on the 15th December
1976, and have been widely accepted
by the international community.
Arbitration

 The Rules of the Centre allow a great deal

of flexibility in the conduct of proceedings
of the arbitration and leave wide discretion
to the parties in regard to the choice of
arbitrators, the place of arbitration and the
applicability of the procedural rules.
 The Rules provide guidelines on the arbitration process and
must be adhered to so as to ensure validity of the arbitration
proceeding.
Before beginning any arbitration proceedings, parties are
advised to understand them:
 The fees and charges of the Centre are fixed based on the
actual expenses incurred and keeping in view the non-profit
making character of the Centre. They will be borne by the
parties in such proportion as may be determined in the
arbitral award.
 The fees of arbitrators depend on several factors such as the
complexity of the case, the nature of the dispute, length of
hearings and the eminence and standing of the arbitrators.
Fees will be fixed in each case in accordance with the
schedule of fees below, and after consultation with the
arbitrators and the parties.
 Arbitration

 NOTE: Parties may wish to consider adding: (a) The

appointing authority shall be the Kuala Lumpur Regional
Centre for Arbitration. (b) The number of arbitrators shall
be ....... (one or three). (c) The place of arbitration shall
be .......... (town or country). (d) The language(s) to be
used in the arbitration proceedings shall be ......... (e) The
law applicable to this contract shall be that of .........
 Arbitration

➢ Conciliation or mediation is a voluntary process in

dispute resolution whereby a neutral third party
who is independent of the parties, assists them to
reach agreement by developing options for them.

➢ Conciliation/mediation may be used in both

domestic and international cases where parties
opt to conciliate either preliminary to arbitration,
in lieu of arbitration, or in the course of
arbitration.
➢ The conciliator/mediator does not impose a settlement
upon the parties. He or she may propose a settlement
if the parties so wish. The function of the
conciliator/mediator is to help the parties to come to
a settlement.

➢ If this fails, that is the end of the matter. The

procedure is very flexible and the conciliator/mediator
can confer with each party separately. The process
could take one day, a few days, or longer, if
circumstances permit.
Arbitration
Fee Schedule
(a) Registration Fee
US$ 50.00 payable by the party initiating
conciliation.
(b) Deposit
US$500.00 towards administrative costs
payable by each party on a reference to
conciliation / mediation.
Arbitration
Fee Schedule

(c) Administrative Costs

One-quarter of the amount in dispute according
to the Schedule below, with a minimum of
US$500.00. In the event that the amount in
dispute is not stated, the administrative costs
shall be fixed by the Director of the Centre.
Arbitration
Amount in Dispute (US$) Minimum Maximum
Up to 50,000 $500.00 7.00%
From 50,001 to 100,000 1.00% 4.00%
From 100,001 to 500,000 0.50% 2.00%
From 500,001 to 1,000,000 0.40% 1.00%
From 1,000,001 to 2,000,000 0.30% 0.80%
From 2,000,001 to 5,000,000 0.20% 0.50%
From 5,000,001 to 10,000,000 0.10% 0.30%
From 10,000,001 to 50,000,000 0.05% 0.15%
From 50,000,001 to 100,000,000 0.02% 0.08%
Over 100,000,000 0.01% 0.05%
Arbitration

(d) Conciliator/Mediator's Fee

In fixing the fee of the conciliator/ mediator,

the Director of the Centre may consult with the
conciliator/ mediator and the parties.
Fees are based on the amount in dispute, the
complexity of the subject matter, the time spent
by the conciliator/mediator and any other
relevant circumstances of the case.