ALTERNATIVE

DISPUTE
RESOLUTION
DR HANIM KAMARUDDIN
2020
The strategic use of alternative dispute resolution (ADR) in the management of disputes can
lead to remedies unavailable in the Courts while still achieving productive outcomes with
considerable cost savings for agencies and the whole-of-government.
At the practice level, there is no doubt as to the expediency of resolving a dispute through
ADR, the flexibility that mediation for example, offers parties by allowing more control over
the outcome and hopefully preserving relationships both personal and commercial.
ADR provides a structure whereby each party has the opportunity to ‘air’ their dispute with
the overall view to narrowing the issues and getting the parties talking directly which is
immensely helpful in finding common ground.
Methods that parties can use to settle their disputes without resorting to court proceedings
Mediation and arbitration
Adjudication is a new process for the resolution of construction disputes introduced by the
Construction Industry Payment and Adjudication Act 2012 (CIPAA).
 When Should Disputes Be Left to the
Courts to decide
The issue of violence
Dispute resolution processes are generally confidential and therefore are not appropriate if one
of the parties wants the issue to be publicized or wants the outcome to be seen as an example
for other similar disputes.
Where there is a need to establish precedent, where the outcome of the case could affect a
great number of people or where a definite and broadly applicable solution is required.
MEDIATION
Voluntary process
Mediator facilitates communication and negotiations between parties to assist the parties in reaching
an amicable settlement
Mediation Act 2012 seeks to facilitate this process, which is governed by Practice Direction No. 4 of
2016 on Mediation issued by the Chief Justice with effect from 15 July 2016.
Generally, the parties are free to agree on the appointment of any person as their mediator.
If parties cannot come to a consensus, they can request the Malaysian Mediation Centre of the Bar
Council (“MMC”) to appoint a qualified mediator from its panel.
Any agreement arising from a successful mediation is reduced to writing in a Settlement Agreement
signed by the parties.
In the event the mediation is not successful, parties may proceed to pursue their respective rights in
litigation or arbitration.
Very often, parties commence legal proceedings without first attempting mediation.
In such circumstances, it is common for the judge to suggest that parties attempt mediation.
If parties are agreeable, the judge may mediate the matter himself, or alternatively refer the
parties to another judge or registrar to assist with the mediation. Where the mediation is
unable to bring about an amicable settlement, the case is returned to the hearing judge for
disposal.
All disclosures, admissions and communications made in and during mediation sessions are
made on a without prejudice basis.
This means that in the event the mediation is unsuccessful, parties cannot later use or repeat
any disclosures, admissions and communications in mediation to further their case in litigation
or arbitration -https://youtu.be/aPetj5bh0Qk
 Practice Direction No. 4 of 2016
The Practice Direction provides a list of types of cases which can be resolved by way of
mediation. They are::
Claim for personal injuries
Defamation
Matrimonial disputes
•Commercial disputes
Contractual disputes and
Intellectual property case
 Modes of mediation
Judge-led mediation (including Session Court Judges, Magistrates, Registrars, or Assistant
Registrars) are to encourage the parties to refer to mediation at the pre-trial case management-
Also refer to Order 34, rule 2 of the Rules of the Court 2012 (P.U. (A) 205/2012)
by Kuala Lumpur Regional Centre of Arbitration
by other mediators agreeable by both parties including the Malaysia Mediation Centre
The Practice Direction also provides the procedure to be adopted. Annexure A is to be applied
to judge-led mediation, Annexure B to KLRCA and Annexure C to mediators under the Malaysian
Mediation Centre or other private mediators.
The court will give a return date of not more than one month from the date the case is referred
to mediation and the parties shall report on the outcome. However all mediations must be
completed no later than three months from the date the case is referred for mediation.
 ARBITRATION
A private and judicial determination of a dispute by an independent third party.
The difference between mediation and arbitration is :
In mediation, parties maintain full control of the workings and outcome of the
mediation
In arbitration, the arbitrator decides the outcome of the proceedings and the parties
are bound by that decision.
Arbitration is similar to court proceedings in that the arbitrator (like the judge) will decide the
dispute
Difference is that parties can decide on the appointment of the arbitrator and the rules and
procedures to be applied in the arbitration.
 Parties to a contract may agree by way of an arbitration clause to refer any dispute that might arise in
respect of that contract to arbitration.
Parties may also agree to refer an existing dispute to arbitration even though there was no such prior
agreement between them.
Parties are at liberty to decide, among others, on the number of arbitrators that will decide the matter,
the place of the arbitration and the rules to be applied to the arbitration.
The Arbitration Act 2005 is the law governing arbitration in Malaysia.
The UNCITRAL Model Law on International Commercial Arbitrations has been adopted as part of the
working provisions of the Act.
Pursuant to the Arbitration Act 2005, the KLRCA is the default appointing body.
Arbitrators do not have to be legally qualified but they must be independent and impartial. There is no
specific qualifications required of arbitrators.
However, parties are usually advised to appoint arbitrators who have sufficient experience in arbitration
as well as technical knowledge on the subject matter in dispute.
 Parties to arbitration proceedings are commonly represented by lawyers.
However, as arbitration proceedings do not come within the purview of the Legal Profession Act 1976,
parties may choose to be represented by lay persons or foreign lawyers.
The arbitrator is generally required to give a reasoned award, that is, an award explaining the grounds for
his decision.
In the event a losing party refuses to comply with an award, the winning party may apply to the High
Court to register the award, and thereafter pursue enforcement proceedings.
There is no appeal against an award made in Malaysia under the Arbitration Act 2005.
The only challenge that can be made is an application to the High Court to set aside the award.
Such an application has to be within 90 days of the receipt of the award. The grounds for setting aside
such an award are limited to fraud, or breach of the rules of natural justice or where the award is
contrary to public policy of Malaysia.
https://youtu.be/bWMnWsgQrdQ?t=7
 INTERIM MEASURES
The 2018 amendments introduce a raft of supplementary provisions in relation to the granting
of interim measures by both the arbitral tribunal and the Malaysian High Court.
These newly introduced sections, i.e. 19A to 19J, mirror the provisions in the 2006
amendments to the UNCITRAL Model Law regarding interim measures.
The additional provisions establish a regime in respect of requests for interim measures, and
provide useful guidance on the operation, recognition and enforcement of interim orders.
(https://www.lh-ag.com/wp-content/uploads/2018/06/4_Malaysian-Arbitration-
Amendment-No-2-Act-2018-A-Practical-Commentary-by-Crystal-Wong-Wai-Chin.pdf)
 New section : Explanatory note
19A : sets out the conditions for granting interim
measures
19B:permits applications for preliminary orders and
sets out the conditions for granting preliminary
orders
19C:creates a specific regime and mechanism
governing the granting of preliminary orders
19D:allows the arbitral tribunal to modify, suspend
or terminate an interim measure that it has granted
19E:permits the arbitral tribunal to require security
from the party requesting an interim measure.
19F:requires a party to promptly disclose any
material change in the circumstances on the basis of
which the interim measure was requested or granted
19G:provides that the requesting party shall be
liable for any costs and damages caused by the
interim measure if the arbitral tribunal later
determines that the interim measure should not
have been granted.
19H:provides for the recognition and
enforcement of an interim measures issued by an
arbitral tribunal
19I:sets out the grounds for refusing recognition
or enforcement of an interim measure
19J:provides that the High Court has the power to
issue interim measures in relation to arbitration
proceedings, irrespective of whether the seat of
arbitration is in Malaysia
-Arbitration (Amendment) (No 2) Act 2018
(“Amendment Act”)
 Power of the High Court
Section 11(1) Arbitration Act 2005
A party may, before or during arbitral proceedings, apply to a High Court for any interim measure and
the High Court may make the following orders for:
a) security for costs;
b) discovery of documents and interrogatories;
c) giving of evidence by affidavit;
d) appointment of a receiver
e) securing the amount in dispute, whether by way of arrest of property or bail or other security
pursuant to the admiralty jurisdiction of the High Court;
f) the preservation, interim custody or sale of any property which is the subject-matter of the dispute;
g) ensuring that any award which may be made in the arbitral proceedings is not rendered ineffectual by
the dissipation of assets by a party; and
h) an interim injunction or any other interim measure.
Relief & Remedies in Arbitration Award
Section 30-39
Payment of money ,specific relief ,declaratory
relief, indemnity, injunctions and Interest & costs
 Remedies in Investment Treaty Arbitration
What is investment treaty and investment treaty arbitration?
An investment treaty is an agreement reached between two or more countries containing reciprocal
undertakings for the promotion and protection of private investments made by nationals of the
state parties in each other's jurisdictions.
These undertakings can form party of a standalone treaty or part of a wider agreement, for example, a
free trade agreement or an agreement focused on sectoral co-operation (such as the Energy Charter
Treaty).
Investment treaties are unique in international law. If a host state fails to deliver on its undertakings to
protect or promote investment, an investor of the other state party may bring an arbitration against
the host state for breach of its obligations.
These arbitrations will take place as set out in the treaty, often under the rules of the International
Centre for the Settlement of Investment Disputes (ICSID) or through "ad hoc" arbitration under the
UNCITRAL Rules.
Remedies in investment treaty
arbitration
Pecuniary compensation for expropriation
Pecuniary compensation for non-expropriation breaches
Non-pecuniary remedies

Read
1. https://www.international-arbitration-attorney.com/investment-arbitration/
2. https://gettingthedealthrough.com/area/60/jurisdiction/55/investment-treaty-arbitration-
malaysia/