For the third consecutive year (see our previous updates here and here), we analyse publicly available institutional arbitration caseload statistics of various arbitral institutions around the world to understand the trend of Malaysian participation and usage of institutional arbitration. Our analysis of the numbers confirms a general preference by Malaysian parties for arbitrations conducted by the Asian International Arbitration Centre (AIAC), the Hong Kong International Arbitration Centre (HKIAC), the International Court of Arbitration of the International Chamber of Commerce (ICC) and the Singapore International Arbitration Centre (SIAC). This indicates that institutional arbitration has room for growth as the preferred form of dispute resolution among Malaysian parties for their domestic and international disputes.
Overview of institutional statistics
The statistics below are our best estimates produced from published figures for institutional arbitrations involving Malaysian parties in 2020. They cannot completely capture all arbitrations involving Malaysian parties as not all institutions provide full breakdowns by jurisdiction and ad hoc arbitrations cannot be easily tracked. Different institutions also record their arbitrations differently, which makes uniform analysis of figures across all institutional statistics difficult.
Malaysia-based AIAC administered 69 new arbitration cases and acted as appointing authority for 31 ad hoc appointments (compared to 98 and 27 respectively the year before). Of this, 89 were domestic arbitration cases and 11 were international arbitration cases. The caseload remains significant despite administrative difficulties caused by a prolonged vacancy in the office of the Director of the AIAC (discussed here). In this time, the AIAC received its first request to administer an investment treaty arbitration pursuant to the UNCITRAL Arbitration Rules.
The HKIAC ranked Malaysia as the eighth nationality most frequently involved in the 318 arbitrations submitted to it in 2020. This is a significant number given that parties from no less than 45 jurisdictions participated in HKIAC arbitrations in 2020. By contrast, in 2018, Malaysia was ranked ninth out of 40 jurisdictions in some 265 arbitrations that year.
The number of Malaysian parties involved in SIAC arbitrations continue to decline year-on-year over the past three years, from 82 in 2018, to 38 in 2019, and 33 in 2020. This aggregate takes into account the number of parent companies from Malaysia, whose subsidiaries were parties to an arbitration at the SIAC but incorporated elsewhere.
Based on our review, Malaysian parties in ICC arbitrations in 2020 dipped to a six-year low of only seven users. Two Malaysian parties were also party to arbitrations under the rules of the Japan Commercial Arbitration Association (JCAA) in 2020. By contrast to the previous years reviewed, there were no new case registrations in the Stockholm Chamber of Commerce and the Korean Commercial Arbitration Board in 2020.
The generally lower year-on-year number of domestic institutional arbitrations in Malaysia and Malaysian parties involved in non-AIAC institutional arbitrations (with the exception of HKIAC) bucks the broader 2020 trend where a majority of arbitration institutions globally reported record-breaking caseloads and growth in case registrations (discussed here).
These are the main points to consider when looking at the statistics:
- It is not possible for us to provide comprehensive statistics for every institution as some institutions do not release or provide a breakdown for party nationalities in detailed figures (such as the Danish Institute of Arbitration and Vietnam Arbitration Centre), and certain institutions have combined nationality data into broader regional categories (such as the London Court of International Arbitration).
- The statistics do not include specialist commodities, intellectual property, investor-state and maritime arbitrations. If we had added these into our review, the number of arbitrations involving Malaysian parties would be higher.
- We have not been able to capture all ad hoc arbitrations. As such, the figures for arbitrations involving Malaysian parties in most jurisdictions will be underestimated.
Overall, our analysis of published figures from 2015 to 2020 confirm a constant fluctuation in the number of Malaysian institutional arbitration users in the six years trailing our review, but points to a consistent trend of Malaysian parties selecting AIAC, HKIAC, ICC, and SIAC arbitrations as the main choices for institutional arbitration.
For further information, please contact Peter Godwin, Daniel Chua, Kin-Hoe Loi or your usual Herbert Smith Freehills contact.
Herbert Smith Freehills LLP is licensed to operate as a Qualified Foreign Law Firm in Malaysia. Where advice on Malaysian law is required, we will refer the matter to and work with licensed Malaysian law practices where necessary.