Peter Godwin, Kin-Hoe Loi and Rachel Lim

Following on from our previous updates in 2019, 2020, and 2021, we analyse the publicly available caseload statistics for the usage of various arbitral institutions by Malaysian parties, including the Asian International Arbitration Centre (AIAC), the Singapore International Arbitration Centre (SIAC), the Hong Kong International Arbitration Centre (HKIAC), as well as other arbitration institutions to understand the trends of Malaysian participation and usage of institutional arbitration.

Our analysis of the numbers indicates that for 2021 and 2022, the AIAC and SIAC continue to remain the preferred arbitral institutions by Malaysian parties, while on the other hand, there has been a decrease in the use of the HKIAC.

Overview of Institutional Statistics

The AIAC administered 88 new arbitration cases in 2021 and 76 new arbitration cases in 2022 (compared to 69 in 2020), and received, as ad-hoc appointments under the Arbitration Act 2005, 29 ad-hoc appointments in 2021 and 17 ad-hoc appointments in 2022 (compared to 31 in the 2020). Although there has been a dip in the number of ad-hoc appointments for the AIAC, the number of AIAC-administered cases remains significant, and encouragingly, despite its AIAC Arbitration Rules 2021 having only been released in August 2021, the AIAC has already administered 94 cases under them.

In 2022 too, the AIAC administered its first Islamic arbitration case under its i-Arbitration Rules 2021, which took effect from 1 November 2021. Of the cases administered by the AIAC, domestic arbitration cases continue to make up the majority of its caseload, with a total of 104 cases in 2021 and 67 cases in 2022, with arbitrations involving foreign counterparts numbering 13 cases in 2021 and 9 cases in 2022.

Bucking a trend downwards in recent years, from 82 in 2018 to 33 in 2020, the number of Malaysian parties involved in SIAC arbitrations increased to 56 in 2021. While this then declined to 44 users in 2022, that still ranked Malaysia as 4th in the top ten foreign users at the SIAC.

In contrast, for both 2021 and 2022, Malaysia did not feature in the HKIAC’s list of top ten geographical origins or nationalities who participated in HKIAC arbitrations, representing something of a fall off from 2020 and 2018, when Malaysia came in at 8th and 9th on the lists respectively.

2021 and 2022 also saw some, albeit minor, usage of the other regional arbitral institutions by Malaysian parties. The Korean Commercial Arbitration Board (KCAB), which does not report its foreign users by numbers, using percentages instead, reported Malaysian parties as having made up 5.9% of its international caseload for 2021. The 2022 statistics for the China International Economic and Trade Arbitration Committee (CIETAC), also lists some level of participation by Malaysian parties, but does not provide exact figures.

Rather unusually, the latest 2021 and 2022 statistics by the International Court of Arbitration of the International Chamber of Commerce (ICC) have not been released, although the preliminary figures unveiled for 2021 indicate that Malaysian parties were not within the top 10 users of the ICC’s services (there were only 7 users in 2020). Finally, the London Court of International Arbitration (LCIA) reported a slight uptick in Malaysian parties choosing the LCIA for arbitration, from 0.7% in 2021 to 1.3% in 2022.

Comment

The 2021 and 2022 statistics indicate that while there remains a healthy number of Malaysian parties choosing AIAC and SIAC arbitration, Malaysian usage of other international arbitral institutions remain low.

Encouraging, despite vacancies in the AIAC Directorship for much of 2020 and again in 2023 (discussed here and here), which presented difficulties including in the appointment of arbitrators, the volume of domestic arbitration cases in Malaysia remains significant, demonstrating the appetite for arbitration amongst Malaysian parties. The AIAC also has had significant success in the promotion and adoption of its 2021 rules and it is hoped that its latest efforts to promote Islamic arbitration in Malaysia will also see similar success.

For more information, please contact Peter Godwin, Craig Shepherd, Anita Natalia, Kin-Hoe LoiMichele YeeLee Mei Xian, Emily Lim, Arnold Hoong, Charlene Kong, Calan Eskandar Shamsudin, or your usual Herbert Smith Freehills contact.

Peter Godwin
Peter Godwin
Managing Partner, Malaysia
+603 2707 6504
Craig Shepherd
Craig Shepherd
Partner, Malaysia
+603 2707 6551
Anita Natalia
Anita Natalia
Senior Associate, Malaysia
+603 2707 6506
Kin-Hoe Loi
Kin-Hoe Loi
Associate, Malaysia
+603 2707 6558
Michele Yee
Michele Yee
Associate, Malaysia
+603 2707 6559
Mei Xian Lee
Mei Xian Lee
Associate, Malaysia
+603 2707 6520
Emily Lim
Emily Lim
Associate, Malaysia
+603 2707 6507
Arnold Hoong
Arnold Hoong
Associate, Malaysia
+603 2707 6554
CharleneYuiinYee Kong
CharleneYuiinYee Kong
Associate, Malaysia
+603 2707 6556
Calan Eskandar Shamsudin
Calan Eskandar Shamsudin
Associate, Malaysia
+603 2707 6555

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Disclaimer
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.