INTERNATIONAL ARBITRATION 1/3LY
KUALA LUMPUR
WAITING IN THE WINGS MAY WELL BE SINGAPORE’S MORE COST-EFFECTIVE NEIGHBOUR, KUALA LUMPUR. KUALA LUMPUR BENEFITS FROM THE SAME COMMON LAW TRADITION AS SINGAPORE, WITH AN EXCELLENT GEOGRAPHICAL LOCATION, GOOD TRANSPORT LINKS AND CULTURAL FAMILIARITY WITH BOTH CHINESE AND INDIAN PARTIES. The Kuala Lumpur Regional Centre for Arbitration (KLRCA) has some of the lowest arbitration fees in the region. The Global Arbitration Review 2014 reports that the centre’s costs were around 60% lower than in Singapore. Even though the centre has since revised its fee structure, costs are still around 20% lower than SIAC and the HKIAC. 5 With cost increasingly cited as a significant factor when choosing a seat, this is likely to be attractive to many. Under the directorship of Professor Datuk Sundra Rajoo, the KLRCA is actively promoting itself as an international arbitration centre in the region, and government support for this initiative is evident. For example, Malaysian legislation was recently amended to permit foreign arbitrators and lawyers to enter Malaysia to participate in arbitral proceedings without a work permit being required. Further, with government support, KLRCA have now moved into state-of-the-art hearing facilities at an art deco heritage building close to the city centre.
The KLRCA also stands to benefit from the arbitration-friendly legal framework of the country. In addition to national legislation modelled on the UNCITRAL Model Law, the country is also a signatory to the New York Convention. Further, local courts are swift to resolve arbitration matters referred to them, with Chief Justice Ariffin Zakaria having stated that challenges to arbitration awards in the country are generally heard within around three months and disposed of within 9 months from the date of registration. 6 Statistics on cases filed suggest that the efforts of KLRCA and the Malaysian government have met with some success. The number of cases filed at the centre for 2008 stood at just 47 7 ; by 2013 annual cases filed had risen to 156 and by the third quarter of 2014 the centre had already received 226 cases. 8 These figures add credence to the argument that Malaysia has the potential to rival Singapore as a regional arbitration centre; particularly if Malaysia focusses on its cost advantage, given that arbitration consumers have identified cost as the most important factor of general infrastructure influencing the choice of seat. 9
THE KLRCA HAS SOME OF THE LOWEST ARBITRATION FEES IN THE REGION.
5 A rticle by Lim Wei Jiet published on 15 April 2015 and available at: http://ciarb.org.my/ymg/2015-04-winner.php 6 ibid 7 “Case Statistics from Different Arbitration Centres” published on 29 October 2014 available at: http://eng.viac.vn/about-us/case-statistic-from-different- arbitration-centres-a273.html 8 ibid 9 2010 International Arbitration Survey: Choices in International Arbitration” (White & Case & Queen Mary, University of London)
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