Malaysian Dispute Resolution Practice
Expert Services International can provide dispute resolution services in Malaysia under the Arbitration Act 2005, AIAC Rules, CIPAA adjudication and mediation.
Malaysian Dispute Resolution Practice
Dispute resolution in Malaysia is governed by the Arbitration Act 2005 (Act 646, amended 2018 and 2024), which provides the statutory framework for both domestic and international arbitration. The Construction Industry Payment and Adjudication Act 2012 (CIPAA) establishes statutory adjudication for construction payment disputes. Legislative amendments gazetted in November 2024 have modernised the arbitration framework.
Expert Services International can provide arbitration, adjudication, mediation, expert determination and dispute advisory services in Malaysia. The AIAC administers arbitrations under the AIAC Arbitration Rules 2026, and the Construction Court provides a specialist forum for construction litigation.
Malaysia is a common law jurisdiction. The Arbitration Act 2005 (amended 2024) provides the statutory framework for arbitration, and the Construction Industry Payment and Adjudication Act 2012 (CIPAA) establishes statutory adjudication for construction payment disputes.
Commercial Arbitration
The Asian International Arbitration Centre administers arbitrations under its AIAC Suite of Rules 2026, which represent a comprehensive update to AIAC's procedural framework. The AIAC Rules 2026 incorporate key features including mandatory disclosure of third-party funding, requirements for respondents to submit counterclaims upfront, and the expansion of emergency arbitration and summary procedures. The Arbitration Act 2005, as amended by the Arbitration Amendment Act 2024, provides the legislative foundation for arbitration in Malaysia. The amended Act implements the UNCITRAL Model Law and ensures that arbitration agreements are enforceable, that the powers of arbitral tribunals are clearly defined, and that Malaysian courts exercise minimal intervention in arbitral proceedings. The amendments to the Arbitration Act 2005 now provide that signatures of arbitrators on awards may include digital signatures and electronic signatures, modernising the framework to reflect electronic transactions and remote arbitration practices.
A significant development in Malaysia's arbitration framework has been the amendment to section 33 of the Arbitration Act 2005 permitting third-party funding of arbitration proceedings. This amendment, which came into force with the gazettal of the amendment Act on 1 November 2024, allows parties with meritorious claims to access arbitration without bearing the full financial burden of proceedings. Third-party funding has particular relevance to construction disputes involving significant financial exposure and complex technical issues, and the availability of funded arbitration has expanded access to justice and provided enhanced opportunities for parties to pursue meritorious claims. The AIAC Suite of Rules 2026 incorporates mandatory disclosure requirements for third-party funding, ensuring that all parties and the tribunal are aware of the involvement of third-party funders and that conflicts of interest are identified and managed appropriately.
The AIAC Court of Arbitration is a new feature of the AIAC Suite of Rules 2026, providing a distinctive institutional framework and enhancing the administration of arbitration under AIAC rules. The AIAC also administers arbitrations under the UNCITRAL Arbitration Rules, providing parties with a choice of procedural frameworks reflecting their requirements and preferences. The Chartered Institute of Arbitrators Malaysia Branch maintains a significant presence in the jurisdiction, and the IBA Rules on Taking of Evidence in International Arbitration are widely adopted in AIAC proceedings, providing a practical framework for the management of expert evidence and factual testimony. The CIArb Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration is similarly well-regarded and frequently utilised in construction and engineering disputes.
Security of Payment Adjudication
The Construction Industry Payment and Adjudication Act 2012 (CIPAA) provides a rapid dispute resolution mechanism specifically designed to address payment disputes in the construction industry. CIPAA was amended in 2024 through the CIPAA (Amendment) Bill 2024, which passed through Parliament on 16 July 2024 and was gazetted on 1 November 2024. The 2024 amendments served as a transitional measure, aligning statutory references with the AIAC's institutional restructuring whilst preserving the core procedural framework of CIPAA. The statute establishes an adjudication regime designed to ensure swift resolution of payment disputes and to protect the cash flow of construction industry participants.
Under CIPAA, a claimant may serve a payment claim on a respondent, and the respondent is required to provide a payment response within defined timeframes. If the respondent does not pay the amount claimed, or if there is a dispute concerning the amount due, the claimant may refer the matter to adjudication. An adjudicator, appointed from the panel maintained by the AIAC or another authorised nominating body, must determine the dispute within 30 days or such extended period as may be agreed by the parties. The adjudication process is designed to be accessible and efficient, with adjudicators empowered to determine questions of fact and law without being bound by the rules of evidence. CIPAA applies to construction contracts and contracts for the supply of goods and services for construction work, and the statute contains specific provisions addressing the treatment of payment claims, payment responses and adjudication determinations.
The Construction Court, established by the Courts of Judicature Act 1964, provides a specialised forum for the determination of construction disputes. Two Construction Courts have been established, one within the High Court of Kuala Lumpur and another within the High Court of Shah Alam, both established on 1 April 2013. These courts exercise jurisdiction over construction disputes and apply specialist procedures and case management techniques designed to address the technical complexity of construction disputes. Standard form construction contracts widely used in Malaysia, including PAM 2018 (the standard form of the Pertubuhan Arkitek Malaysia), PWD form contracts, CIDB form contracts and FIDIC form contracts, all contain dispute resolution mechanisms including references to adjudication and arbitration. These contractual provisions must be interpreted consistently with CIPAA and the Arbitration Act 2005, and the Construction Courts have developed significant expertise in the interpretation and application of these contractual frameworks and statutory mechanisms.
Mediation Services
The Mediation Act 2012 provides a statutory framework for mediation in Malaysia and establishes the Malaysian Mediation Centre as the primary institution administering mediation. The Act protects the confidentiality of mediation communications through comprehensive privilege provisions, encouraging parties to engage openly and frankly in settlement discussions without fear that statements made during mediation will be used as evidence in subsequent proceedings. The AIAC administers mediation services under specified rules and procedures, and the centre has published practice notes providing guidance on the conduct of mediation in international and domestic disputes.
Malaysian courts have actively promoted mediation and alternative dispute resolution mechanisms through court-annexed mediation procedures and practice directions encouraging parties to explore settlement before commencing formal proceedings. The courts recognise that mediation can be an effective mechanism for achieving settlement in construction disputes, particularly where the dispute relates to technical matters capable of resolution through expert discussion or where commercial considerations favour settlement. The Construction Court has established procedures for the referral of disputes to mediation, and judges regularly encourage parties to consider mediation as an alternative to protracted litigation or arbitration.
Expert Determination
Expert determination provides a mechanism for the swift resolution of technical disputes without the procedural formality or cost associated with arbitration or litigation. The AIAC administers expert determinations under specified rules and procedures, enabling parties to appoint a single expert to determine disputes concerning technical matters, valuation, quantification of claims, or other specialist issues. Expert determination is particularly valuable in construction disputes where the matter in contention relates to a technical question that does not involve substantial disputed findings of fact or application of law requiring judicial determination. Many construction contracts contain contractual provisions designating expert determination as the appropriate mechanism for resolution of disputes concerning technical performance, quality standards, variations or quantum of claims.
Contemporary Developments
Malaysia's dispute resolution landscape has experienced significant developments in 2024 and 2025, reflecting legislative modernisation and institutional evolution. The Arbitration Amendment Act 2024, which was passed by both houses of Parliament on 16 July 2024 and 24 July 2024 respectively and gazetted on 1 November 2024, brings substantial enhancements to Malaysia's arbitration framework. Key amendments include the allowance of third-party funding for arbitration proceedings and the modernisation of signature requirements to recognise digital and electronic signatures on arbitral awards. These developments demonstrate Malaysia's commitment to ensuring that its arbitration framework remains competitive and reflects contemporary international best practice.
The AIAC Suite of Rules 2026 represents a significant modernisation of the AIAC's procedural framework, incorporating lessons learned from contemporary international arbitration practice. The Rules 2026 introduce mandatory disclosure of third-party funding arrangements, ensuring transparency and enabling the management of potential conflicts of interest. The Rules also require respondents to submit counterclaims upfront, promoting efficiency in the arbitration process and enabling the tribunal to identify all matters in dispute at an early stage. The Rules further expand emergency arbitration procedures and summary determination procedures, providing parties with pathways for the rapid resolution of disputes where circumstances warrant expedited treatment.
The CIPAA Amendment Act 2024, passed through Parliament on the same dates as the Arbitration Amendment Act and gazetted concurrently, serves as a transitional measure aligning statutory references with the AIAC's institutional restructuring. Whilst the 2024 amendment does not introduce substantive changes to CIPAA's core procedural framework, the amendment ensures that all references to the AIAC Director and KLRCA are updated to reflect the institution's restructuring and that the procedural mechanisms for adjudication under CIPAA remain robust and effective. The Construction Court continues to exercise jurisdiction over construction disputes and has developed significant expertise in the management of complex construction claims and the application of specialist case management techniques.
Malaysia Expertise
Expert Services International provides dispute resolution services to law firms, parties, contractors, principals and engineers involved in construction and infrastructure disputes in Malaysia and across Asia. We combine technical expertise in quantum, delay, disruption and construction defects with knowledge of Malaysia's arbitration framework, mediation procedures, construction adjudication regime and Construction Court system.
Our Expertise
Expert Services International can provide dispute resolution services to parties involved in construction and infrastructure disputes. Our services include acting as arbitrator, expert determiner and mediator. We also provide expert witness reports and testimony addressing quantum, delay, disruption, construction defects, contractual interpretation, variations, liquidated damages and claims for set-off.
We prepare claims submissions, expert reports and advocacy for use in arbitration, expert determination, mediation and dispute board proceedings. We can assist parties with the preparation and presentation of claims and defences across all forms of dispute resolution.
Service Scope
Acting as arbitrator in domestic and international arbitration proceedings. We manage all aspects of arbitral procedure, conduct efficient hearings and deliver reasoned awards addressing the issues in dispute in accordance with applicable law and the parties' contractual framework.
Acting as expert determiner under contractual expert determination clauses and institutional rules. Expert determination provides a binding resolution of technical and valuation disputes by a suitably qualified professional, typically within a shorter timeframe than arbitration or litigation.
Preparation of expert reports addressing quantum, delay, disruption, construction defects, contractual interpretation, variations, liquidated damages and claims for set-off. We provide expert testimony in arbitration, court proceedings, mediation and expert determination proceedings.
Acting as mediator and providing mediation services to assist parties in reaching a negotiated resolution of disputes. We facilitate structured discussions, assist in identifying common ground and help parties achieve settlement without the need for formal adjudication.
Acting as dispute board member, chairperson or single neutral on major infrastructure projects. Dispute boards provide a standing mechanism for the rapid resolution of disputes during project execution, maintaining familiarity with the project throughout its duration.
Preparation of claims submissions and expert analysis for use in arbitration, expert determination, mediation and dispute board proceedings. We assist parties with the preparation and presentation of claims and defences addressing quantum, delay, disruption and contractual matters.
