With the progress of social and economic development, enterprises in the market will seek more cooperation in different fields or development. Therefore, in the process of cooperation, disputes may arise between the two parties. If the dispute has grown to such an extent that it cannot be resolved through mutual communication and negotiation, it is necessary for a third party to evaluate the merits of the dispute and make a decision, which is called seeking for an arbitration.
Arbitration procedure refers to the procedures that should be dealt with, when the parties submit the dispute to arbitration according to the provisions of the arbitration agreement.
First, the complainant needs to file an arbitration application. This is the first step to start arbitration proceedings. The laws of various countries are inconsistent in the provision of applications. When submitting an application for arbitration to the arbitration committee, the claimant shall attach relevant supporting documents.
Next comes the arbitration tribunal. Malaysia’s Arbitration Act has no restrictions on the appointment of arbitrators, providing that anyone with legal capacity may act as an arbitrator, including an acting or serving judge (this is unlike in some jurisdictions). There are no other mandatory qualifications to serve as an arbitrator. The parties may freely determine the number of arbitrators. If the parties do not agree on the number of arbitrators, the default value is three arbitrators for international arbitration and one arbitrator in the case of domestic arbitration. The parties are also free to agree on the procedure for appointing an arbitrator, otherwise the default rule is that each party shall appoint an arbitrator and the two appointed arbitrators shall appoint the presiding arbitrator.
After that, the case can proceed to trial. There are two ways for an arbitration tribunal to hear a case. The first is to hear the case without opening a court hearing, which is generally applied by the parties or agreed by the arbitration tribunal with the consent of both parties, and hears the case only on the basis of written documents and makes an award. The second is the hearing in court. This kind of hearing is in accordance with the provisions of the arbitration rules. If both parties request the hearing to be held in public, the arbitration tribunal will make the decision.
The final part of the arbitration process is the award. When the ruling is made, the proceedings of the case are concluded. The parties shall automatically perform the arbitration award within the time specified therein; if no time limit is specified in the award, the parties shall perform the award immediately.
In accordance with the general provisions of the rules of arbitration, the parties may request the competent court of the place of arbitration to cancel the arbitral award and declare it invalid within the statutory time limit if the award is in any of the following circumstances.
- First, an award made in the absence of an arbitration agreement or an invalid (expired) arbitration agreement
- Second, the arbitrator’s misconduct or beyond the authority of the award
- Third, rulings made on the basis of falsification of evidence
- Forth, the matter of the award is an award which shall not be submitted to arbitration according to the law of the place of arbitration