The AIAC Arbitration Rules 2021 (“the 2021 Rules”) was launched on 1 August 2021 and is a response to the recent trends in arbitration to promote transparency, and time and cost savings. The 2021 Rules have modernised the previous 2018 Rules in line with the best arbitration practices internationally.
Some of the key changes in the 2021 Rules include:
- Merger with the UNCITRAL Arbitration Rules
- Incorporation of the fast track procedure
- Publication of awards with parties’ consent
- Summary determination
Merger of UNCITRAL Arbitration Rules and AIAC Arbitration Rules
The 2021 Rules merges the UNCITRAL Model Law (as revised in 2013) into its provisions. Under the 2018 Rules, the Model Law was included as a separate Part to the rules, whereby if there is any conflict between the Rules (Part 1) and the Model Law (Part 2), the rules would prevail. By incorporating the Model Law into the rules itself, the 2021 Rules now provides a more streamlined procedure and eliminates the previous practice of referring to the Model Law separately.
Fast Track Procedure
The Fast Track Procedure is an expedited form of arbitration. Under the Fast Track Procedure, oral hearings shall not exceed 5 days and are to be held within 90 days from the delivery of the first procedural order, and the draft final arbitral award must be submitted by the tribunal to the AIAC for technical review within 90 days from the date proceedings are declared closed.
The Fast Track Procedure was previously set out in a separate set of rules known as the Fast Track Arbitration Rules.
The Fast Track Procedure is now incorporated into the 2021 Rules as Rule 8. An arbitration may qualify for the fast track if all parties agree to it, the amount in dispute is less than US$500,000 (international arbitration) or RM2 million (domestic arbitration), or if there is exceptional urgency.
Publication of awards
Rule 44.6 of the 2021 Rules now allow for publication of the arbitration award with parties’ express consent, subject to parties’ names and other identifying information being redacted. The publication of awards will allow greater transparency and aid in developing arbitration practice as arbitrators, practitioners and parties themselves can review, and learn from past decisions of other tribunals.
The 2021 Rules now provide for summary determination or dismissal of claims and counterclaims. Any party may submit a request to dismiss a claim, counterclaim or defence where it is without merit or falls outside the jurisdiction of the tribunal. This summary determination mechanism brings the AIAC’s rules in line with leading arbitration counterparts such as the ICC and SIAC.
Other changes in the 2021 Rules deal with the issues of emergency arbitration, closure and termination of proceedings and the technical review process, multi-party appointments and multi-contract disputes.
Parties intending to use the 2021 Rules are advised to adopt the model clause in their agreements:
“Any dispute, controversy, difference or claim arising out of or relating to this contract, including the performance, breach, termination or invalidity thereof, as well as any non-contractual claims, shall be finally determined by arbitration, administered by the AIAC, in accordance with the AIAC Arbitration Rules in force at the time of the commencement of the arbitration.”
This article was written by Donovan Cheah with assistance from You Xian Ng (Intern). Donovan is an Advocate and Solicitor of the High Court of Malaya. He is a Fellow at the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and the Asian Institute of Alternative Dispute Resolution. He is also a registered foreign lawyer with the Singapore International Commercial Court.
Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory. Have a question? Please contact us.