Akta Timbangtara 2005
Applies to: Federal Act — see s 3 (Application to arbitrations and awards in Malaysia) · Official text ↗
- Defines key terms like 'award', 'arbitral tribunal', and distinguishes between domestic and international arbitration (s 2).
- Specifies that the Act applies throughout Malaysia and outlines which parts apply to domestic versus international arbitrations (s 3).
- Establishes that disputes can be arbitrated unless they are contrary to public policy or not capable of settlement by arbitration (s 4).
- Requires arbitration agreements to be in writing, including via electronic communication, and defines their valid forms (s 9).
- Mandates that courts stay proceedings and refer parties to arbitration if a valid arbitration agreement exists (s 10).
- Sets out procedures for appointing arbitrators, including the role of the Director of the Asian International Arbitration Centre (Malaysia) and the High Court (s 13).
- Regulates the form, content, and finality of awards, including requirements for signatures, reasons, and interest (s 33, s 36).
- Provides grounds for setting aside an award and the process for recognizing and enforcing awards in Malaysia (s 37, s 38).
What this law is
The Arbitration Act 2005 (Akta Timbangtara 2005) is numbered Act 646 in the Laws of Malaysia. Where it applies is set out in section 3 (Application to arbitrations and awards in Malaysia).
Its long title, as printed in the official text: An Act to reform the law relating to domestic arbitration, provide for international arbitration, the recognition and enforcement of awards and for related matters.
Read every section, the amendment history and the official copy on our law library page for this Act.
How the Act is arranged
- Part I — Preliminary (ss 1–5)
- Part II — Arbitration (ss 6–39)
- Part III — Additional provisions relating to arbitration (ss 40–46)
- Part IV — Miscellaneous (ss 47–51)
Part titles are from the official arrangement of sections.
Time limits in this Act
| What | Limit | Section |
|---|---|---|
| A party must appoint an arbitrator after receiving a written request from the other party | thirty days | s 13(4)(a) |
| Two appointed arbitrators must agree on the third arbitrator | thirty days of their appointment or such extended period as the parties may agree | s 13(4)(b) |
| The Director of the Asian International Arbitration Centre (Malaysia) must act on a request for appointment | thirty days from the request | s 13(7) |
| An application for setting aside an award must be made | ninety days from the date on which the party making the application had received the award or, if a request has been made under section 35, from the date on which that request had been disposed of by the arbitral tribunal | s 37(4) |
| An arbitral tribunal must specify the amount of costs and expenses if directed to do so | thirty days of having being requested to do so | s 44(1)(b) |
Laws cited on this page
| Act 646 | Arbitration Act 2005 Akta Timbangtara 2005 | PDF · PDF (BM) · Official ↗ |
Each law links to our mirror page: a copy of the official text captured on a known date, its version history, and the official source. Law library →
Key sections
| Provision | What it says, in plain words |
|---|---|
| s 2 | Defines key terms such as 'award', 'arbitral tribunal', 'domestic arbitration', and 'international arbitration' to clarify the scope of the Act. |
| s 3 | States that the Act applies throughout Malaysia and specifies which parts of the Act apply to domestic and international arbitrations based on the seat of arbitration. |
| s 4 | Confirms that disputes agreed to be arbitrated can be determined by arbitration unless they are contrary to public policy or not capable of settlement by arbitration under Malaysian law. |
| s 9 | Requires arbitration agreements to be in writing, which can include electronic communications, and allows them to be part of a larger contract or a separate document. |
| s 10 | Requires courts to stay proceedings and refer parties to arbitration if a valid arbitration agreement exists, unless the agreement is null, void, or incapable of being performed. |
| s 13 | Outlines the process for appointing arbitrators, including the option for parties to agree on a procedure or for the Director of the Asian International Arbitration Centre (Malaysia) or the High Court to make appointments. |
| s 23 | States that arbitral proceedings commence on the date the respondent receives a written request to refer the dispute to arbitration, unless the parties agree otherwise. |
| s 33 | Requires awards to be in writing, signed by the arbitrator(s), state reasons (unless agreed otherwise), and include the date and seat of arbitration. |
| s 36 | Declares that an award is final and binding on the parties and can be used as a defence or set-off in court proceedings. |
| s 37 | Lists the limited grounds on which the High Court can set aside an award, such as incapacity, invalid agreement, or conflict with public policy. |
| s 38 | On a written application, the High Court recognises as binding and enforces an award made where the seat of arbitration is in Malaysia, or an award from a foreign State, by entry as a judgment in its terms or by action, subject to ss 38–39; the applicant must produce the authenticated original award (or certified copy) and the arbitration agreement (or certified copy). |
| s 44 | Gives the arbitral tribunal discretion to decide on costs and expenses, including the ability to consider settlement offers when allocating costs. |
Worked examples
Facts. Ahmad's contract with Bina Sdn Bhd contains an arbitration clause. A payment dispute arises and Ahmad sues Bina in the High Court.
The law. An arbitration agreement may be a clause in a contract and must be in writing (s 9(2)–(3)). If Bina applies before taking any other step in the proceedings, the court shall stay the case and refer the parties to arbitration, unless the agreement is null and void, inoperative or incapable of being performed (s 10(1)).
Outcome. If Bina applies in time, the court will stay Ahmad's suit and the dispute goes to arbitration (s 10(1)).
Facts. Two parties, Chen and a supplier, agree to a three-arbitrator panel. Chen appoints one arbitrator, but the supplier fails to appoint one within 30 days of Chen's written request.
The law. Under s 13(4)(a), if a party fails to appoint an arbitrator within 30 days of a written request, either party may apply to the Director of the Asian International Arbitration Centre (Malaysia) for appointment.
Outcome. Chen applies to the Director of the Asian International Arbitration Centre (Malaysia) to appoint the missing arbitrator (s 13(4)(a)).
Facts. Global Traders obtains an arbitration award against Local Imports Sdn Bhd in an arbitration seated in Singapore and wants to enforce it in Malaysia.
The law. An award from a foreign State is, on written application to the High Court, recognised as binding and enforced by entry as a judgment or by action, subject to ss 38 and 39 (s 38(1)). The applicant must produce the authenticated original award or a certified copy, and the arbitration agreement or a certified copy (s 38(2)).
Outcome. Global Traders applies to the High Court with those documents; enforcement may be refused only on the grounds the Act allows (s 39).
Examples are simplified illustrations with invented names; real cases turn on their own facts.
Questions & answers
Does this law apply to all arbitrations in Malaysia?
Yes, the Act applies throughout Malaysia (s 3(1)). For domestic arbitrations with the seat in Malaysia, Parts I, II, and IV apply, and Part III applies unless the parties agree otherwise in writing (s 3(2)). For international arbitrations with the seat in Malaysia, Parts I, II, and IV apply, but Part III does not apply unless the parties agree otherwise in writing (s 3(3)).
Can I go to court if I have an arbitration agreement?
If you have a valid arbitration agreement, the court must stay proceedings and refer you to arbitration (s 10(1)). However, the court can refuse to stay proceedings if it finds the agreement is null, void, inoperative, or incapable of being performed (s 10(1)).
What if we can't agree on who the arbitrator should be?
If you fail to agree on the procedure or the arbitrator, either party can apply to the Director of the Asian International Arbitration Centre (Malaysia) for appointment (s 13(5)). If the Director fails to act within 30 days, you can apply to the High Court (s 13(7)).
Is the arbitration award final?
Yes, an award is final and binding on the parties (s 36(1)). The arbitral tribunal cannot vary, amend, or revoke the award except as specifically provided in section 35 (s 36(2)).
Can I challenge the arbitration award?
Yes, but only on limited grounds, such as if a party was under incapacity, the agreement was invalid, or the award conflicts with public policy (s 37(1)). You must apply to the High Court within 90 days of receiving the award, unless the challenge is based on fraud or corruption (s 37(4), s 37(5)).
Who pays for the arbitration costs?
Unless agreed otherwise, the arbitral tribunal has discretion to decide who pays the costs and expenses (s 44(1)(a)). If the tribunal fails to specify the amount within 30 days of a request, a party can apply to the High Court for the costs to be taxed (s 44(1)(b)).
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Sources
Related
Contracts Act 1950How a civil case runsCourts and their powersEnforcing a judgment