In international business, a party contemplating concluding an arbitration agreement in a contract for the resolution of disputes or differences may be faced with a choice of the various types of arbitrations which can be conducted under either self-administered ad hoc or institutional rules or procedures.

Most branches of trade or industry have established arbitration procedures within professional bodies. Contemporary arbitration gives the parties wide latitude to establish whatever rules of procedure they deem appropriate.

There are structural contrasts between the types of arbitrations as is reflected in the manner by which cases are generally presented by the parties and apprehended by the arbitral tribunal.

However, in most situations, the type of arbitration is chosen by the parties not so much because they like it but rather because they have no other choice. While there are intrinsic merits in each type of arbitration, more often than not, the option evaporates and the chosen method normally prevails by default.

I deal with only two types of arbitration namely, ad hoc arbitration and institutional arbitration, their advantages and disadvantages over each other.

Institutional and Adhoc Arbitrations – Advantages and Disadvantages by Sundra Rajoo (November 2009)

Conference Flyer

By
MR.IVAN LOO

Chaired by
MR. SUNDRA RAJOO

5^TH NOVEMBER 2009 (THURSDAY)

SYPNOSIS
At a time of rapid building and infrastructure development in Malaysia and around the globe, this may be an opportune moment for construction professionals like architects, engineers and quantity surveyors and also building owners and design and build contractors to understand their basic rights and obligations when carrying out their respective functions. Interesting issues include whether there are concurrent liabilities in contract and in tort for designers, the standard and scope of these respective duties, the differences between a designer’s liability in a design only contract and a design and build/turnkey contract, and the effectiveness of any exclusion or limitation of liability clauses.

By
IR. HARBANS SINGH KS

Chaired by
MR. SUNDRA RAJOO

23rd MAY 2009 (SATURDAY)

Since its introduction in 1969, the Pertubuhan Akitek Malaysia (PAM) standard forms of building contract are used extensively in the private sector commercial, institutional, housing and other building projects. It is estimated that 90% of the building contracts in the private sector are based on a PAM form. As such, the PAM forms have become the defacto benchmark as the Malaysian Standard Form of Building Contract from its genesis in 1969 up to their last revision in 1998.

The PAM/ISM 1969 Forms has had its fair share of criticism and judicial scrutiny. The PAM 1998 Forms did, to a large extent address the shortcomings of the previous PAM 1969 forms and continued to be popular in the later part of the last century and to date. PAM has recently introduced a new set of standard forms entitled PAM 2006 Forms to replace the PAM 1998 Forms. Although the new forms are dated 2006, they were officially launched in 2007 and made available for use recently. .

The PAM 2006 Forms are stated to be a redraft of its 1998 predecessor. However, a closer scrutiny of the two Forms shows only superficial resemblance. The various provisions in the new Forms have been re-worded, reshuffled, and amalgamated. The risk allocation for time, money matters, quality issues and dispute resolution between the contractor, employer and consultant team has been shifted significantly. Although the PAM 2006 Forms contain some contemporary provisions, they are also more procedural requiring the contractor, employer and consultants to strictly adhere to time provisions with the attendant loss of rights or incurring of liabilities. Comparatively, the PAM 2006 Forms limit the rights of employers while reducing the risks borne by contractors. This reallocation of risks proportionately increases the employer’s exposure and burden in terms of claims and payments while providing more possible grounds for disputes between the contractor and employer. Further, the PAM 2006 imposes definite and at times, mandatory time periods on the Architect/consultant team to carry out certain duties, for example, certification and approvals within a specified time. The failure to do so may open the consultant team to professional negligence claims. Prima facie, the PAM 2006 Form has also not referred to nor dealt with directly the statutory requirements of the Certificate of Completion and Compliance (CCC).

In view of the impact of the new forms on all practitioners in the local building industry, this one day course has been formulated to address, as an overview (with emphasis on the PAM 2006 (with quantities) Form), the principal revisions that have been undertaken, the plus points of such revisions, the apparent deficiencies and drawbacks in practice, foreseeable areas of contention and possible improvements that should be made to make these forms relevant and applicable in the contemporary political, commercial and professional scenarios.

Speaker : SUNDRA RAJOO

SYNOPSIS

Malaysia saw a major overhaul of its arbitral regime with the enactment of the Arbitration Act 2005 (Act 646) which came into force on 15th March, 2006. The Act applies to all arbitrations commenced after that date irregardless of when an arbitration agreement is entered into. It is based on UNCITRAL Model Law on International Commercial Arbitration, repeals and replaces the Arbitration Act 1952 (Act 93), and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 1985 (Act 320), which implemented the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958.The talk will discuss the law, practice and procedure of arbitration in highlighting the changes and practical impact brought about by the Arbitration Act 2005.

20th and 21st October 2008

Venue: Shangri-la Hotel, Kuala Lumpur

The statutory law on arbitration in Malaysia can be traced to the Arbitration Ordinance XIII of 1809, which governed what were then the British India-controlled Straits Settlements, comprising of Penang, Malacca and Singapore. It was in force for nearly 150 years before the Arbitration Act 1952 (Act 93) replaced it.

The payment of interest on monies paid later than it should is a normal feature of modern contractual relationships. It is highly probable that a party would suffer financial loss resulting from late payment of principal sums which could lead to a claim in arbitration either as a debt or damages. Such loss is recovered as interest.

The award of interest in arbitration has become routine. In fact, it is now rare for interest not to be awarded where an award provides for payment of monies due. The availability and rate of interest in arbitration can have substantial practical importance. Such interest can be significant where the amount in dispute is large and the time periods involved are lengthy. At times, the ultimate interest award can exceed the principal sum in dispute.

The basis upon which interest is awarded does vary. The presumption is that an arbitral tribunal has the power to award interest just like its power to make an award in respect of any other claims submitted to it. The right to interest flows from either a contractual provision for the levying of late interest payment, or by virtue of the applicable law.

The flow of goods and services in a modern economy and international trade is based on contracts agreed by the parties. Such contracts are in turn based on trust that the other party will carry out the contracts as agreed. Should a dispute arise, it is possible to take legal action against a offending party. Commercial disputes may range from small to large ones.

Although there are no statistics, it is generally accepted that a large number of disputes never get anywhere near lawyers. It is inevitable that parties will try to turn away from allowing disputes to fester until they mature into a state in which third party interventions become the only available option. It is now common in international trade for commercial entities to evaluate risks and develop mechanisms for early dispute evaluation and prevention.

The procedures available for the resolution of trade disputes extend over a wide spectrum. Either, the parties resolve the disputes promptly by reaching an agreement on an “interest basis” rather than a “rights basis” or they are nipped in the bud before they can burst into flower.

In such circumstances, the parties assess whether it would be advantageous to implement a solution reflecting elements such as fairness, maintenance of long-term relationships and which of them will feel less pain in taking a hit.

It is suggested that an interest-based approach is not confined to a resolution that is based on rights claimed by the parties and remedies offered by the legal system, the mediator and the parties can probe more deeply to meet the disputants real interest and needs.

Delivery of a construction project is a process requiring the involvement of many parties. Apart from the developer and purchasers, there are a host of contractors, consultants and regulatory authorities. There are normally matters of considerable technical difficulties generated in the course of the actual works.

The Certificate Of Fitness for occupation problem
In particular, the housing sector has been plagued by many problems. A perpetual complaint relates to the issue of the Certificate of Fitness for Occupation as issued by local authorities (See s 3, The Street, Drainage & Building Act 1974 (Act 133) and the Uniform Buildings By-Laws for definition of the Certificate of Fitness for Occupation (‘CFO’)).

It is a normal occurrence that many developers give vacant possession without the CFO being issued. This has caused considerable difficulties to house buyers for such vacant possession does not mean beneficial takeover and ability to use of the relevant building lawfully.

The situation is no better even for commercial buildings and industrial premises. Disgruntled purchasers have complained to the Ministry of Housing & Local Government (‘MOHLG’) and other governmental authorities whenever there was delay or failure to issue CFO by local authorities. Such complaints have even been directed to activist consumer and non-governmental organisations such as the Consumer Association of Penang and FOMCA.

The Arbitration Act 2005 -
Published by Sweet & Maxwell, Tel : 603- 5633 0622 & Fax : 603- 5638 4049

The Arbitration Act 2005 (Act 646) came into force on March 15, 2006 and applies to all arbitrations commenced after that date regardless of when an arbitration agreement is entered into. The new Act, based on the UNCITRAL Model Law on International Commercial Arbitration, repeals and replaces the Arbitration Act 1952 (Act 93) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 1985 (Act 320). Malaysia has now seen a major overhaul of its arbitral regime.

This is the first commentary on the Arbitration Act 2005 to be published since the passing of the Act. The two authors are well-known arbitral practitioners. They were involved in the deliberations by the Bar Council of Malaysia which resulted in the submissions to the A-G’s Chambers of proposals that the new Act should be based on the UNCITRAL Model Law.

This timely book is a useful and insightful guide to the new Arbitration Act 2005. It provides a section-by-section commentary on the provisions of the Act that will give readers a clear appreciation of the new arbitral regime. The provisions of the Act are analysed with reference to those of other jurisdictions which have successfully implemented the UNCITRAL Model Arbitration Law for practical lessons and judicial interpretation of the statutory provisions.