Question Rachel Law

Are there any differences between alternative dispute resolution in the UK and Malaysia?

Can i know what is the difference between Malaysia ADR and also UK ADR?

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Answer Internal Staff

Increasingly in recent decades, individuals and companies have sought a cheaper, faster and more flexible alternative to pursuing justice through the traditional judicial route and hence the legal sphere has seen the advent and surging popularity of Alternative Dispute Resolution (hereinafter ADR).

Given that ADR is often implemented in cross-border scenarios, there are typically more similarities that differences between the ADR systems internationally, and the United Kingdom and Malaysia are no exception, particularly given that the Malaysian legal system historically stems from the English common law system and English judicial decisions are still persuasive there. However, ADR pointedly lacks formal procedures and thus discrepancies do exist across its use in different countries(1).

Mediation, arbitration, conciliation and adjudication rank amongst the four most preferred ADR methods in both nations, with arbitration being particularly common in commercial spheres(2). In this area, Malaysia has adopted and implemented the UNCITRAL model law regarding commercial arbitration(3)(4), the leading international guidance on the matter, whereas the UK has, as yet, chosen not to directly implement it, although the 1996 Arbitration Act was clearly heavily influenced by it(5).

Interestingly, the law of limitation stands out as one of the key differences to ADR law; in the UK arbitration and other methods are subject to a law of limitation of six years from the date on which the cause of action accrued(6), Malaysia has a similar law but it only applies within West Malaysia, meaning there is not a standardized approach across the nation(7). Perhaps more notable is the difference in approach to third parties; under Malaysian law, only those who consent to ADR are bound by its outcome, whereas in the UK precedent has suggested third parties may be bound where they have agreed to be so by acquiescence or ratification(8).

References

1) See generally: Williams J, Lal H, and Hornshaw R, ‘Arbitration procedures and practice in the UK (England and Wales)‘ (1 September 2016) < http://uk.practicallaw.com/4-502-1378?service=arbitration> accessed 9 November 2016, and Ranai AKMS, ‘Arbitration procedures and practice in Malaysia (1 August 2011) < http://uk.practicallaw.com/9-507-1479?sd=plc> accessed 9 November 2016.

2) Abraham, DC ‘Alternative Dispute Resolution in Malaysia’ (ASEAN Law Association) < http://www.aseanlawassociation.org/9GAdocs/w4_Malaysia.pdf> accessed 9 November 2016.

3) United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration 1985, with Amendments as Adopted in 2008 (Vienna: United Nations, 2008).

4) 2005 Arbitration Act (Malaysia).

5) 1996 Arbitration Act (UK).

6) 1980 The Limitation Act, s.7-8 (UK).

7) 1953 The Limitation Act, s.30(1) (Malaysia)
8) Redfern A, Law and Practice of International Commercial Arbitration (2004 Sweet and Maxwell) 388-389.