International arbitrator Prof. Sundra Rajoo, ex-director of AIAC (KLRCA) in Malaysian Kuala-Lumpur, meets Arbitration.ru
“The rapid success and speed of change in the Centre and my longevity as Director maybe have been construed by some that that I must be doing something extraordinary”
We know, that the Kuala Lumpur Regional Centre for Arbitration (KLRCA) (recently renamed as Asian International Arbitration Centre (AIAC)) was established by AALCO in 1978 in Malaysia. How many cases it had before you took your role in 2010?
The record shows that there was a cumulative total of 22 registered cases from 1978 to 2010.
You were appointed as the KLRCA Director in 2010, how many cases KLRCA had since then?
After I took over in 2010, it grew to 52 cases in 2011, 68 cases in 2012, 97 cases in 2013, 88 cases in 2014, 86 cases in 2015. With the introduction of statutory adjudication, the number of cases increased. I do not have the exact details but from my existing records, but from 2010 to 2018, there was a total number of 2,745 administered cases (arbitration, adjudication, mediation and domain name).
What measures the KLRCA took in order to boost its case load of domestic and international arbitration cases?
There were a number of holistic measures that I devised to bolster not only international cases but also, domestic cases of the Asian International Arbitration Centre (“AIAC”). Firstly, it sits in one of Malaysia’s most iconic buildings, Bangunan Sulaiman, formerly known as Kuala Lumpur Regional Centre for Arbitration (“KLRCA”). The idea was to have a seamless transition so that the Asian International Arbitration Centre (“AIAC” or “the Centre”) takes up the baton of its predecessor, the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”). It was aimed at broadening the boundaries beyond the horizon and deliver the future. Behind the new AIAC brand, we remained the same organization with a proven track record for the provision of world-class institutional support as a neutral and independent venue for the conduct of domestic and international arbitration and other alternative dispute resolution (ADR) proceedings. This new identity is a natural reflection of the ongoing commitment to the global ADR ecosystem and the stakeholders.
The Centre is dedicated to providing the best possible services and innovations in the industry, focusing on ADR, dispute avoidance and holistic dispute management. Despite the change in identity, AIAC remains loyal to the 40 years of heritage in Malaysia as the Centre was the first of its kind to be established under the Asian African Legal Consultative Organization (“AALCO”), an international organization comprising 47-member states from across the region. Formed pursuant to the host country agreement between Malaysia and AALCO, the AIAC is a not-for-profit, non-governmental international arbitral institution which has been accorded independence and certain privileges and immunities by the Government of Malaysia for the purposes of executing its functions as an independent, international organization. It is given the mandate to serve the region and as an international organization. My plan was to make it the Centre a provider of world-class institutional support as a neutral and independent venue for the conduct of domestic and international arbitration, and other ADR proceedings as part of the global ADR ecosystem.
These included capacity building between 2010 to 2018 by holding 30 over international conferences, 250 events and training programmes to create awareness, talent pool for export and become a leading ADR and specialist knowledge disseminator. We engaged in international collaborations with 48 agreements with international and domestic institutions putting Malaysia and AIAC on the global map with collaborations across the world. There were agreements with universities and institutions of learning to build capacity in terms of basic knowledge and expertise. The pioneering initiatives included for the then KLRCA to be the first arbitral institution in the world to adopt and modify the UNCITRAL Arbitration Rules 2010, create GAR award winning I-arbitration rules and also, being the first arbitral institution in Asia to conduct training in Islamic and sports arbitration. These rules are kept under constant revision to ensure relevance with commercial practicalities and expectations supported by guides and circulars to facilitate the use of and understanding of its rules.
Apart from the provision of institutional support for domestic and international arbitration and other ADR proceedings, AIAC under me offered hearing facilities and ancillary administrative services to tribunals operating ad hoc or under the auspices of another institution. The AIAC is also an official Court of Arbitration for Sports (CAS) alternative hearing centre. In its efforts in capacity building and disseminating information on ADR, the AIAC organizes various courses, training programmes and forums on the different avenues of ADR covering niche areas such as commercial arbitration, sports arbitration, maritime arbitration, adjudication, arbitral domain name dispute resolution and Islamic finance to create capacity, mould and shape the future of the ADR arena.
In conjunction with its 40th Anniversary in Malaysia, the Kuala Lumpur Regional Centre for Arbitration (KLRCA) was officially renamed as the Asian International Arbitration Centre (AIAC) on 7th February 2018. It was part of my strategy to make the Centre to become a premier dispute resolution provider and move towards becoming an international ADR provider. Therefore, the name change was part of a larger rebranding of the Centre, strengthening its regional footprint and presence globally. Along with the name change, the Centre also changed its domain name of its official website to www.aiac.world. This was done by way of the Arbitration (Amendment) Act 2018 which was gazetted on 10th January 2018 to signify the change of name. To officiate the name change, a signing ceremony of the Supplementary Agreement was held between the Asian-African Legal Consultative Organisation (AALCO) and the Government of Malaysia.
Between 2nd and 4th of March 2018, the AIAC hosted the 2nd AIAC-ICC Pre-Moot for the William C. Vis International Commercial Arbitration Moot with over 70 teams, close to 300 participants, 177 hearings with arbitrators from 21 countries competing for 13 prizes. It was the largest pre-moot in Asia of its kind and the second largest worldwide. Attendees of the Pre-Moot were as near from neighbouring ASEAN countries all the way to South America. They enjoyed a truly diverse experience in which they were able to interact with students and practitioners from numerous and different cultural and legal backgrounds.
Unlike most others, AIAC’s Pre-Moot permits students to participate without requiring registration for the Vis Moot (in Vienna) or the Vis East Moot (in Hong Kong). The curtain raiser to the Pre-Moot was The First Asian Conference for Students and Young Practitioners, wherein outstanding students and experienced arbitrators shared their practical and academic experience and ideas.
I understand that my work paid off and this year in March, the Pre-Moot had over a 100 teams participating. Hence, the recent decision by the William C. Vis International Commercial Arbitration Moot to use the AIAC Arbitration Rules for its 29th Moot competition 2 years from now.
On 9th March 2018, AIAC launched its new AIAC Arbitration Rules 2018, AIAC I-Arbitration Rules 2018, AIAC Fast Track Arbitration Rules 2018 and the AIAC Mediation Rules 2018. (all effective 9th March 2018).
The key features of the AIAC Arbitration Rules 2018 include the introduction of sophisticated provisions as to the arbitral tribunal’s power to award interest on any sums that are in dispute, including simple and compound interest. Additionally, parties to an international arbitration can now pay arbitral tribunal’s fees and administrative fees in currencies other than MYR and USD. AIAC was also one of the few arbitration centres in the world, which accepts payment in more than two currencies.
The AIAC Arbitration Rules 2018 also allow for the joinder of third parties to the arbitration proceedings and emphasise the ‘light touch approach’ taken by the AIAC by providing for a technical review of awards not going beyond errors in form and calculations made in the award.
The AIAC Fast Track Arbitration Rules 2018 provide for shorter time limits to ensure the speedy resolution of disputes: arbitration proceedings under the Fast Track Rules are designed to last no longer than 180 days. The arbitral tribunal in principle has only 90 days from the start of the arbitration until the conclusion of the oral hearing. Thereafter, the arbitral tribunal has another 90 days to draft the award. This 90 days’ time limit guarantees that the arbitral tribunal has the necessary time to deliberate and draft an arbitral award of the highest quality. The AIAC’s Fast Track Arbitration Rules 2018 are only applicable if the parties agree to their application. The AIAC became one of the few arbitral institutions in the world to respect party autonomy – the approach by other institutions is typically to apply expedited rules automatically, even when the parties had not explicitly agreed to them.
The fully revamped AIAC Mediation Rules 2018 provide a flexible framework for the conduct of mediation, yet effectively deal with particularly complex situations that may arise (e.g. confidentiality concerns, non-cooperation by one of the parties, etc.), thus ensuring time and cost-efficient settlement. Pursuant to the AIAC Arbitration Rules 2018, the parties are now free to commence mediation either where there is prior agreement to mediate, or, in the absence of such prior agreement, though the model submission agreement, or by making a proposal to mediate. The AIAC Mediation Rules 2018 cater most types of disputes or differences, including investor-State disputes. The AIAC is the first institution worldwide to model its mediation rules after the IBA Rules for Investor-State Mediation.
The AIAC was the first arbitral institution to have Shariah-compliant arbitration rules, The i-Arbitration Rules. The new AIAC i-Arbitration Rules (effective as of 9th March 2018) reflected the rebranding of the KLRCA to the AIAC. It also introduced a new provision under which the tribunal may award a late payment charge determined by the Islamic principles of ta’widhand gharamah.The I-Rules maintain all other Shariah-compliant provisions and other features.
The 2018 Rules were translated into seven languages including Malay, Indonesian, Arabic, Spanish, Russian, Chinese and Korean to ensure a global reach. I had planned to have further translations in German, French, Portuguese and Japanese. I am not sure if this plan is being followed through any longer.
On 6th April 2018, the AIAC launched the Standard Form of Building Contracts (AIAC’s SFC) 2018 Edition and the newly revamped web portal “sfc.aiac.world”. The earlier inaugural 2017 Edition of the AIAC’s SFC was an immense success being downloaded by both domestic and international users. In 2017, the AIAC launched its Standard Form of Contracts (SFC) – a suite of standard form contracts that are customisable and freely available for print and download. The AIAC’s SFC was inspired by the prevalent issues plaguing the Malaysian construction industry. It was aimed at filling the gaps of existing standard form building contracts in governing relationships, rights and duties of parties to a building construction project. It is user-friendly, incorporates plain English drafting, and includes clearer provisions to guide users in interpreting the contract.
The 2018 Edition of the SFC. While retaining the guiding principles set out in the original edition, the 2018 Edition includes enhancements that add clarity, improve certainty, and clear ambiguity where obligations and accountability of parties to the construction contract are concerned.
The revamped SFC web portalhas features to increase user-friendliness based on public feedback including personalised login credentials, and the ability to customise, save, store and share completed contracts. Registered users may also save incomplete contracts for later completion. Users will further benefit from the new Help Text feature which guides users in customising AIAC’s SFC. The SFC portal has altered access to information and has made it readily available to the stakeholders of the construction industry. As of July 2018, the portal has seen over 4000 users and many contracts customised and downloaded.
Additionally, in July 2018, the AIAC launched the Standard Form of Design and Building Contracts (Design & Build SFC). The Official Launch of the Design & Build SFC was attended by 300 construction professionals, lawyers, quantity surveyors, academicians and other interested stakeholders. The Design and Build SFC is intended to be more user friendly than its predecessors, drafted in plain English and contains a number of novel provisions, such as clearer consequences upon termination and corruption as one of the grounds to terminate. The Design & Build SFC innovatively addresses problems in the construction industry from grassroots. It incorporates the principles of contractual predictability as well as time and cost-efficiency which will prevent deadlocks in construction projects. In turn, this will encourage the continuity of works and working relationships in spite of any differences arising during a construction project.
Between 5th and 7th May 2018, the AIAC hosted the inaugural edition of the Asia ADR Week 2018. The 3-day conference delivered an “Asian experience” with guest speakers of diverse cultures and specialisations from all across Asia who focussed on the demands and needs of Asian businesses as well as on the resolution of disputes. The event attracted over 200 participants and more than 90 speakers and was made up of 11 sessions, 9 breakout sessions, and 2 impressive social events. The topics covered in the sessions during the first two days included: “Building a New Asia: A Spectrum of Opportunities” – a discussion on the future of ASEAN and beyond; “Business in Malaysia: Sharing Solutions, Getting the Deal Through”– discussion on the critical steps Malaysia must take to remain an attractive business hub; : “Innovation in Effective Cross-Border Contract Management” – a discussion on core competencies and innovations in contract management, such as contract automation; Rapid Fire Debate on the topic “Real Money, Real Investors, Real Time, Real Talk – What ADR Can Do For You”; “The AIAC Rules, Your Partner Throughout the Proceedings” – a session on sing the AIAC Rules to manage the costs of arbitration proceedings; “The Dawn of the Digital Era of ADR” – a discussion of the trends of digitisation and artificial intelligence and their applicability to dispute resolution. The final day marked the 2018 CIPAA Conference and the release of the AIAC’s 2018 CIPAA Report titled “Sharing Solutions”. The three days saw over 90 speakers and 250 participants attend the event.
On 6th May 2018, the AIAC launched the Asian Institute of Alternative Dispute Resolution (“AiADR”) at the AIAC’s 40th Anniversary Gala Dinner. The launch was officiated by H.E Prof. Dr. Kennedy Gastorn, Secretary-General of the Asian-African Legal Consultative Organization (“AALCO”). The AiADR is the first not-for-profit member-based Asian centre for ADR. I am still the President of the Institute. The AiADR is the first not-for-profit member-based Asian centre for ADR. Its motto is “Providing excellence in ADR” and the AiADR will provide affordable and education in the field of ADR – from Malaysia to the rest of Asia and other parts of the world.One of the factors typically overlooked regarding global ADR development is the limited spending capacity of professionals from less developed countries, both young and experienced, on education. This hinders not only the wider participation in ADR development, but also precludes this particular demographic from gaining the qualifications and experience they deserve. I decided to set up AIADR which will become the bridge that crosses jurisdictional boundaries, particularly across Belt Road regions. The AIADR is planning to offer a series of affordable online courses in various fields of alternative dispute resolution and allow everyone interested in alternative dispute resolution to join as a member at a highly competitive rate – all while offering its programmes at global standards.
Between 21st and 22nd July 2018, the AIAC hosted the “The Asian-African Legal Consultative Organisation (the AALCO) Annual Arbitration Forum 2018”. This forum coincides with the 40th year anniversary of the AIAC. The AALCO Annual Arbitration Forum is the first event of its kind that brought together all five Arbitration Centres established under the auspices of AALCO: the Asian International Arbitration Centre (the AIAC), the Cairo Regional Centre for International Commercial Arbitration (the CRCICA), the Lagos Regional Centre for International Commercial Arbitration (the LRCSCA), the Tehran Regional Arbitration Centre (the TRAC) and the Nairobi Centre for International Arbitration (the NCIA).
The theme was Connecting Asia and Africa, Connecting Investment and ADR: Opportunities and Challenges. In light of the rapid development of foreign investment and alternative dispute resolution in emerging markets such as Asia and Africa, the AALCO Annual Arbitration Forum could not have been more timely. The event explored salient topics, among others: the role of AALCO Arbitration Centres in facilitating investment and promoting the use of ADR, investment opportunities, the Belt and Road Initiative, and developments in the field of ADR in Asia and Africa.
Gracing the occasion was AALCO Secretary-General HE Dr. Prof. Kennedy Gastorn; the Honourable Chief Justice of India Dipak Misra; the Honourable Professor Palamagamba John Aidan Mwaluko Kabudi, Minister of Constitution and Legal Affairs of Tanzania; YB Datuk Liew Vui Keong, Minister in the Prime Minister’s Department (Law) of Malaysia; Professor Dato’ Dr. Rahmat Mohamad, Eminent Persons Group of AALCO; Court of Appeal Judge of Malaysia, YA Datuk Nallini Pathmanathan; and Chief Justice of Zambia, Irene Chirwa Mambilima. The event garnered active participation from stakeholders in Asia and Africa. The Speakers of this event were mainly practitioners and academics based in Asia and Africa with expertise in ADR mechanisms and investment law. Close to 300 participants attended this event.
The centre held its third AIAC Certificate in Sports Arbitration course in September 2018. AIAC also dedicated the whole month of September, hosting Sports Law related events that included a documentary on, “The War on Doping”, “The Great Sports Debate” featuring CAS arbitrators and “AIAC’s International Sports Law Conference”. The AIAC was named as the dispute resolution body for sporting disputes at the 2017 South East Asian Games and is currently spearheading efforts to establish the first Asian Sports Tribunal.
As in 2017, 2018 saw the AIAC engaging with local and international students in an attempt to disseminate information pertaining to ADR and to ensure that the future practitioners are exposed to ADR from the time they are in law school. In accordance with its MoUs with the University of Malaya and many other universities, the AIAC has offered many internships for local aspiring talents in 2018. Between March 2017 and May 2018, the AIAC YPG conducted more than 70 successful events, including two impressive pre-moots for the Willem C. Vis International Commercial Arbitration Moot. As of July 2018, the AIAC YPG has over 1,000 members both locally and internationally and it continues to grow from strength to strength.
Since March 2018, all newly registered cases have been managed electronically through the AIAC’s Case Management System. From July 2018, the AIAC’s Case Management System will have the capability of sending and receiving emails. It was part of the AIAC’s process improvements, which among others includes the digitisation of all incoming and outgoing documents relating to all adjudication proceedings registered at the AIAC and thus, ultimately, establish a “paperless” record system.
Arbitration is generally considered to be an efficient and cost-effective method of dispute resolution. In recent years, however, arbitration has faced criticism for being too costly: hourly rates for top-notch lawyers may exceed USD 1,000, interpreter fees are exorbitant and the costs for seminar rooms in hotels transformed into hearing and break-out rooms can easily reach USD 50,000 for one hearing alone. Many arbitral institutions have addressed these concerns by providing their own facilities for hearings. The better equipped they are, however, entails a greater cost to be borne by the Parties; this often negates the difference between arbitral institution’s own hearing rooms and that of luxury hotels offering similar services.
The old adage that quality comes at a (high) price does not hold true. One of my first projects in 2010 was to create a state of art hearing facilities. We moved from out old premises to Bangunan Sulaiman towards the end of 2014. It houses AIAC and has the following facilities:
· Extra Large Hearing Room with Court Recording & Transcription System (CRT)
· World-Class Hearing Rooms
· 2 Extra Large Hearing Rooms (Seating capacity: 50 pax)
§ 3 Large Hearing Rooms (Seating capacity: 22 pax)* (1 large hearing room with Court Recording Transcription (CRT))
§ 10 Medium Hearing Rooms (Seating capacity: 14 pax)* (1 medium room with CRT)
· 6 Small Hearing Rooms (Seating capacity: 10 pax)
· 3 Extra Small Hearing Rooms (Seating capacity: 6 pax)
· 12 Breakout Rooms
· 2 Discussion Rooms
· Auditorium (Seating capacity: 182 pax)
· Pre-Function Room
· Seminar Room (Classroom seating: 50 pax; Theatre seating: 80 pax)
· Garden Pavillion
· One Stop Business Centre
· Arbitrators’ Lounge
· Private Dining Room
· Outdoor Dining Area
· Ample Covered Car Park Spaces
o Specialised Alternative Dispute Resolution (ADR) and Construction Law Library (Open to the public)
· Ultra-modern Video Conferencing Equipment
It offers state of the art hearing centres at only a fraction of the costs of other arbitral institutions (or compared to hotel seminar rooms), as was shown in a survey by the Global Arbitration Review. It is the most affordable hearing facilities among arbitral institutions. Global Arbitration Review Guide to Regional Arbitration (Volume 6/2018) had also stated that “Bangunan Sulaiman has potential to be the best [arbitration hearing centre] outside the Peace Palace.”
The extra-large, large and medium-sized hearing rooms with court recording transcription software that enables live recording and transcription of video conferences for merely USD 398.00 for medium sized hearing rooms and USD 455.00 for large hearing rooms per day. In contrast to many other hearing centres, AIAC has a well-equipped library with a broad array of authorities in arbitration and construction law in particular, as well as free access to all prevalent online law databases, such as Kluwer Arbitration, Lexis Nexis, etc. There are no “hidden costs” when one conducts a hearing at the Bangunan Sulaiman. Should there be a need for IT technicians and video-conferencing specialists, it will be provided free of charge.
Another attraction of the AIAC and Bangunan Sulaiman lies in its strategic location. Malaysia is at the heart of South-East Asia, with numerous other countries in the region such as Bangladesh, Brunei, Cambodia, Hong Kong, India, Indonesia, Laos, the Maldives, Myanmar, Nepal, the Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam, being just four hours or less away by flight. The Kuala Lumpur International Airport is less than an hour away and the KLIA Express train connecting Kuala Lumpur and the Kuala Lumpur International Airport is in walking distance from the AIAC.
Booking a hotel for the full duration of a hearing can often be difficult due to the plethora of related issues such as expenses and availability, as noted in the above-mentioned Global Arbitration Review Survey. This is not the case at the AIAC: I arranged a partnership with The Majestic Hotel Kuala Lumpur, located just across the street from the Centre, allows participants of hearings to book rooms in the five-star Malaysian heritage hotel at the Centre’s corporate rate of only roughly USD100 per night.
Comparing the price of AIAC’s facilities with that of other institutions, as well as factoring in the cost of having a central location, state of the art rooms, quality transcription/IT services as well as affordable rates at a five-star hotel, I had calculated that participants can easily save up to USD5,000 or more per day when conducting an oral hearing at the AIAC. The AIAC’s Bangunan Sulaiman is one of the highest quality arbitration centres in the region, without sacrificing cost-effectiveness.
I worked tenaciously towards the continued development of domain name dispute resolution both regionally and globally, by providing for an alternative hearing avenue to the World Intellectual Property Organisation (WIPO).
Currently, the AIAC represents the Asian Domain Name Dispute Resolution Centre by acting as its Kuala Lumpur Office. Under that umbrella, and as the exclusive dispute resolution service provider for .my disputes, I developed a handbook that will simplify the time efficient procedures of matters administered under both the ADNDRC and MYNIC procedures. This handbook was distributed to law firms, legal practitioners (not limited to intellectual property practitioners), and lay persons to disseminate information about domain names and the resolution of disputes over domain names by the AIAC.
As part of the AIAC’s drive to expand its administrative practice in domain name dispute resolution, the AIAC has ventured into the Singaporean market by identifying select law firms and other stakeholders to market its products and services. A similar exercise is also being carried out with selected Malaysian law firms.
The AIAC had also submitted an application to the Internet Corporation for Assigned Names and Numbers (ICANN) to be an independent dispute resolution service provider and is currently waiting for ICANN’s feedback.
The AIAC was also accepted as the exclusive domain name dispute resolution provider for .bn disputes.
To raise awareness of its domain name dispute resolution services, I arranged various endeavours. Select AIAC staff have attended conferences in Seoul and Kuala Lumpur to showcase the AIAC’s structured administrative process of settling domain name disputes. Additionally, the AIAC has organised evening talks and workshops on domain name dispute resolution events to train its stakeholders. This included a half-day introductory workshop on the UDRP Rules in Manila (Philippines) in July 2018 attended by an array of international professionals working or interested in domain name dispute resolution.
Malaysia has the potential to gain the maximum benefit from Asia’s traction as the future playground for sporting events and dispute resolution. Strategically located in the heart of Asia and tapping from the Court of Arbitration for Sport’s (CAS) recognition of the Centre as its only official Alternative Hearing Centre in Asia, Malaysia is set to become the go-to place for sports dispute resolution. I proactively promoted capacity building in this niche area of the law. This has been achieved by organising three editions of the AIAC’s Certificate Programme in Sports Arbitration and creating a pioneering batch of specialised sports dispute resolution experts. I worked closely with the Olympic Council of Malaysia (OCM). Develop a mechanism for the resolution of sporting disputes in Asia through arbitration. The proposed dispute resolution model is based on the CAS. AIAC was the independent ad-hoc body for the adjudication of disputes during the 29th Southeast Asian Games 2017.
The Sports Law Association of Malaysia (SLAM) was established as a professional body to inspire leadership, reform and interest in sports law. I was its first President and created a knowledge-sharing platform for communication amongst sports lawyers and other stakeholders to achieve best practices amongst practitioners and share experiences with newcomers. It was intended to be a unifying platform for the interaction between sports and the law, extending beyond dispute resolution. With the impending formation of the Malaysian Sports Tribunal, SLAM will strive to bring together the ministry and sporting associations alike to deal with the intricacies of arbitration in sports whilst promoting the resolution of sporting disputes. This will range from conflicts involving jus ludorum (law of games) to that of commercial sporting disputes. Until recently, SLAM was located in Bangunan Sulaiman.
The AIAC is a longstanding partner of the International Centre for Settlement of Investment Disputes (ICSID). ICSID is the world’s leading institution devoted to international investment dispute settlement. It has extensive experience in this field, having administered the majority of all international investment cases. States have agreed on ICSID as a forum for investor-State dispute settlement in most international investment treaties and in numerous investment laws and contracts.
Cognisant of the importance of dispute settlement under bilateral and multilateral investment treaties, the AIAC signed its first collaboration agreement with ICSID in 1979. The two institutions decided to further strengthen their collaboration by signing a new agreement in 2014 (“2014 agreement”). In addition to fostering cooperation between the AIAC and ICSID, the 2014 agreement provides, inter alia, that the AIAC can be used as an alternative hearing venue for ICSID cases and participate in the administration of case, should the parties to proceedings conducted under the auspices of ICSID desire to conduct proceedings at the seat of the AIAC.
In addition to their numerous bilateral and multilateral arrangements, certain Asian States played a major role in the negotiation of the Comprehensive Investment Agreement that was signed by the members of the Association of Southeast Asian Nations in 2009 (“2009 ASEAN Agreement”). The objective of the 2009 ASEAN Agreement is to further intensify the economic cooperation between and among the ASEAN Members States. The agreement’s provisions on investment protection are in line with those included in the bilateral and multilateral investment treaties signed by Asian States. These include the assurances of national treatment, most-favoured-nation treatment, fair and equitable treatment, full protection and security, provision in respect of expropriation and compensation, and dispute settlement provisions. Section B of the said agreement provides for the resolution of investment disputes between an investor and a member State. In particular, article 33 of the same section allows for such disputes to be referred, inter alia, to the AIAC.
Should parties to a dispute decide to resolve their investment disputes by referring the case to an ad hoc tribunal under the rules developed by United Nations Commission on International Trade Law (“UNCITRAL Rules”), the AIAC has the experience to administer such a case. The AIAC Arbitration Rules draws extensively on the UNCITRAL Rules by including the UNCITRAL text in its entirety.
The AIAC, being an independent international body established under the auspices of the Asian African Legal Consultative Organisation (AALCO), is able to cover all needs of the parties involved in investor-State arbitrations. The Centre held its first International Investment Conference at the Bangunan Sulaiman in the first quarter of 2016.
AIAC successfully registered with the International Malaysian Society of Maritime Law (IMSML) on 29th October 2015. The IMSML launched in April 2016 to address a perceived need within Malaysia for a forum that would promote dispute resolution and information dissemination in the maritime law industry.
IMSML is a platform that brings together various stakeholders in the Maritime industry within Malaysia and the region, and is open to all sectors of the industry including lawyers, in-house counsels, corporate representatives, and arbitration practitioners.
Ever since its launch, the IMSML has been proactive in organising seminars conducted by maritime law experts, whilst marketing Malaysia as a hub for resolving maritime disputes.
A milestone for the IMSML was the creation of the “Certificate Course as an Introduction to Maritime Law” in collaboration with the AIAC. This dynamic three day course provided attendees with an informative introductory insight into the principles and practice of maritime law. Due its success, the IMSML and the AIAC have collaborated to once again offer this course between 24th July and 26th July 2018.
The AIAC was collaborating with the Companies Commission of Malaysia to create a dispute resolution system for Intra-Companies Dispute. The AIAC is also in the process of creating and conducting a training program in association with the Companies Commission for Directors and other officials on the theme of “Corporate Dispute Resolution Policy for Companies.” This training program was to be conducted in mid-2016.
When the mandatory adjudication was introduced in Malaysia? Can you explain the mechanism of it?
Adjudication is a rights-based dispute resolution mechanism with a strict time line to resolve payment disputes in the construction industry. With the naming of the AIAC as the adjudication authority by virtue of Part V of the Construction Industry Payment & Adjudication Act 2012 (“the CIPAA”), the centre has a key role to play in its capacity as the default appointing and administrative authority under the CIPAA.
In line with the coming into force of the CIPAA on 15th April 2014, the AIAC has come up with the AIAC Adjudication Rules & Procedure to supplement the CIPAA and to enable the centre to provide administrative support for the efficient conduct of adjudication proceedings.
The AIAC Adjudication Rules & Procedure also assist both adjudicators and parties in understanding the adjudication process.
Pursuant to the provisions of CIPAA and the AIAC Adjudication Rules & Procedure, the AIAC carries out the following responsibilities, inter alia:
• Setting the competency standard and criteria of an adjudicator. This is done by providing the relevant training courses to parties who are interested in becoming certified adjudicators.
• Certifying qualified adjudicators and listing them on the AIAC’s panel of adjudicators.
• Determining the standard default terms of appointment of an adjudicator and the fees for the adjudicator’s services. The AIAC Adjudication Rules & Procedure sets out the Standard Terms of Appointment and incorporates a Recommended Fee Schedule which can be adopted by the parties when negotiating the terms of the appointed adjudicator.
• Providing administrative support for the conduct of adjudication proceedings under the CIPAA. The AIAC administers all adjudication cases according to the AIAC Adjudication Rules & Procedure.
• Undertaking any other duties and functions as may be required for the efficient conduct of adjudication under the CIPAA.
• Making recommendations to the Minister on any application for exemptions. The application for exemption must comply with the procedure set out in Part B of the AIAC Adjudication Rules & Procedure.
• The AIAC maintains a copy of each and every adjudication decision delivered to it pursuant to Section 12 of the CIPAA and Rule 10 of the AIAC Adjudication Rules & Procedure.
In May 2018, I released the AIAC CIPAA Report 2018 titled “Sharing Solutions”. Through this report, the AIAC disseminated its administrative observations and statistical analysis of the overall changes and emerging trends in the construction industry. Notable statistics for the 2018 fiscal year (from 16 April 2017 to 15 April 2018) are as follows:
• Caseload – with 779 new cases received during the 2018 fiscal year, the AIAC saw an increase of around 39% in the number of adjudication cases. At this rate, the total number of cases is anticipated to reach 882 in the 2019 fiscal year.
• Number of adjudicators – the AIAC has empanelled 466 new adjudicators as at the end of the 2018 fiscal year. The AIAC also regularly conducts its Adjudication Certification Programme, which resulted in an approximate 25% increase in the number of Malaysian adjudicators empanelled.
• Efficiency (duration of the proceedings) – it is generally accepted that an increase in caseload will inevitably result in a decrease in efficiency. However, 48.83% of all adjudication cases administered by the AIAC were resolved in approximately 5 months. Additionally, 97.83% of adjudicators delivered their decisions within the time limit set forth in Section 12(2) of the CIPAA.
I expect with the implementation of the online case management system, there should be greater administrative efficiencies in the conduct of adjudication proceedings during the 2019 fiscal year.
With the advent of the Construction Industry Payment & Adjudication Act 2012 [CIPAA 2012], a new profession of Adjudicators has emerged. I set up and was the first president of the Malaysian Society of Adjudicators (MSA). The idea was to have a professional body to promote ethical & professional standards of service & conduct of adjudicators in Malaysia.
The Society is also set up to promote resolution of construction disputes by means of adjudication. It was formed for the Malaysian Construction Industry to benefit from the wealth of experience of the adjudicators associated with the introduction of CIPAA 2012. The Society’s purpose is to encourage and develop adjudication as a method of resolving construction disputes (without denouncing other dispute resolution methods, such as arbitration, mediation and conciliation) and also to provide a communication channel for which adjudication practices may be discussed among professionals. The Society publishes newsletters and other information materials as means of promoting the study of the law and practice relating to adjudication. Its membership is open to persons whose work, business and/or services are related to the area of law and/or practice relating to adjudication.
We know that under 1981 Agreement between the Government of Malaysia and the AALCO the Malaysian Government agreed to establish a regional centre of commercial arbitration in Kuala Lumpur and to provide the facilities for the establishment and functioning if such a center. At that time it was agreed that in addition to the Director and 3 members of the professional staff, the center would also have 7 junior staff members, including typists, “office boys”, a driver and a gardener and all these costs were covered by the Government of Malaysia. However, the number of support staff has grown significantly since that time. To which extend the AIAC is relying on own funding, and which portion of the budget is covered by AALCO and the Malaysian Government?
Yes, our success had fuelled our growth. Last year, we (AIAC) generated about income to cover 40% of our expenditure from case administration, room bookings, courses and events, management of our fixed deposits, etc. The Malaysian Government provides a yearly grant which varies based on our proposed activities and initiatives approved by the Malaysian Cabinet once every three years. The Centre works within the grant and its own generated income. Once the grant comes in, it is mixed with the Centre’s own funds. Therefore, the funds are outside the reach of the Malaysian Government and under the supervision of AALCO.
As the Malaysian state was funding the KLRCA for many years, I would assume that there was a procedure in place, by which the KLRCA presented its planned budget to the Government for approval and reported about the spending, is it correct? Or how the procedure looked like?
Unlike Malaysian Government departments, KLRCA/AIAC gets an annual grant, not an annual allocation based on approval by the Cabinet (Council of Ministers) once in three years. By convention, the Attorney General is Chairman of the Centre’s Advisory Board. The earlier Attorney Generals were quite hands on. Our once in 3 years budget application will be scrutinised and approved by him. The grant submission prepared on a spread sheet initiative as extracted from our externally audited accounts and projections supported with an explanation of the activities. It is then presented to the Minister’s office. The Minister’s officers will go through it to confirm that it is in order. The Minister will also direct the relevant department to prepare the Cabinet paper based on the Host Country Agreement. The Minister will present and get approval from the Cabinet. Every year the Centre will submit externally audited accounts with a report of its activities to AALCO and the Government of Malaysia.
We understand that you were accused for criminal breach of trust (CBT) relating to properties in three transactions; RM89,700; RM621,172.50; and RM300,495. What particular is incriminated to you?
I am accused of criminal breach of trust (CBT) relating to the buying of my Law, Practice and Procedure Book based on those three transactions. The three charges relate to the purchase of the said books.
We understand that one of the charges is that KLRCA purchased for further free distribution a number of books “The Law and Practice of Arbitration”, which you authored and which was published in 2016. Was this purchase envisaged by the KLRCA budget for the relevant year? Was the audited report for this year presented to the Government and approved by the Government?
The purchase was done as part of KLRCA/AIAC promotion strategy. Both AALCO and the then Attorney General as Chairman of the KLRCA Advisory Board were aware and approved the promotion strategy and budget which included the purchase and distribution of the books related to Malaysian arbitration and the Centre. The reason for choosing my book as it was the main/serious authority which discussed Malaysian law and KLRCA had become an authority much before all this. The book also benefited KLRCA/AIAC in bringing up its brand and name around the world. The audited accounts presented to the Government recorded the purchase of books under the relevant heads.
Did you personally benefit from this transaction (purchase of your book)?
I did not financially benefit from the purchase of the books because payment for the books were made to the publisher. I have waived my entitlement to royalties and even obtained an author’s discount for the transactions. The allegation is that I personally benefited from the purchase of the books suggesting that the books have no intrinsic value. AALCO disagrees and has taken the view that the purchase of my book on arbitration from a Malaysian perspective is a valuable contribution both to Malaysia and internationally especially given its recognition as a sound authority on the subject.
I have some difficulty of understanding what is the nature of this personal benefit and how to measure it. Such benefit must be concrete and not abstract such as a potential increase of my reputation as an arbitration specialist. I believe it is not really the case as I was already well known in the world of arbitration before I became Director of KLRCA and the Centre then was insignificant. When I first started on the job, I was the brand and the Centre benefited from it. It is difficult to say when the Centre become detached from my branding. The reason why the Centre has become known is the hard work that was done holistically starting from 2010 when I became Director. The various books that I had written while in the Centre, facilitated the process.
Your arrest was trigged by Malaysian Anti-Corruption Commission (MACC) investigation based on anonymous letter, in which it was alleged that you used public funds to influence ministers to get your term extended. Does MACC still pursue these charges? What is the basis for these allegations?
Yes, my arrest was trigged by Malaysian Anti-Corruption Commission (MACC) investigation based on anonymous letter in that I used public funds to influence ministers to get my term extended. I have identified the persons involved writing of the letter which included my former PA and ex-staff of KLRCA who were encouraged and assisted by some detractors involved in the takeover. MACC has not pursued these charges. I am not sure what is the basis for these allegations. I have explained in my affidavits why it is wrong and that the anonymous letter is baseless and totally false. Perhaps, the rapid success and speed of change in the Centre and my longevity as Director maybe have been construed by some that that I must be doing something extraordinary. Also, it is a way of ensuring that I was removed. The strategy succeeded.
As you, of course, know, many arbitration centers in order to promote them to international arbitration community, fund various activities, including organizing conferences (which could be attended free of charge), distributing hard copies of their rules, various guidelines, and even producing and broadcasting films promoting these institutions. Thus, buying for later free distribution books with the aim to promote arbitration in KL does not strike as something unusual for arbitration institution. Is there is a story behind the scene which was a real reason for all these unfortunate events?
You are correct to observe that many arbitration centres in order to promote them to international arbitration community, fund various activities, including organizing conferences (which could be attended free of charge), distributing hard copies of their rules, various guidelines, and even producing and broadcasting films promoting these institutions. Thus, buying for later free distribution books with the aim to promote arbitration in KL does not strike as something unusual for arbitration institution. I believe the real story is based on the simple fact that success bears envy and jealousy. Also, once something is set up and functioning well, the lazy and powerful will want to take over and enjoy the fruits. It happens in every society and age. The only problem that those who do that have very little regard to the consequences of their action and oblivious to the damage caused to individuals, institution and country. I only pray that now they have taken over, they maintain the momentum and don’t let the Centre drift back what it was before 2010.