The Asian International Arbitration Centre (“AIAC”) Arbitration Rules 2021 (“AIAC Arbitration Rules”) take effect on 1 August 2021.
Aside from merging Part I and Part II of the AIAC Arbitration Rules 2018 with modifications, notable highlights of the AIAC Arbitration Rules include:
(1) Summary Procedure
Rule 19 of the AIAC Arbitration Rules provides for summary determination of a claim, counterclaim, or defence, either in whole or in part.
The tests for summary determination are laid down in Rule 19.1 as follows:
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The claim, counterclaim, or defence is manifestly without merit; or
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The claim, counterclaim, or defence manifestly falls outside the arbitral tribunal’s jurisdiction.
A party may submit a request for summary determination (“Summary Determination Request”) to the arbitral tribunal no later than 30 days after the filing of the statement of defence and counterclaim[1]. Upon receiving the Summary Determination Request, the other party has 15 days to respond[2].
The arbitral tribunal must decide whether to allow or dismiss the request, in whole or in part, no later than 45 days (unless extended by the Director of the AIAC after consulting the parties) from the receipt of the final submission[3].
(2) Fast Track Procedure
The AIAC Arbitration Rules introduce a Fast Track Procedure to govern the expedited conduct of arbitral proceedings administered by the AIAC[4].
A request for the operation of the Fast Track Procedure may only be made if:
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The parties have agreed to adopt the Fast Track Procedure (or any edition of the AIAC Fast Track Arbitration Rules);
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The amount in dispute is less than USD 500,000 for an international arbitration or less than RM 2,000,000 for a domestic arbitration; or
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There is exceptional urgency[5].
Under the Fast Track Procedure, the expected timelines for the arbitral proceedings are as follows:
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The parties can expect the closure of proceedings no later than 90 days from the delivery of the first Procedural Order.
(3) Clear Provisions for Virtual Hearings
To cope with changes brought by the pandemic and the consequential restrictions, the AIAC Arbitration Rules clarify and acknowledge the use of technology for remote participation in arbitral proceedings[6]. This includes attending or appearing at meetings, conferences, deliberations, or hearings using video conferencing platforms, telephone, or other appropriate means[7].
(4) Third-Party Funding
The AIAC Arbitration Rules address third-party funding and expressly provide for the arbitral tribunal’s power to make enquiries regarding the existence of third-party funding arrangements, including the third-party funder’s economic interest in the outcome of the arbitration. The parties may be directed to disclose such arrangements and any changes throughout the course of the proceedings[8].
Rule 1.4 stipulates that the use of third-party funding to finance a party’s share of arbitration costs shall not affect or preclude the adoption of the AIAC Arbitration Rules, unless otherwise provided by relevant law or a court order.
(5) Bifurcation of Hearings
Rule 13.5 stipulates that the arbitral tribunal may direct bifurcating proceedings.
Where proceedings are bifurcated and the tribunal intends to issue separate final awards for each issue, it shall declare the closure of proceedings for each final award[9].
(6) Confidentiality
The AIAC Arbitration Rules expressly state that the duty of confidentiality extends to the arbitral tribunal, the Director, the AIAC, any tribunal secretary, and any appointed witness or expert[10].
Rule 44.4 requires the parties to obtain confidentiality undertakings from all participants in the arbitration, including representatives, witnesses, experts, or service providers.
In the event of breaches, the arbitral tribunal may take appropriate measures, including issuing orders or awards for costs or damages[11].
Rule 44.6 allows the AIAC to publish an award with the parties’ express written consent, either in full or in excerpts, with all identifying information redacted.
(7) Appointment of Multiple Arbitrators
Rule 9(7) provides procedures for the appointment of arbitrators by multiple parties.
If two or more arbitrators are to be appointed and multiple claimants or respondents agree to act collectively, the following applies[12]:
| Timeline | Number of Arbitrators | Procedure |
|---|---|---|
| Within 30 days of the delivery of the notice of arbitration | Even-numbered tribunal | Each claimant (or group) and each respondent (or group) nominate half the number of arbitrators for Director’s confirmation. |
| Within 30 days | Odd-numbered tribunal | Each claimant (or group) and each respondent (or group) nominate an equal number of arbitrators. The arbitrators then nominate a presiding arbitrator for Director’s confirmation. |
If parties fail to reach an agreement, the Director will constitute the tribunal upon request, excluding previously nominated arbitrators unless agreed otherwise[13][14].
(8) Consolidation of Claims from Multiple Contracts
The claimant may submit a consolidation request where claims arise from multiple contracts between the same parties[15].
Rule 22.5 outlines the factors for the Director’s decision. If dismissed, the claimant must issue separate notices of arbitration and registration requests[16].
(9) Technical Review
For technical review, the Director may draw attention to any perceived irregularities in the draft award, including procedural history or content issues, without affecting the tribunal’s discretion on the merits[17].
(10) Emergency Arbitration
Pursuant to Rules 18.4 and 18.9, the emergency arbitrator must deliver the first procedural order within 3 days of appointment and the emergency award within 15 days of the first procedural order (subject to Director extension).
Other Notable Changes
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Rule 1.1(a) – The arbitration shall be conducted and administered by the AIAC where parties have agreed to AIAC arbitration.
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Rule 7(g) – Registration requests must state whether pre-conditions to arbitration have been satisfied or waived.
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Rule 27.4 – Parties may interview witnesses before they present oral evidence.
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Rule 32.3 – In multi-party arbitrations, the tribunal shall declare closure of proceedings for each final award.
For enquiries, please contact:
Kang Mei Yee FCIArb
Partner, Gan Partnership
E: meiyee@ganlaw.my
DISCLAIMER: This article is for general information only and should not be relied upon as legal advice. The position stated herein is as at the date of publication on 9 August 2021.
