MALAYSIA DAY SPECIAL: ‘UNITY IN DIVERSITY’ OF DIFFERENT SEATS WITHIN THE JURISDICTION OF MALAYSIA?

​MALAYSIA DAY SPECIAL: ‘UNITY IN DIVERSITY’ OF DIFFERENT SEATS WITHIN THE JURISDICTION OF MALAYSIA?

Postscript: In a similar decision about the application of the seat in the jurisdiction of Malaysia, the case of Tekun Cemerlang[1], it procures a similar decision that, West Malaysia lawyers are prohibited to represent disputants in CIPAA Adjudication where the seats are in Borneo.[2] The repercussions spark suggestion that unlike arbitration, statutory adjudication has no seat.[3] Such opinion rely on the provision of CIPAA[4], as its basis or argument, consistent with the Latin maxim of “generalia specialibus non derogant”[5]. As of now, the decision remains.
 
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[1] Tekun Cemerlang Sdn Bhd v Vinci Construction Grands Projets Sdn Bhd [2021] 11 MLJ 50
[2] s.15, Advocates Ordinance (“AO”). The finding of the HC is in contrast with the provision of CIPAA (Section 8(3) of the CIPAA provides that parties to an adjudication proceeding “may represent himself or be represented by any representative appointed by the party”.
[3] Chaw G, “Statutory Adjudication in Malaysia and ‘Sabah Proceeding’: A Paradox”, [2021], 3 MLJ, p.10: the concept of a ‘seat’, which is part of the legal framework of arbitration law, does not exist in the law and practice of adjudication.
[4] ss 13, 15 and 16 CIPAA 2012
[5] a special law prevails over a general law

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This article attempts to address a ‘celebration of diversity’ in our Malaysia-Day, where even the law seems to be given a different interpretation to achieve unity in diversity by the Federal Court in the recent judgement of Masenang Sdn Bhd v Sabanilam Enterprise Sdn Bhd [2020][1], that has resulted in a tug-of-war of conflicting judgements between the HC in Kuala Lumpur and that of the HC of Borneo (“the conundrum”). To resolve this issue once and for all, the Federal Court holds that foremost, “The seat of a domestic arbitration cannot simply be said to be Malaysia. The seat is usually specified to be, for example, Kuala Lumpur, Malaysia, or Kota Kinabalu, Malaysia, or Penang, Malaysia, as the parties see fit to choose in their arbitration agreement or as determined by the arbitral tribunal pursuant to section 22 AA[2]”[3]; second, “the regulation and supervision of domestic arbitration is NOT governed by the law governing civil disputes such as the CJA which determines jurisdiction by ascertaining where the cause of action arose.[4] It is the AA and arbitral law that governs this issue even in domestic arbitrations”[5]; third, “the theory of the juridical seat is in point of fact directly relevant and essential in domestic arbitrations”[6]; and fourth, “[…]the seat of a domestic arbitration is in Kuala Lumpur [falls within] the jurisdiction of the High Court in Malaya, the High Court in Sabah and Sarawak enjoys concurrent jurisdiction to regulate that proceeding […] would not be the correct position in law [the AA] recognises that the supervisory court is the court at the seat of the arbitration. No such contravention or conflict with Art 121 of the Federal Constitution[7] can arise”[8].

In a nutshell, the finding of the court consistent with the arbitration law adopted by the ADR-community, that court will find in favour the ‘supervisory-court’ that follows the ‘judicial-seat of arbitration’ (‘seat’) agreed by the parties[9] or determined by the arbitrator, when the seat is not determine. However, the novelty of the findings of the FC in contrast with that of the Court of Appeal, is that the seat applied to domestic arbitration has to be clearly stated as to the ‘place of arbitration’ i.e., Kuala Lumpur, Sabah or Sarawak. This imply that the application of ‘private international law (‘PIL’)[10] in international commercial arbitration and to some extend of ‘forum non conveniens’[11] is applicable, a basis that the Appeal Court denounce the issue of the seat as irrelevant in domestic arbitration, as both the states of Malaya and Borneo, are under Malaysia and both share the same jurisdiction, including that of AA 2005. On the onset, this may look like ‘hair-splitting’ legal arguments to the minute-details that defied logic, but the intention is noble, that is to avoid a repeat of such conundrum.

Unlike the jurisdiction of the United Kingdom (‘UK’), Scotland is an entirely different jurisdiction, adopting the civil-law approach, as compared to England and Wales (‘EW’), with its common-law approach. Therefore, a domestic arbitration seated in Scotland is entirely different from one that is seated in EW. Both jurisdictions employed a different set of arbitration law, namely, Scotland with its Arbitration (Scotland) Act 2010, adopted the UNCITRAL Model-Law, while EW, the Arbitration Act 1996 (of England), that has more provision compared to the Model-Law. Thereupon, it makes sense as to state the actual place of arbitration in the English context, but for Malaysia, as a jurisdiction, that will be a novelty.
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As it is, the finding and judgement of the Federal Court is binding. I can’t help to acknowledge myself as Malaysian yet is different from my counterpart in Sabah and Sarawak. Perhaps such is what it meant by ‘unity in diversity’. Happy Malaysia-Day, we are One ‘Diverse-Family’.

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[1] Federal Court Civil Appeal No.: 02(i)-20-03/2020(S)
[2] Arbitration Act 2005: Seat of Arbitration
[3] Op-cit, para 185
[4] Ibid, para 140: “Applying the well- known Latin maxim of generalia specialibus non derogant, a special law prevails over a general law”
[5] Ibid, para 170
[6] Ibid, para 169
[7] Article 121: […] (a) one of the States of Malaya, which shall be known as the High Court in Malaya and shall have its principle registry in Kuala Lumpur; and (b) one in the States of Sabah and Sarawak, which shall be known as the High Court in Borneo and shall have its principle registry at such place in the States of Sabah and Sarawak […].
[8] Federal Court Civil Appeal No.: 02(i)-20-03/2020(S), para 136
[9] Conforming to the principle of party autonomy.
[10] Conflict of laws
[11] Another forum or court is more appropriate to hear the case