Ingenieur Vol 71 ingenieur July 2017 | Page 78

INGENIEUR ARRESTING THE CRISIS OF CONFIDENCE IN ARBITRATION – A MALAYSIAN PERSPECTIVE By Lam Wai Loon Chartered Arbitrator Partner at Harold & Lam Partnership Chairman, Chartered Institute of Arbitrators, Malaysia Branch Deputy President, Society of Construction Law, Malaysia Vice President, Malaysian Society of Adjudicators I s there a crisis in arbitration? Whilst, according to Kuala Lumpur Regional Centre for Arbitration’s (KLRCA) Statistics on Arbitration Cases Registered, although there was a marked increase in the number of arbitration cases registered with KLRCA since 2010, we see a decrease in the number of cases registered with KLRCA after year 2013. Based on the statistics, there were a total of 22 cases handled by KLRCA in year 2010; 52 cases in year 2011; 135 cases in year 2012; 156 cases in year 2013; but in year 2014, the number dropped to 112; and in year 2015 (up to end of July) only 63 cases were registered with KLRCA. I submit that the decline is likely due to two reasons. The first reason is the improved efficiency in the speed of case disposal by the judicial court system in recent years, which now make arbitration proceedings seem to take a much longer time and cost more than court proceedings, and therefore less attractive compared to court proceedings. The second reason is the enactment of the fairly new Act called the Construction Industry Payment and Adjudication Act 2012, also popularly known as “CIPAA”, which came into force on April 15,2014. CIPAA introduces a 6 76 VOL - SEPTEMBER 2017 VOL 71 55 JULY JUNE 2013 statutory adjudication regime which provides for an interim, speedy and relatively cheap method of resolution of construction payment disputes in Malaysia. CIPAA allows the claimant to commence an adjudication proceeding for a payment claim under a construction contract during or after the completion of the project works, separately or concurrently with arbitration or court litigation on the same subject matter. Courts have become more efficient in terms of speed of resolution of disputes since the transformation exercise of the Malaysian judicial system led by our previous Chief Justice Tun Zaki bin Tun Azmi in 2009, and continued by our current Chief Justice Tun Arifin bin Zakaria. Cases are being disposed of faster, and this has in turn cut down the legal costs incurred by litigants in court proceedings. Today, commercial and civil cases are generally completed within 9 – 12 months from the date of filing, with only a small percentage of cases dragged longer than 12 months. This has invariably further raised the expectation of users in arbitration - an alternative dispute resolution (ADR) method which has long held itself out as a more efficient and cost effective alternative to litigation.