The Malaysian Bar refers to the recent expiration of the tenure of the former Director of the Asian International Arbitration Centre (“AIAC”), Tan Sri Datuk Suriyadi Halim Omar, on 1 December 2022.
The Malaysian Bar calls for the appointment of a Director of the AIAC without any further delay. The position of a Director is absolutely pivotal at an institutional level at the AIAC. In the six weeks since the AIAC has been without a Director, matters requiring administration by the AIAC have been suspended, resulting in the deferment of registration and commencement of new matters.
The importance of the position of the Director cannot be overstated. The current situation is untenable and only serves to erode public confidence in our country’s forefront alternative dispute resolution (“ADR”) mechanism. Any further delay in this appointment could have potentially detrimental consequences for parties who depend on adjudication and arbitration as a means of dispute resolution.
The approval from the Director is necessary at almost every level of proceedings in the AIAC. In the absence of a Director, a multitude of problems arise — new arbitrations cannot be registered, arbitrators cannot be appointed, ongoing arbitrations are hampered, and awards cannot be delivered. Under the AIAC Arbitration Rules and the Arbitration Act 2005, only the Director is empowered to carry out the key functions of the AIAC.
A vacancy in this office raises serious concerns about the administration of justice. This is particularly disruptive for claims under the Construction Industry Payment and Adjudication Act 2012 (“CIPAA”) where the AIAC is the sole administering authority. Without a Director being appointed, affected parties are deprived of their rights under CIPAA. The absence of a Director of the AIAC effectively means that adjudications under CIPAA cannot commence, and as a result, cannot be completed. This sort of uncertainty will only fuel the public’s disillusionment in the ADR processes. Such delay defeats the purpose of CIPAA, which is to facilitate speedy resolution of disputes to ensure cash flow in the construction industry.
The delay in appointing a Director also creates a domino effect that has already begun, resulting in negative repercussions in the business community. We are reminded of a similar disruption that was experienced in 2020 when there was a significant delay in the appointment of a new Director. The last thing we need is ambiguity and unpredictability in the progress of ADR cases in the AIAC. Until and unless the vacancy is filled, parties who need their ADR needs handled expeditiously may opt for arbitration centres in other jurisdictions such as the Singapore International Arbitration Centre or Hong Kong International Arbitration Centre.
The AIAC has grown from strength to strength over the years to become a reputable international organisation. Its potential is boundless, and in order to keep it competitive with arbitration centres from other jurisdictions as well as to promote Malaysia as a regional legal hub, the Malaysian Bar is hopeful that the appointment of a Director of the AIAC by the Government can made urgently, to ensure that ADR services can continue without interruption.
Karen Cheah Yee Lynn
12 January 2023