Rise of International Arbitration in Sarawak

Photo : abangco.com

By Abang Iwawan

IN early 2020, the Sarawak Economic Council (SEC) formulated the Post COVID-19 Development Strategy 2030. It sets out Sarawak’s aspiration to become a high-income society, with a definitive goal of doubling the economy from RM136 billion in 2019 to RM282 billion in 2030.

In a time where climate change is globally recognised as the central pillar of ESG (environmental, social and governance), the Sarawak Government’s priority in striking a balance between economic growth and environmental sustainability will propel Sarawak as an attractive destination of choice for foreign investments.
With the rapid growth of infrastructure developments in Sarawak as well as increased participation of international entities, there will be an unprecedented rise in the number of cross-border disputes in Sarawak.
How then will these disputes that are subjected to cultural nuances and cross-border complexities be resolved?

Given its many benefits, arbitration, a form of Alternative Dispute Resolution (ADR), is often the preferred choice of resolving disputes in international commercial transactions. It is an alternative route to resolve disputes outside of the courtroom.
Due to its private and consensual process, arbitration allows more flexibility compared to court litigation. For example, parties have the autonomy to decide who shall be the decision maker (the arbitrator) to suit the nature of their dispute.

Malaysia has, since 1985, been a party to the New York Convention, including 169 other jurisdictions. Accordingly, any arbitration award made in Malaysia can be recognised and enforced in any of the contracting states, and likewise, an arbitration award made in any of the contracting states can be recognised and enforced in Malaysia – so long as the legal requirements for an enforcement are satisfied.

Malaysia’s popularity as an arbitration hub in the region has risen over the years with the Asian International Arbitration Centre’s (AIAC) success being a testament to that recognition.
AIAC, based in Kuala Lumpur, is Malaysia’s homegrown arbitral institution established in 1978. Recent statistics however revealed that out of the thousands of arbitrators empanelled with the AIAC, only three (3) empanelled arbitrators are from Sarawak.

AIAC’s efforts to collaborate with and empower local Sarawakians – as demonstrated in the recent roadshow held at Borneo Convention Centre Kuching on June 15 – should therefore be applauded.
Whilst there is still much work to be done to bridge the gap between the ADR scene in Kuala Lumpur and Sarawak, with the positive reception from the participants at the roadshow including the support of the Sarawak Government, the future of the international arbitration scene in Sarawak is undoubtedly promising.

■ Abang Iwawan is a Kuching-born ADR, Construction and Environmental Lawyer at Abang & Co. He is an empanelled arbitrator at the AIAC and Fellow of the Chartered Institute of Arbitrators, UK.

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