Governing Law And Dispute Resolution Considerations In Malaysia

• Published date: 21 September 2023
• Law Firm: Azmi & Associates
• Author: Abu Daud Abd Rahim, Ling Shin Ying and Grace Wong Chai Lung

Introduction

Disputes can occur in our daily lives and could arise in different contexts, such as business, employment, family, and civil matters. People could use various methods and processes to resolve disputes and conflicts between parties, and this would be referred to as dispute resolution.

In Malaysia, several dispute resolution methods are available to parties, mainly categorized as litigation and alternative dispute resolutions. This article will briefly explain the different types of dispute resolution available in Malaysia.

Litigation

In Malaysia, litigation involves resolving disputes through the legal system. This typically involves going to court to present evidence and arguments supporting a particular position, with the end goal of obtaining a favorable judgment or outcome¹.

The litigation process in Malaysia is governed by a complex system of laws and regulations that includes both substantive and procedural rules. The primary sources of laws governing litigation in Malaysia are the Federal Constitution, the Civil Law Act 1956², and the Courts of Judicature Act 1964³.

During the pandemic lockdown in 2020, the Malaysian Judiciary recognises that the administration of justice cannot come to a grinding halt even though courts are not listed as an essential service under the Schedule of the Prevention and Control of Infectious Disease (Measures within the Infected Local Areas) Regulations 2020⁴.

Additionally, the Malaysian Judiciary has taken steps to amend the relevant laws such as the Courts of Judicature Act 1964⁵, Subordinate Courts Act 1948⁶, Rules of the Federal Court 1995⁷, Rules of the Court of Appeal 1994⁸, and Rules of Court 2012⁹ to give effect to the conduct of online hearings. Chief Justice Tengku Maimun stated in 2022 that the advent of online hearings is not merely a means to cope with the pandemic but a permanent feature of our justice system¹⁰.

The Court of Appeal in Ezzen Heights Sdn Bhd v Ikhlas Abadi Sdn Bhd¹¹ (Soh Yuh Mian, intervener) emphasized that the Court has broad inherent powers to avoid any abuse of process and to uphold justice in a regular and effective manner¹².

Alternative Dispute Resolution

The litigation process in Malaysia can be lengthy and complex, with multiple stages and opportunities for appeals and review. Some disputes may be resolved through alternative dispute resolution ("ADR") methods, such as arbitration or mediation, which might be faster and less expensive than traditional litigation. These...