The Overlapping Powers Of The Courts And Arbitral Tribunal To Grant Interim Relief

• Author: Amy Nor Hannah Norhan and Serina Lim Ru Yee
• Law Firm: Shearn Delamore & Co.
• Published date: 16 June 2023

Introduction

Under section 11(1) of the Arbitration Act 2005 ("AA 2005"), the Malaysian courts are conferred with the power and jurisdiction to grant interim relief before or even during arbitral proceedings. Since the process to formally constitute an arbitral tribunal may take time, any party who wishes to obtain urgent interim relief may seek the same from the court by relying on section 11(1) of the AA 2005.

Once an arbitral tribunal is constituted, the arbitral tribunal then has the power to grant certain types of interim measures pursuant to section 19(1) of the AA 2005¹, which includes the phrase "unless otherwise agreed by the parties". This essentially means that parties may agree to exclude the arbitral tribunal's jurisdiction to grant interim measures and instead pursue the same from the courts. However, in the absence of such an agreement and to the extent where the interim measures under both section 11 and section 19 may overlap, there exists a concurrent jurisdiction of the arbitration tribunal and the Malaysian courts to grant the same.

In such a scenario, the pertinent question now arises: Do parties have the freedom to choose?

The Unwritten Rule

In the recent High Court case of Malaysia Resources Corporation Bhd v Desaru Peace Holdings Club Sdn Bhd², this same scenario was posed to the bench. Although there was an ongoing arbitration, the Plaintiff, who was the Claimant in the arbitration, filed an application for security for costs in the High Court instead of making the application to the arbitral tribunal.

It was the Plaintiff's case that, considering the concurrent jurisdiction of the Court and arbitral tribunal in this matter, parties have complete freedom of choice to apply to whichever body they so wish. The application was objected to by the Defendant, who instead argued that it should have been made to the arbitral tribunal.

Ong Chee Kwan J meticulously examined the drafting history of the AA 2005 and referred to case laws from jurisdictions such as Singapore and the United Kingdom. His Lordship drew parallels between the AA 2005 on the one hand and the Singapore International Arbitration Act 1994 ("SIAA 1994") and the old UK Arbitration Act 1950³ on the other.

What his Lordship concluded was this: it is an unwritten rule in the AA 2005 that a party must resort to the arbitral tribunal first notwithstanding the court's parallel jurisdiction. This is considering his analysis that:

1. The approach must be consistent with the...