February 28, 2018
Newly named AIAC to launch new rules (by Alison Ross, GAR)
The Kuala Lumpur Regional Centre for International Arbitration today officially became the Asian International Arbitration Centre and announced the launch of new rules next month.
The name change came into effect pursuant to the Arbitration (Amendment Act) 2018, which was published in Malaysia's official gazette on 10 January and entered force today. The centre has a new website reflecting the change: www.aiac.world.
The centre's director, Sundra Rajoo, tells GAR that the rebranding was felt necessary in the KLRCA's 40th year to reflect the broad reach of its services and its international standing. "The new name was decided after careful consideration and with the centre's Asia-centric DNA in mind," he says.
It was also intended to highlight the centre's potential to handle disputes that are unrelated to Malaysia, including those arising from China's Belt and Road infrastructure development project.
"This is a new chapter for the centre as we turn 40 years old. We are thrilled," the centre's head of business development Hedran Daas tells GAR. "We look forward to continuing to actively promote and shape the future of ADR in Asia."
Dass adds that the centre's new arbitration, mediation and fast-track rules will be unveiled in a live online broadcast on 9 March. "The amendments are new, improved and put us on a par with the best jurisdictions in the world," he says.
The centre previously launched new arbitration rules in 2013 and last year.
As well as a further set of rules, Dass says 2018 will see the launch of "new and exciting products" by the centre and a shift from focusing on pure dispute resolution to focusing on dispute avoidance and management in line with a suite of standard form contracts that it issued last year.
This week the centre published its last annual report under the KLRCA brand, revealing that in 2017 it handled a record 932 ADR cases, including arbitrations, adjudications, domain name disputes and mediations.
The report does not state how many international arbitrations the centre handled but says there was a 100% increase from the year before. It says 73% of all arbitration cases, both domestic and international, concerned the construction sector.
The report also includes data on time and costs for cases conducted under the 2013 rules from their launch in October 2013 to 15 December last year, but not for cases under the 2017 rules which are all at an early stage.
It says the average duration of international arbitrations in this period was 10.6 months before a sole arbitrator, 10.5 months before a three-member tribunal and five months under the fast track rules. This was measured from the date of appointment of the tribunal to the date of final conclusion of the case, excluding suspensions of proceedings by party agreement and "extenuating circumstances like change of solicitors and complex interim applications made by parties."
The average arbitral tribunal fees for international cases in the period were US$36,602 for cases before a sole arbitrator and US$103,534 for cases before a three-person tribunal. For cases under fast-track rules (both domestic and international) the average tribunal fee was US$20,925.
The centre's average administrative fees for international cases were US$8,291 for sole arbitrator cases, US$12,095 for cases before three-person tribunals and US$5,469 for fast-track cases.
Average total fees for international cases were US$44,893 for sole arbitrator cases, US$115,629 for cases between three-person tribunals and US$26,393 for fast-track cases.
During this period, the average amount claimed in international cases was US$5.3 million and the highest amount claimed was US$15.2 million.
The centre says the data makes it "one of the most effective [arbitral institutions] in terms of costs and duration . . . given the average claim amount". It also highlights Malaysia's "modest cost of living" as an added advantage when comparing the cost effectiveness of various jurisdictions.
The report adds that in the past two years the centre has had over 3,000 bookings of its hearing facilities in the Sulaiman Building, a former colonial building in central Kuala Lumpur which GAR described in its 2016 hearing centre survey as having the potential to be "the best outside the Peace Palace".
Other achievements of the centre in 2017 included holding Kuala Lumpur International Arbitration Week, with 65 speakers and 200 local and international delegates, and 80 other "capacity-building" events.
It expanded its panel of arbitrators, mediators and adjudicators to include 2,069 names from 75 countries - including 1,156 arbitrators, of whom 1,027 are men and 129 are women.
It also signed 50 memorandums of understanding with institutions worldwide. And it was appointed as an independent authority to resolve disputes at the 2017 South East Asia Games held in Kuala Lumpur.
The next Kuala Lumpur international Arbitration Week will take place from 5 to 7 May.