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Disputes
Dispute resolution
Courts
The court system comprises Magistrates Courts, Sessions
Courts, the High Court, the Court of Appeal and the Federal Court. The
judiciary operates on the same principle fundamental to the common law system,
namely the principle of the independence of the judiciary from the executive
and legislative branches of the government.
Magistrates Courts have jurisdiction to determine cases
where the amount of the claim does not exceed RM25,000, while the limit of the
Sessions Court is RM250,000.
There is no monetary limit in terms of the amount of a claim
before a High Court and the High Court has original, revisionary and appellate
jurisdiction. No appeal from a decision of a High Court can be brought to the
Court of Appeal where the amount of the claim is less than RM250,000, except
with leave of the Court of Appeal.
The Court of Appeal is the final appellate court on matters
decided by the High Court in its appellate or revisionary jurisdiction, except
in rare cases where special leave may be obtained for a further appeal to the
Federal Court.
The supreme court in Malaysia, with advisory and appellate
jurisdiction, is the Federal Court. All appeals to the Federal Court are
subject to leave being obtained.
A judgment obtained within Malaysian jurisdiction by a
foreign company is enforceable as if the judgment had been obtained by a local
company or citizen. The enforcement modes available for enforcement of money
judgments or orders are, amongst others, a writ of seizure and sale, garnishee
proceedings, charging orders, the appointment of a receiver by equitable
execution, an order of committal or winding-up and bankruptcy proceedings.
The enforcement of foreign judgements in Malaysia is
governed by the Reciprocal Enforcement of Judgments Act 1958, which is modelled
on the UK Foreign Judgments (Reciprocal Enforcement) Act 1933.
Arbitration
The principal law-governing arbitration in Malaysia is the
Arbitration Act 2005. Established in 1978, the Regional Centre for Arbitration
at Kuala Lumpur (KLRCA) adopts the guidelines of the United Nations Commission
on International Trade Law Arbitration Rules and the UNCITRAL Model Law on
International Commercial Arbitration.
In relation to enforcement, the Arbitration Act has also
sought to streamline the process and various legislations that previously
applied. Section 38 of the Arbitration Act sets out the formal requirements
that a party needs to comply with when seeking an arbitration award to be recognized
as binding and enforceable by entry as a judgment in terms of the award.
Further to this, Section 39 of the Arbitration Act sets forth the grounds for
refusing recognition or enforcement, which are similar to the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Given
that the Arbitration Act now contains the relevant provision for the
enforcement of awards from Convention states, this has resulted in the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act
1985 being repealed.