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Dispute resolution

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.

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.