Arbitration Agreement Malaysia Sample

Arbitration Agreement Malaysia Sample: A Comprehensive Guide

Arbitration is defined as a process of dispute resolution that involves a third party to settle disagreements between two or more parties. In Malaysia, arbitration is governed by the Arbitration Act 2005 and the Malaysian Code of Conduct for Practice of Arbitrators. An arbitration agreement is a legal contract that outlines the terms and conditions of the arbitration process. It is essential for businesses and individuals to have a well-drafted arbitration agreement to avoid any disputes that may arise in the future.

In this article, we will provide you with a comprehensive guide on arbitration agreements in Malaysia, including the importance of having one, the key parts of a valid arbitration agreement, and a sample agreement to help get you started.

Why Is It Important to Have an Arbitration Agreement?

An arbitration agreement serves as a contract between two or more parties that outlines how any disputes that may arise will be resolved. It is important to have an arbitration agreement because it offers numerous benefits compared to traditional litigation. Some of these benefits include:

1. Cost-effective and faster resolution of disputes

2. Privacy and confidentiality in the dispute resolution process

3. The ability to choose an arbitrator who is knowledgeable about the specific issues involved in the dispute

4. Parties have more control over the process and outcome of the dispute resolution

Key Parts of a Valid Arbitration Agreement

A valid arbitration agreement should include the following key parts:

1. Identification of the parties involved

The arbitration agreement should clearly identify the parties involved in the dispute. This includes their names, addresses, and contact information.

2. Dispute resolution clause

The dispute resolution clause should indicate that any disputes arising from the agreement will be resolved through arbitration. It should also provide details on the arbitration process, such as the place of arbitration, the language to be used, the governing law, and the number of arbitrators.

3. Choice of arbitrator

The agreement should provide for the appointment of an arbitrator or a process for the appointment of an arbitrator. The arbitrator should be impartial and have the necessary experience and qualifications to handle the dispute.

4. Governing law clause

The governing law clause specifies the law that will govern the agreement, the arbitration process, and the award. It is important to ensure that the governing law is clear and unambiguous.

5. Arbitration expenses clause

The arbitration expenses clause should clearly state who will pay for the arbitration expenses, such as the arbitrator’s fees, administrative fees, and other costs associated with the arbitration process.

Sample Arbitration Agreement

Here is a sample arbitration agreement that can be used as a starting point for creating an agreement that meets your specific needs:

Arbitration Agreement Malaysia Sample


In conclusion, having a well-drafted arbitration agreement can provide numerous benefits for businesses and individuals who engage in contractual agreements. It is important to ensure that the arbitration agreement covers all of the key elements necessary for a valid arbitration agreement, including the identification of the parties involved, the dispute resolution clause, choice of arbitrator, governing law clause, and arbitration expenses clause. By doing so, parties can take advantage of the benefits of arbitration, including cost-effectiveness, faster resolution of disputes, privacy, confidentiality, and more control over the process and outcome of the dispute resolution.