AIAC receives a Director after eight month vacancy

On 16 November 2020, Minister in the Prime Minister’s Department announced that former Malaysian federal court judge, Tan Sri Suriyadi Halim Omar, has been appointed Director of the Kuala Lumpur-based Asian International Arbitration Centre (AIAC) effective 1 December 2020. The third former judge to take this office and the first in 13 years, Suriyadi will be filling a vacancy left in the AIAC following the passing of Mr Vinayak Pradhan in March this year.

Suriyadi, 69, read law at Warwick University and qualified as a barrister in England. Before his elevation to the Malaysian bench, he served in Malaysia’s Attorney General's Chambers. As a judge, he sat in a number of cases on issues relating to arbitration and statutory construction adjudication. These include limitation periods in arbitration, the incorporation of arbitration clauses by reference, the interpretation of co-existing and conflicting jurisdiction and arbitration clauses, the interplay between statutory winding up proceedings and arbitration, stay of court proceedings commenced in breach of an arbitration agreement, the challenge of awards premised on the minority opinions in the arbitration, and the limitation period for enforcing awards as a judgment of the court. The former apex court judge also sat in a somewhat controversial decision which has been credited for shifting the speedy and summary practice of construction adjudication in Malaysia, and the interim finality which came with it, to a longer and more rigorous procedure where jurisdictional challenges can be mounted at any time, opportunities to raise new defences in response to an adjudication claim are enlarged, and the enforcement of adjudication decisions can be stayed pending a challenge to such decisions.

The office of Director plays a significant role in Malaysia’s ADR landscape. The Construction Industry Payment and Adjudication Act 2012 designates the AIAC as the adjudication authority for statutory construction adjudications in Malaysia. The role of Director includes maintaining a panel of adjudicators, appointing adjudicators for the parties, setting competency standards and criteria for adjudicators, determining standard terms of appointment and adjudicator fees, providing administrative support for statutory construction adjudication and performing ancillary functions for the efficient conduct of such adjudications. The Director plays a similar role as default appointing authority under the Arbitration Act 2005  and is crucially involved in arbitrations governed by the AIAC’s arbitration rules, including the commencement of arbitrations, the appointment of arbitrators and emergency arbitrators, joinder of parties and consolidation of proceedings, and the technical review of awards. The Director plays similar roles for mediations and domain name dispute resolution processes offered by the AIAC.

While usual case management practices had continued relatively unabated, Suriyadi’s appointment comes at a time of a mounting backlog of new requests for arbitration and adjudications, and other applications requiring a decision from the Director in the wake of the void left by Vinayak’s passing. The vacancy has also stymied early efforts to roll out a new suite of arbitration rules to provide a more modern and streamlined procedure for the conduct of arbitration proceedings when other arbitral institutions across the globe are in the midst of launching their revised rules. His appointment also coincides with the coming-into-force of Malaysia’s Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act 2020 on 23 October 2020, which will no doubt have some influence on both the conduct and outcome of disputes referred to the AIAC.

The vacancy in the office of Director has revealed unfortunate gaps in the AIAC’s institutional framework, which requires consultation and cooperation between the Malaysian Government and the Asian-African Legal Consultative Organization in the appointment process. This has allowed other arbitral institutions with different institutional frameworks to capitalise on the structured continuity of their administrative leadership. The AIAC has given its assurance that all pending registrations, appointment requests, decisions and approvals requiring the Director’s consideration will be the first order of the day come 1 December 2020.

For further information, please contact Peter Godwin, Partner, Daniel Chua, Associate or your usual Herbert Smith Freehills contact.

Disclaimer

Herbert Smith Freehills LLP is licensed to operate as a Qualified Foreign Law Firm in Malaysia. Where advice on Malaysian law is required, we will refer the matter to and work with licensed Malaysian law practices where necessary.