Arbitration is a legal process whereby two parties agree to settle a dispute outside of a court of law. In Malaysia, arbitration agreements are common in commercial contracts.

An arbitration agreement is a written agreement between two parties that states that they will settle any disputes that arise out of the contract through arbitration instead of going to court. It is essential to include an arbitration agreement in a contract to avoid lengthy court proceedings and to ensure that any disputes are resolved quickly and impartially.

Here is an arbitration agreement sample Malaysia:

Arbitration Agreement:

This Arbitration Agreement (“Agreement”) is made and entered into this [date], between [Party A] and [Party B] (collectively, “Parties”).

Whereas, Parties desire to resolve any disputes arising out of any contracts or agreements between them through arbitration.

Now, therefore, the Parties agree as follows:

1. Arbitration. Any and all disputes arising out of or related to any contract or agreements between the Parties shall be resolved exclusively by arbitration conducted in accordance with the Arbitration Act 2005 in Malaysia.

2. Arbitration Rules. The arbitration shall be conducted pursuant to the rules of the Malaysian Trade Union Congress (MTUC), and the Parties agree to be bound by these rules.

3. Venue. The arbitration hearing shall take place in Kuala Lumpur, Malaysia.

4. Governing Law. The arbitration agreement shall be governed by and construed in accordance with the laws of Malaysia.

5. Arbitrator. The arbitrator shall be appointed in accordance with the rules of the MTUC, and the Parties agree to accept the arbitrator’s decision as binding and final.

6. Arbitration Costs. The costs of the arbitration, including the arbitrator’s fees, shall be borne equally by the Parties, unless the arbitrator determines that one Party should bear a greater share of the costs based on the circumstances of the case.

7. Confidentiality. The Parties agree to maintain the confidentiality of the arbitration proceedings and any documents related to the arbitration.

8. Arbitration Award. The Parties agree to accept the arbitration award as final and binding. Judgment upon the award may be entered in any court having jurisdiction thereof.

9. Waiver of Rights. The Parties agree to waive any right to trial by jury, and any right to participate in a class action or other representative proceeding.

In witness whereof, the Parties have executed this Agreement on the date first written above.

[Party A] [Party B]

Signature Signature

Printed Name Printed Name

In conclusion, an arbitration agreement is an efficient way of settling disputes, especially in commercial contracts. Therefore, it is essential to include an arbitration clause in a contract to prevent lengthy court proceedings and ensure a faster, cost-effective resolution of disputes. The above sample arbitration agreement Malaysia can serve as a guide when drafting an arbitration agreement for any commercial contract.