MALAYSIAN LEGAL SYSTEM on Alternative Dispute Resolution

Prepared by Akmal Marizalee & Jamielyn Jimmy
2010937999 Group B
Rohani Ahmad Akmal Marizalee
Negotiation
 There two types of negotiation
a) Positional bargaining
- A negotiation where negotiator took on a position and undergo contest of will.
- Two position in this bargaining process:-
I- Soft positional negotiator
II- Hard positional negotiator
- Soft positional negotiator use soft approach
I- He will try to avoid contest of will against the other party.
II- He will make concession in order to reach settlement in order to maintain or
cultivate relationship.
III- He will accept agreement which is detrimental to him in order not to harm the
relationship with other party.
IV- The main objective is to reach settlement without harming relationship with
other parties
- Hard positional negotiator use hard and strict approach
I- He will try to win contest of will.
II- He will demand concession as condition for relationship & agreement.
III- He will only accept settlement that is beneficial to his interest regardless of the
detrimental effect to the other party.
IV- The main objective is to protect his interest.
- Therefore, it can be said that positional bargaining is where negotiator took a stand as a basis
for negotiation either to use soft or hard approach.
- The weakness of this method of negotiation is that the negotiator will often give more focus on
position rather than their dispute.
- This will cause the disputing parties to unable reach agreement.
- Even if the disputing parties may come to an agreement, the agreement may perhaps not be fair
to both sides.

2010937999 Group B
b) Principled Negotiation
- This method of negotiation was developed in the Harvard Negotiation Project.
- This method of negotiation focus on four principle
I- People
o The negotiator separates the people from the problem.
o They work as team and focus on the problem instead of the people.
o This principle is where the negotiator uses the hard approach against the
problem and soft approach against the people.
II- Interest
o Negotiator focus on interest instead of the position of the disputing
parties.
o This will enable both parties to safeguard their interest.
o Therefore, a more acceptable agreement to both parties may be
reached.
III- Options
o The parties may generate variety of possible solutions for the dispute.
o They may invent a solution from the variety of suggestion of options
generated.
o They may the pick the most suitable solution for mutual gains.
IV- Criteria
o The parties, may, in choosing the option for solution, insist that it must
be based on some objective standard.
o Both parties must be able to reason and be open to reason.
o This will enable a fair and mutually beneficial solution to both parties.
o The parties should only yield to the principle; they must not yield to the
pressure or a positional influence.

2010937999 Group B
 Collective bargaining and collective agreement is both governed by Industrial Relation Act (IRA)
Collective bargaining (CB)
- Definition
a)Section 2 of IRA
b) Negotiating with a view to the conclusion of agreement.
- Procedure
a)Section 13
(1) Invitation to start collective bargaining either by trade union of employers/employer or
trade union of employee.
(2) Invitation must be made in writing. The proposal which may be put forward, training for
workmen, annual review of wage system, r performance based remuneration system.
(3) May not contain proposal for promotion or dismissal or reinstatement of any worker as it is
the discretion of the employer.
(4) Reply notifying acceptance or rejection to the invitation shall be made within 14 days of
receipt of invitation.
(5) After invitation and reply notifying invitation is made, CB shall commence within 30 days of
receipt of reply notifying acceptance of invitation.
(6) If invitation is refused, or not accepted within 14days, or CB is not started within 30 days of
reply notifying acceptance to invitation, a party may make notification to Director General
(DG), in writing for him to take necessary step to commence CB without undue delay.
(7) If such step has been taken, and there is still refusal to commence CB, a trade dispute shall
deem to exist.

2010937999 Group B
Collective agreement (CA)
- Definition
a) Section 2 of IRA
b) An agreement in writing concluded between an employer or trade union of employer with trade
union of employee on matter concerning conditions & term of employment or relations
between employer and employee.
- Content of CA
a) Section 14 (2)
b) Must contain
I- Name of parties in agreement
II- The period it shall be enforceable (must be enforceable for at least 3 years)
III- Procedure for termination or modification of CA
IV- Procedure for interpretation or reference to court for any issue that may arise unless a
machinery to settle such issue is already provided.
- Procedure to enforce CA
a) Section 16
(1) Signed copy of document shall be jointly deposited by parties within one month from
the date of the agreement being entered into for court to take cognizance.
(2) Court may
I- Refuse to take cognizance if CA does not comply with requirement of Section 14, or
II- Before taking cognizance, require the parties to amend part of CA that does not
comply with Section 14.
(3) Court itself may amend the CA and enforce it if parties agree to the amended CA.
- Effect of CA
a) Section 17 (1)
CA is binding on
I- Successors, assignees, transferees of employer or trade union of employer.
II- All workmen employed, subsequently employed, or employed in the undertaking of the
said CA.
b) The effect of this section was illustrated in the case of Kesatuan Kebangsaan Wartawan
Malaysia v Syarikat Pemandangan Sinar.

2010937999 Group B
Mediation
 Process
Majlis Sulh Mediation
Mediation Session
a) Introduction to Majlis Sulh
b) Opening Statement
- Sulh Officer lay down ground rules in
Majlis Sulh process
c) Joint Session
- Parties discuss dispute in presence of
Sulh Officer
- Enable the officer to identify general
issues.
d) Private Caucuses (optional)
- Party discusses issues with officer
privately.
- Parties may vent hidden issues and
emotion and speak freely.
- Allows officer to identify hidden issues.
e) Subsequent Joint Session
- Allows parties to discuss issues with
officer and officer is able to facilitate
discussion with the information obtained
from previous sessions.
f) Settlement Agreement
- If there is a settlement agreement, may
be submitted to court to be endorsed
and become consent judgment.
- If there is no successful mediation
agreement, parties may proceed to trial.
Mediation Session
a) Pre- Mediation process
- Parties sign mediation agreement to
indicate their submission to mediation.
b) Mediators Opening (Opening Statement)
- Mediators lay down ground rules and
have a brief statement of facts be heard.
c) Joint Session
- Parties discuss dispute in presence of
mediator
- Enable the mediator to identify general
issues.
d) Private Caucuses (optional)
- Party discusses issues with mediator
privately.
- Parties may vent hidden issues and
emotion and speak freely.
- Allows mediator to identify hidden
issues.
e) Subsequent Joint Session
- Allows parties to discuss issues with
mediator and mediator is able to
facilitate discussion with the information
obtained from previous sessions.
f) Settlement Agreement
- If there is a settlement agreement, may
be submitted to court to be endorsed.
- Or it can be enforced as a mere contract.
- If there is no successful mediation
agreement, parties may try other ADR or
bring action to court.

2010937999 Group B
 Difference
Majlis Sulh MMC (Malaysian
Mediation Centre)
Compulsory or not
- Court annexed process.
Compulsory or not
- A voluntary submission process.
Charge
- Free of charge, salary of Sulh officer
is determined by State.
Charge
- Fees depend on the value of subject
matter in mediation and may be
charged with additional
administration fees.
Qualification
- Sulh officer must hold either:
a) 1st
Degree in Islamic Studies
b) Diploma in Administration and
Islamic Judiciary either form
UKM/UIAM
c) Any qualification equivalent to a
Syariah Subordinate Court Judge
Qualification
- Previous condition was 7 years
practicing as lawyer
- Now, open to all, provided, undergo
40 hour training and passed the
assessment to qualify as mediator.
Attendance
- Attendance is compulsory as it is part
of court’s process.
Attendance
- Attendance depends on parties as it
is a voluntary process.
Method of reference
- Parties must first file a case in
Syariah Court
Method of reference
- By either a joint submission or by
request to submit to mediation
process.
Governing law
- Is governed by State’s Enacment or
Federal Statute
Governing law
- Is only based on Mediation Rules
Mediator
- Sulh officer is a full time mediator
Mediator
- There shall be a part time (lawyer)
and full time mediator.

2010937999 Group B
Venue
- In the room of Sulh Officer as it is in
the same room as court.
Venue
- Parties may decided on place, or
may use the MMC building
Mediation agreement
- Parties do not need to sign mediation
agreement because it is a court
process. (please note mediation
agreement is an agreement to
submit to mediation. It is different
from settlement agreement.
Mediation agreement
- Parties must sign mediation
agreement as an evidence of
voluntariness.
Stage of reference
- Sulh process can be referred
a) After filing their case in Syariah
Court
b) Any time before judgment is
read.
Stage of reference
- May refer to mediation process at
any time.
Code of Etiquettes
- Kod etika Pegawai Sulh
- Sulh Rules 2001
- Manual Sulh
Code of Etiquettes
- MMC Code of Conduct
- MMMC Mediation Rules

2010937999 Group B
 Similarities
Majlis Sulh Mediation (MMC)
Outcome of successful mediation
- Endorsement will be sent to Court for a
consent judgment.
Outcome of successful mediation
- May be submitted to court to be
endorsed to be a consent judgment.
- Even if not submitted to court, the
settlement agreement is still enforceable
as a binding contract.
Outcome of unsuccessful mediation
- Proceed to trial
Outcome of unsuccessful mediation
- Try other ADR or bring action in court
Model adopted
- Facilitative mediation.
- Where officer act to assist parties to
agree for solution not impose solution.
Model adopted
- Facilitative mediation.
- Where mediator act to assist parties to
agree for solution not impose solution.
Qualification of accredited mediators
- Complete 40 hours training and status a
recognized mediator.
Qualification of accredited mediators
- Also to complete 40 hours of training to
be accredited as mediator.
Confidentiality
- The information is confidential.
- Officer cannot disclose information
except as provided in any statutory
provision.
Confidentiality
- The information is confidential.
- Mediator cannot disclose information
except as provided in any statutory
provision.

2010937999 Group B
 Roles
Sulh Officer Mediator
a) To provide basic legal information and
Hukum Syara’ where parties are not
aware of their rights as they were
unrepresented.
b) As middle person to 2 disputing parties
guiding them to a peaceful settlement
and also to persuade them to re-evaluate
the reasonableness of their claim.
c) Simplifying the party’s problem with the
aim of finding a solution.
d) Helping to reduce the workload of judge
by attempting to reduce the number of
cases pending in court.
e) Assist parties to negotiate and reach
mutually beneficial solution.
a) Help parties to come out with a solution
and explore these solutions.
b) Give options of solution when parties are
stuck in their dispute
c) Help both parties to see their interest.
d) Help parties to generate their options for
settlement.

2010937999 Group B
Conciliation
 Definition
- To pacify, or to cool down state of anger.
- Conciliation in dispute settlement is basically similar with negotiation, but differ in the use
of neutral third party to negotiate to reach settlement.
 Role of conciliator
- Contact & interview disputing parties.
- Assist parties in exchange of information
- Facilitate the resolution by suggesting options
 Conciliation & its uses
- Trade dispute
a) Industrial Relation Act
- Family matter
a) Law Reform (Marriage & Divorce) Act
b) Islamic Family Law (Federal Territories) Act

2010937999 Group B
 Conciliation in trade dispute Industrial Relation Act
- S18
(1) – If trade dispute failed to be resolved, either party to the dispute, may report to DG
(2) – DG may take necessary steps to promote settlement.
(3) – if the failed collective bargaining involves public interest, DG will intervene regardless of report
being made or not.
(5) – if still unresolved, DG shall notify Minister
- S19
(1) Parties must furnish relevant information and document to DG.
(2) DG may require the disputing parties to attend compulsory conference presided by him.
- S19A
 Minister may take necessary steps to conciliate trade dispute
- S19B
(1) Both parties may be
(a) Represent themselves with an officer or employee of their trade unions
(b) May be represented by any official of an organization of employers/employee
registered in Malaysia
(2) Parties may not be represented by lawyer

2010937999 Group B
 Conciliation in Family Matters
Difference
IFLA LRA
Governed by Section 47 of IFLA Governed by Section 106 of LRA
Conciliatory Committee
a) A religious officer as Chairman
b) One representative for each husband and
wife appointed by Court
Conciliatory Body (any of the following)
a) A council set up by authority of the
religion
b) A marriage tribunal which shall consist of:
I- A Chairman
II- Not less than 2 and not more than 4
members
III- Appointed by the Minister or officer
he delegate his power to
c) Any body approve by Minister.
Venue
- Department of Religious Affairs at the
given State
Venue
- Registrar of Divorces and Marriages set up
by Marriage Tribunal
Process
a) Conciliation under this Act is not
mandatory but the court may order for
conciliation only if
I- There is reasonable ground to salvage
the marriage
II- Where one party does not consent to
the divorce
Process
a) Conciliation is a mandatory process as
provided under this section in order to
proceed with the application of divorce
Outcome of successful conciliation
- Syariah court will dismiss the
application for divorce
Outcome of successful conciliation
- LRA is silent on the effect of successful
conciliation.
Exemption of conciliation process
a) Other party is residing in outside West
Malaysia and is foreseeable not to come
back within 6 months from date of
application.
b) Other party is imprisoned for 3/more
years.
a) Other party is residing abroad and is
foreseeable not to come back within 6
months from date of petition.
b) Other party is imprisoned for 5/more
years.

2010937999 Group B
Similarities
IFLA LRA
Method to count period to effect conciliation
a) Within 6 month from the date of
conciliatory committee being established
Method to count period to effect conciliation
a) Within 6 month from the date of reference
of the petition of divorce
a) Applicant alleged d that there has been a
desertion of spouse or unknown
whereabouts of spouse.
b) Applicants alleged other party is suffering
from incurable mental illness.
c) Where Court satisfied there is exceptional
circumstances
a) Applicant alleged d that there has been a
desertion of spouse or unknown
whereabouts of spouse.
b) Applicants alleged other party is suffering
from incurable mental illness.
c) Where Court satisfied there is exceptional
circumstances
Representation
a) Parties may not be represented by
Peguam Syarie.
Representation
a) Parties may not be represented by an
advocate or solicitor.
Outcome of unsuccessful conciliation
a) Court will issue certificate regarding
maintenance, division of matrimonial
property and custody of minor children
other matter related to marriage.
Outcome of unsuccessful conciliation*( note that
the section for this is S47(5))
b) Court will issue certificate regarding
maintenance, division of matrimonial
property and custody of minor children.
Grounds for conciliation
a) When there is a reasonable possibility of
conciliation between parties.
Grounds for conciliation *
(note that the section for this is S55(2))
a) Where there is a possibility of conciliation
between parties to the marriage.

2010937999 Group B
Disciplinary Board
 Establishment & Composition
- Section 93 of Legal Profession Act (LPA)
- Proceedings for disciplinary purpose shall be under Disciplinary Board established under
this proviso.
- Disciplinary Board shall consist of
a) Chairman which is a judge or retired judge (of High Court/ Court of Appeal/ Federal
Court) that is to be appointed by Chief Judge after consultation with Bar Council.
b) President of Bar Council or any member of Bar Council as his representative.
c) Fifteen practitioner members of Bar Council of 15 years standing appointed by Chief
Judge for a term of two years.
- The chairman of the Disciplinary Board, President of Bar or his representative shall disqualify
themselves in the interest of justice and the remaining members of Disciplinary Board shall
elect one of them to preside over the meeting.
 Power of Disciplinary Board
- Section 94 of LPA
- Advocate been guilty of misconduct shall be liable to be struck off the Roll or suspended
from practice for any period not exceeding five years or ordered to pay a fine.
 Complaint
- Section 99
- Any complaint of misconduct of any advocate and solicitor or of any pupil shall be in writing
and referred to the Disciplinary Board.
 Investigation of Complaint
- Section 100
- If there is no merit in the complaint, shall dismiss the complaint and notify both complainant
and the advocate and solicitor.
- If there is merit in the complaint, the Board shall require a written explanation.
- Whether the advocate and solicitor provide a written explanation or not, after the
expiration of period to produce written explanation, the Board may determine,
a) if formal investigation is necessary, proceed to appoint Disciplinary Committee
b) if no formal investigation is necessary, proceed to consider the merit of the complaint.

2010937999 Group B
 Disciplinary Committee
- Section 103A
- If formal investigation is necessary, Board will appoint Disciplinary Committee from
Disciplinary Committee Panel.
- Shall consist of three persons
a) Two advocates and solicitors
b) One lay person
- Section 103B
- The Disciplinary Committee shall commence its investigation of the complaint into writing
and report to the Board.
- Section 103C
- Disciplinary Committee shall record its finding and make recommendation
a) That no cause for disciplinary action exists.
b) That cause of disciplinary action exist but is not enough to warrant punishment except
for warning
c) There is merit to complaint and disciplinary action should be taken.
- Section 103D
- The Board may affirm, reject the recommendation by Disciplinary Committee.
- Section 103E
- Appeal from decision of Board may be made to High Court, then Court of Appeal, then
Federal Court.
 Pushpam v Majlis Peguam Malaysia
- The issue of the breach of natural justice audi alteram partem does not arise as the
judgment granted in her absence was due to her own fault.
- Misusing client’s money also falls to dishonest act.
 Teoh Hooi Leong v Bar Council
- Restoration of the names struck off the Roll is possible provided that he proved that he is a
proper and fit person. The court may restore if it thinks it is fair to the interest of public and
also, to the interest of the person concerned.
 Dato Kanalingam v Bar Council
- There is a breach of natural justice nemo judex in causa sua with the participation of
President Bar Council in the Disciplinary Board where he should disqualify himself as Bar
Council is the complainant of this misconduct.

2010937999 Group B
Arbitration
 Definition
a) Arbitration
- Grace Xavier – Law and Practice, Arbitration in Malaysia
- Agreement of parties to submit all existing and future dispute to arbitration.
- Syed Khalid Rashid – ADR in Malaysia
- Legal process which enables parties to a contract to refer their disputes to an arbitrators or
panel of arbitrator.
b) Section 2 of Arbitration Act (AC)
- Arbitral tribunal
Means sole arbitrator or a panel of arbitrator.
- Award
Decisions of arbitral tribunal on the substance of dispute but does not include interlocutory
order.
- Presiding arbitrator
Means arbitrator designated in arbitration agreement to be presiding arbitrator, or
chairman of arbitrator tribunal, a single arbitrator, or the third arbitrator appointed by the
two arbitrators. (Basically, arbitrator that is agreed by both party to have power to give
award)
- Seat of arbitration
Means the place where the arbitration is based on. (referring to the process and the rules
that apply to the arbitration process is the rule applicable in the rules of the place not the
venue of arbitration)
- Arbitration agreement
Agreement to submit all or part of the dispute that may arise or already exist to the
arbitration process (definition pursuant to Section 9)

2010937999 Group B
 Type of arbitration
- Section 3
a) Section 3 provide for two types of arbitration, domestic and international arbitration.
b) Difference
Domestic arbitration International arbitration
1) Definition
- Section 2
- Arbitration which is not international
arbitration.
2) Application
- Section 3
- Part III of AC shall apply unless party
agreed otherwise in writing.
1) Defintion
- Section 2
- One of the parties to arbitration, at
the time of conclusion of that
agreement, has it place of business in
other State than Malaysia.
- Or
- Any three situation
a) The seat of arbitration is
determined outside Malaysia.
b) The substantial part of obligation is
to be performed outside
Malaysia.
c) Parties have expressly agreed that
the subject matter of arbitration
agreement relates to more than
one State.
2) Application
- Section 3
- Part III of AC shall not apply unless
party agreed otherwise.
 Form of arbitration agreement
- Section 9
- Arbitration agreement is an agreement by parties to wholly or partially of the existing
dispute or which that may arise in the future.
- Form of arbitration agreement may be in form
a) Arbitration clause in an agreement
b) In a separate agreement to submit to arbitration.
- Arbitration agreement must be in writing.

2010937999 Group B
 Order to submit to arbitration agreement ( stay of proceeding)
- Section 10
- Party may apply to court prevent the other party from commencing action in court and to
have them submit to arbitration.
- The condition is, party must not take any other steps but to stay those proceeding.
- In the case of Sanwell, the Federal Court held that the meaning of not taking other steps is
that the party must enter unconditional appearance.
- But the court may reject this application if;
a) The arbitration agreement is void.
b) The dispute in action is not a subject matter to the arbitration agreement.
 Number of arbitrators
- Section 12
- International arbitration, three arbitrators.
- Domestic arbitration, single arbitrators.
 Appointment of arbitrators.
- Section 13
- Parties are free to appoint arbitrators.
- If parties failed agree on appointing arbitrators, each party may appoint arbitrator from
their part, and the two arbitrator shall appoint the third arbitrator ( which shall be the
presiding arbitrator)
- If both the appointed arbitrator fails to appoint the third (presiding) arbitrator within the
period agreed between parties, either party may apply to the Director of Kuala Lumpur
Regional Centre for Arbitration (KLRCA) for such appointment.
- In arbitration with single arbitrator, if parties failed to agree on arbitrator appointment or
procedure of appointment, either party may apply to Director of KLRCA.
- If parties agreed with the procedure of appointment of arbitrators, but
a) Fails to act under such procedure or
b) Unable to reach agreement under such procedure
Either of them may apply to Director of KLRCA to take measures to secure appointment of
arbitrator.
- If Director of KLRCA fails to perform as such within 30days of request, parties may apply to
High Court for such appointment.
- Director of KLRCA shall, take into accounts when appointing the arbitrators
a) Qualification required by parties
b) Other factor to secure independent of arbitrator.
- No appeal against the decision of Director or High Court in appointing arbitrators.

2010937999 Group B
 Grounds to challenge arbitrators
- Section 14
- Potential arbitrators shall disclose any factors that may give rise to the elements of
impartiality.
- Arbitrators may be challenged if
a) The circumstances give rise to justifiable doubts of the arbitrator impartiality or
independence.
b) Does not possess the required qualification.
 Procedure to challenge arbitrators
- Section 15
- Parties shall first send a written statement of the reasons to challenge the arbitral tribunal
or arbitrator.
- If the challenged arbitrator does not withdraw himself, the arbitral tribunal shall make a
decision on the challenge.
- If the challenge is unsuccessful, may apply to High Court, within 30 days of notice of decision
rejecting the challenge.
- The arbitration proceeding may progress regardless of the fact that the application is
pending in court.
- No appeal shall lie against decision of High Court.
 Conduct of proceedings
- Section 20 – equal treatment
- Both parties shall be treated equally and be given opportunity to present his case
- Section 21 – procedure of arbitration
- The arbitral tribunal shall decide on the rules of procedure subjected to AC
- Section 22 – seat of arbitration (juridical seat – applicable law)
- Seat of arbitration shall be determined by arbitral tribunal taking into account circumstances
of case and convenience of parties.
- Section 23 – Commencement of proceeding
- Shall commence on date on which a request of writing for that dispute to be requested by
the respondent.

2010937999 Group B
- Section 24 – Language
- Arbitral tribunal shall determine the language to be used.
- May order documentary evidence to be accompanied with translation.
- Section 25 – Statement of claim and defence
- The claimant shall state facts supporting his claim, points at issue, and relief he sought.
- Respondent shall state his defence against the claimant.
- Section 26 – Hearing
- Arbitral tribunal shall decide whether to hold oral hearing for presentation of evidence or
oral argument, or conduct the proceeding on the basis of documentary evidence only.
- Section 27 – Default of party
- If claimant fails to communicate statement of claim, or respondent fails to communicate
statement of defence, or any party fails to appear at hearing or to produce documentary
evidence, arbitral tribunal shall make an award against the defaulting party.
 Termination of arbitral proceeding
- Section 34 - The arbitral proceeding may be terminated by;-
a) After granting final award
b) Claimant withdraw claims
c) Parties agree on terminating the proceeding.
d) The arbitral tribunal find the continuation of proceeding is either unnecessary or
impossible.
 Effect of award
- Section 36
- Award shall be final and binding.
 Application to set aside award
- Section 37
- may set aside if party is able to prove any of the following
a) A party under arbitration agreement was under any incapacity.
b) The arbitration agreement is invalid under the law it is subjected to.
c) The award is out of scope of arbitration agreement.
d) The composition of arbitral tribunal is not within parties agreement.

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