More parties are choosing arbitration as an avenue to resolve disputes for reasons such as flexibility as well as confidentiality in the proceedings, and the ease of enforceability of arbitration awards in various jurisdictions.

Under Malaysian law, arbitration awards may be recognised as binding and enforced as a judgment of the High Court under Section 38 of the Arbitration Act 2005 (“AA 2005”). The Federal Court recently in the case of Siemens Industry Software GmbH & Co KG (Germany) (formerly known as Innotec GmbH) v Jacob and Toralf Consulting Sdn Bhd (formerly known as Innotec Asia Pacific Sdn Bhd) & Ors (Civil Appeal No. 02(f)-115-12/2018(W)) (27 March 2020) clarified how these arbitration awards can be registered and enforced.

Brief facts

  1. The parties had entered into a settlement agreement where they agreed to submit any dispute relating to the settlement agreement for arbitration.
  1. In 2009, the Respondents (namely, Jacob and Toralf Consulting Sdn Bhd and others) commenced a suit in the Kuala Lumpur High Court against the Appellant (namely, Siemens Industry Software GmbH & Co KG) as well as the Appellant’s previous directors and its solicitor, alleging that fraudulent misrepresentation was practiced which induced the Respondent to enter into the settlement agreement (“High Court Suit”).
  1. An order to stay the High Court Suit was granted, so that the arbitration between the Appellant and the Respondents could take place. The Appellant commenced arbitration in Singapore following the arbitration clause in the agreement.
  1. During the course of arbitration, the Respondents filed a counterclaim against the Appellant for damages in fraud, deception and misrepresentation (similar to the relief sought for in the High Court Suit).
  1. However due to the Respondents’ failure to provide the required advances on costs, the arbitral tribunal made a finding that the counterclaim was withdrawn and proceeded to determine the Appellant’s claim.
  1. The arbitral award delivered in 2015 was not in favour of the Appellant. The award consists of 73 pages and is divided into 16 parts (Parts A to P) including witness testimonies, submissions, discussions and significantly, dispositions.
  1. The Respondents sought to register the entire award with intention to use the findings of the arbitral tribunal in the High Court suit against the other defendants therein. The Appellant opposed the application on the ground that only the dispositive portion of the award in “Part P. Dispositions” which sets out the exact relief granted by the arbitral tribunal was capable of being registered as a judgment of the High Court.
  1. The High Court agreed with the Appellant but the decision was reversed by the Court of Appeal which held that the AA 2005 does not allow for an arbitral award to be registered, recognised and enforced in part.


Decision of the Federal Court

The Federal Court overturned the decision of the Court of Appeal, and upheld the decision of the High Court that only the dispositive part of the arbitral award ought to be registered, and answered the following question in the affirmative:

Whether for the purposes of an application made under section 38 of the Arbitration Act 2005 and Order 69 rule 8 of the Rules of Court 2012 (“Recognition and Enforcement Application”), the recognition and enforcement of an arbitration award by way of entry as a judgment of the High Court of Malaya ought to relate only to the disposition of the said award and not the entire award containing the reasoning, evidentiary and factual findings of the arbitral tribunal?

The Federal Court’s reasons can be summarized as follows:

  1. The intent and purpose of Section 38 of the AA 2005 is to ensure that the reliefs granted by the arbitral tribunal could be enforced by way of execution proceedings by the successful party in the same way a judgment of the High Court can be enforced.
  1. By analogy to decisions of the Court, the disposition in an arbitral award is the order or judgment itself, whereas the entire award would be equivalent to the grounds of judgment. For the purposes of enforcement of a judgment, a successful party in Court would not rely on the grounds of judgment which embodies the findings or analysis of the Court in evidence, but would rely only on the order or judgment. As such, for purposes of registering and enforcing an arbitral award, the issues, reasoning and analysis of the arbitral tribunal is not necessary.
  1. To register an entire arbitral award would undermine the confidentiality of the arbitration proceedings which comprise the cornerstone of arbitration.
  1. The High Court dealing with an application under Section 38 of the AA 2005 is only a court of enforcement. The reasoning or findings of the arbitral tribunal would only be relevant to a Court which is considering the merits of the award, for example in an application to set aside the arbitral award under Section 39 of the AA 2005.


The AA 2005 was also amended in 2018 to include Section 41A(1) which provides that unless otherwise agreed by the parties, no party may publish, disclose or communicate any information relating to the arbitral proceedings or an arbitral award made in those proceedings. However, Section 41A(2) of AA 2005 allows the publication and disclosure of such information if it is “to enforce or challenge” the award in legal proceedings before a court in or outside of Malaysia.

In an application to court for enforcement of an arbitration award, it has been common practice for the applicant to adduce a copy of the entire award as an exhibit. As the award becomes part of an exhibit in court proceedings, it is publicly accessible by anyone who does a file search on the matter.  The Federal Court decision therefore makes it clear that the applicant no longer needs to exhibit the entire award. This protects the confidentiality of arbitration, and is in line with the spirit and nature of arbitration proceedings and the AA 2005.

Parties should still be mindful of the extent of confidentiality under the various rules of arbitration. For example:

  • under the ICC’s Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration under the ICC Rules of Arbitration (1 January 2019) (“ICC Note”), the ICC has supported the publication and dissemination of information about arbitration in order to facilitate the development of trade worldwide.  Under the ICC Note, parties and arbitrators in ICC arbitrations have to accept that ICC awards made from 1 January 2019 may be published in its entirety according to the provisions under the ICC Note. Parties are entitled to object to the publication or require that any award be anonymised.
  • Under the London Court of International Arbitration (LCIA) rules, an award may be published by the LCIA with the prior written consent of all parties and the arbitral tribunal.

Therefore, if confidentiality is of paramount concern, choices regarding the (a) seat of arbitration, and (b) rules of arbitration to be adopted, will play an important role in determining whether this primary objective can be achieved.


This article was written by Donovan Cheah and Yan Nie Th’ng. Donovan has been named as a recommended lawyer for labour and employment by the Legal 500 Asia Pacific 2017, 2018, 2019 and 2020, and he has also been recognised by Chambers Asia Pacific and Asialaw Profiles for his employment law and industrial relations work.

Donovan & Ho is a law firm in Malaysia. Our practice areas include employment law, dispute resolution, tax advisory and corporate advisory.  Have a question? Please contact us.


Buyer Beware: Asking the Right Questions before Signing the Offer Letter for a Malaysian Property
Survey Results: Cost-Cutting Measures due to COVID-19

Latest Articles

What is Willful Blindness?

by | April 9, 2024 |

LinkedIn Facebook Twitter Gmail Print Friendly The familiar saying, “turning a blind eye,” takes on new significance when it comes to the legal concept of willful blindness. Contrary to the […]

Case Spotlight: Seat of Arbitration in Domestic Arbitration

by | March 27, 2024 |

LinkedIn Facebook Twitter Gmail Print Friendly The “seat of arbitration” refers to the jurisdiction in which the arbitration takes place. It does not refer to a physical venue, but instead […]

Case Spotlight: Can a Sub-Contractor Claim Against the Employer Even If They Did Not Have a Contractual Relationship?

by | February 26, 2024 |

LinkedIn Facebook Twitter Gmail Print Friendly Quantum meruit means “as much as one has deserved”. It is a claim for a reasonable sum for the services supplied, where the services […]

Share This