The enforcement of annulled arbitral awards remains a complex and controversial issue in international arbitration, particularly under the New York Convention 1958 (NYC 1958). While the Convention facilitates the recognition and enforcement of arbitral awards, it also allows national courts to refuse enforcement if an award has been set aside at its seat. This discretionary power has led to inconsistent enforcement practices across jurisdictions and heightened the risk of forum shopping, where award-creditors seek enforcement in more favourable forums despite annulment. This paper examines Malaysia’s approach to the enforcement of annulled arbitral awards under the Arbitration Act 2005, which incorporates both the NYC 1958 and the UNCITRAL Model Law. Although no Malaysian case has directly dealt with annulled foreign awards, judicial reasoning in related cases suggests a restrictive position, with courts deferring to annulment decisions made by supervisory courts. Using a doctrinal and comparative legal methodology, the paper analyses Malaysian statutory provisions, case law, and international arbitration principles. It also considers whether Malaysian courts have residual discretion to enforce annulled awards in exceptional cases, particularly where the annulment offends public policy or procedural fairness. This study contributes to the growing body of literature on cross-border dispute resolution by clarifying Malaysia’s legal position, assessing its consistency with global best practices, and offering reform proposals to strengthen legal certainty in the enforcement of arbitral awards arising from international commercial contracts.

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Enforcement of Annulled Arbitral Awards in Cross-Border Commercial Disputes: The Malaysian Perspective

  • Iyllyana Che Rosli,
  • Tengku Chik Abu Bakar Tengku Ibrahim,
  • Norhasliza Ghapa,
  • Asril Amirul Zakariah,
  • Murshamshul Kamariah Musa

摘要

The enforcement of annulled arbitral awards remains a complex and controversial issue in international arbitration, particularly under the New York Convention 1958 (NYC 1958). While the Convention facilitates the recognition and enforcement of arbitral awards, it also allows national courts to refuse enforcement if an award has been set aside at its seat. This discretionary power has led to inconsistent enforcement practices across jurisdictions and heightened the risk of forum shopping, where award-creditors seek enforcement in more favourable forums despite annulment. This paper examines Malaysia’s approach to the enforcement of annulled arbitral awards under the Arbitration Act 2005, which incorporates both the NYC 1958 and the UNCITRAL Model Law. Although no Malaysian case has directly dealt with annulled foreign awards, judicial reasoning in related cases suggests a restrictive position, with courts deferring to annulment decisions made by supervisory courts. Using a doctrinal and comparative legal methodology, the paper analyses Malaysian statutory provisions, case law, and international arbitration principles. It also considers whether Malaysian courts have residual discretion to enforce annulled awards in exceptional cases, particularly where the annulment offends public policy or procedural fairness. This study contributes to the growing body of literature on cross-border dispute resolution by clarifying Malaysia’s legal position, assessing its consistency with global best practices, and offering reform proposals to strengthen legal certainty in the enforcement of arbitral awards arising from international commercial contracts.