i-ARBITRATION
RULES

©2013

KLRCA Islamic Model
Arbitration Clause

"Any dispute, controversy or claim arising
out of or relating to this contract or the
breach, termination or invalidity thereof
shall be settled by arbitration in accordance
with the KLRCA i-Arbitration Rules."

SCHEDULES

KLRCA i-ARBITRATION

RULES (Revised in 2013)

GUIDE TO KLRCA

i-ARBITRATION RULES

UNCITRAL ARBITRATION

RULES (As revised in 2010)

Part I

Part III

Part IV

Part II

This is the KLRCA i-Arbitration Rules as

produced by the Kuala Lumpur Regional

Centre for Arbitration and is in force

as of 24th October 2013.

CONTENTS
i-Arbitration Rules

KLRCA i-ARBITRATION RULES2

Part I
KLRCA i-ARBITRATION RULES
(Revised in 2013)

Rule 1 General 7
Rule 2 Commencement of Arbitration 8
Rule 3 Notification and Pleadings 9
Rule 4 Appointment
Rule 5 Challenge to the Arbitrators 12
Rule 6 Seat of Arbitration  14
Rule 7 Interim Relief
Rule 8 Consolidation of Proceedings and
 Concurrent Hearings
Rule 9 Facilities 15
Rule 10 Arbitration Procedure
Rule 11 Procedure for Reference to Shariah 16
 Advisory Council or Shariah Expert
Rule 12 Awards  18
Rule 13 Costs  20
Rule 14 Deposits  22
Rule 15 Mediation to Arbitration  24
Rule 16 Confidentiality
Rule 17 No Liability 25
Rule 18 Non-reliances

KLRCA i-ARBITRATION RULES3

Part II
UNCITRAL ARBITRATION RULES
(As revised in 2010)

Section I
Introductory Rules

Article 1    Scope of Application 27
Article 2    Notice and Calculation of Periods 28
  of Time
Article 3  Notice of Arbitration 29
Article 4  Response to the Notice of 31
  Arbitration
Article 5  Representation and Assistance 32
Article 6  Designating and Appointing 33
  Authorities

Section II
Composition of the Arbitral Tribunal

Article 7  Number of Arbitrators 35
Article 8 - 10 Appointment of Arbitrators
Article 11 - 13 Disclosures by and Challenge of 38
  Arbitrators
Article 14  Replacement of an Arbitrator 40
Article 15  Repetition of Hearings in the Event
  of the Replacement of an Arbitrator
Article 16  Exclusion of Liability 41

KLRCA i-ARBITRATION RULES4

Section III
Arbitral Proceedings

Article 17 General Provisions 41
Article 18 Place of Arbitration 43
Article 19 Language
Article 20 Statement of Claim 44
Article 21 Statement of Defence 45
Article 22 Amendments to the Claim or Defense 46
Article 23 Pleas as to the Jurisdiction of the
 Arbitral Tribunal
Article 24 Further Written Statements 47
Article 25 Periods of Time
Article 26 Interim Measures 48
Article 27 Evidence 50
Article 28 Hearings 51
Article 29 Experts Appointed by the Arbitral Tribunal
Article 30 Default 53
Article 31 Closure of Hearings 54
Article 32 Waiver of Right to Object

Section IV
The Award

Article 33 Decisions 55
Article 34 Form and Effect of the Award
Article 35 Applicable Law, Amiable Compositeur 56
Article 36 Settlement or Other Grounds for 57
 Termination
Article 37 Interpretation of the Award 58
Article 38 Correction of the Award
Article 39 Additional Award 59
Article 40 Definition of Costs
Article 41 Fees and Expenses of Arbitrators 60
Article 42 Allocation of Costs 63
Article 43 Deposit of Costs

KLRCA i-ARBITRATION RULES5

Part III
SCHEDULES

Schedule 1  Schedule of Fees

International Arbitration
Appendix A1 Arbitrator’s Fees (USD) 66
Appendix B1 Administrative Costs (USD) 67

Domestic Arbitration
Appendix A2 Arbitrator’s Fees (RM) 68
Appendix B2 Administrative Costs (RM)  69

Appendix C  Emergency Interim Relief Costs 70
  and Fees

Appendix D  Notes on Schedule of Fees 71
     1. Registration Fees
  2. Arbitral Tribunal Fees
  3. KLRCA Administrative Costs
  4. Advance Preliminary Deposit

Schedule 2  Emergency Arbitrator 75

Schedule 3  Model Arbitration Clause 80

Schedule 4  Form of Agreement

Part IV
GUIDE TO KLRCA 82
i-ARBITRATION RULES

Part I

KLRCA
i-ARBITRATION
RULES
(Revised in 2013)

KLRCA i-ARBITRATION RULES7

The KLRCA i-Arbitration Rules (hereinafter referred
to as “Rules”) shall be the UNCITRAL Arbitration
Rules as modified in accordance with the rules set out
below. These Rules are Shariah-compliant and may
be cited as the “Kuala Lumpur Regional Centre Rules
for i-Arbitration” or “KLRCA i-Arbitration Rules”.

“Rule” shall refer to Part I of the Rules and “Article”
shall refer to Part II of the Rules.

Rule 1
General

1.  Where parties have agreed in writing to arbitrate
their disputes in accordance with the Rules, then:

 i) a)  Such disputes shall be settled or resolved
by arbitration in accordance with the
Rules; and

  b)  The arbitration shall be conducted and
administered by the Kuala Lumpur
Regional Centre for Arbitration
(hereinafter referred to as “KLRCA”) in
accordance with the Rules.

 ii)  Where the seat of arbitration is Malaysia,
Section 41, Section 42, Section 43 and Section
46 of the Malaysian Arbitration Act 2005
(Amended 2011) shall not apply.

2.  The Rules applicable to the arbitration shall be
those in force at the time of commencement
of the arbitration unless the parties have
agreed otherwise.

KLRCA i-ARBITRATION RULES8

3.  For avoidance of any doubt, in so far as there is
any conflict between Part I and Part II of the
Rules, the provisions in Part I shall prevail.

Rule 2
Commencement of Arbitration

1.  The party or parties initiating recourse to arbitration
under the Rules shall be required to submit a
written request to the Director of the KLRCA
together with a copy of the Notice of Arbitration
served on the Respondent pursuant to Article 3
and shall be accompanied by the following:

 a)  A copy of the written arbitration clause and
the contractual documentations in which the
arbitration clause is contained or in respect of
which the arbitration arises;

 b)  Confirmation to the Director of the KLRCA that
the Notice of Arbitration has been or is being
served on all other parties to the arbitration by
one or more means of service to be identified in
such confirmation; and

 c)  A non-refundable registration fee amounting
to USD500.00 in international arbitration (as
defined in Rule 4(4)(c)) and RM1000.00 in
domestic arbitration.

2.  The date of receipt by the Director of the KLRCA of
the request complete with all the accompanying
documentation and non-refundable registration
fee shall be treated as the date on which the
arbitration has commenced for all purposes.

KLRCA i-ARBITRATION RULES9

Rule 3
Notification and Pleadings

1.  All documents served pursuant to Articles 3, 4, 20,
21, 22, 23 and 24 shall be served on the Director
of the KLRCA at the time of such service on the
other party or immediately thereafter.

Rule 4
Appointment

1.  Where the parties have agreed to the Rules,
the Director of the KLRCA shall be the
appointing authority.

2.    “Arbitral tribunal” means a sole arbitrator or a
panel of arbitrators and includes an emergency
arbitrator appointed pursuant to Schedule 2.

3.  Parties are free to determine the number of
arbitrators.

4.  Where the parties fail to determine the number
of arbitrators, the arbitral tribunal shall:

 a)  In the case of an international arbitration,
consist of 3 arbitrators; and

 b)  In the case of a domestic arbitration, consist
of a sole arbitrator;

c)  “international arbitration” means an
arbitration where –

KLRCA i-ARBITRATION RULES10

  a)  one of the parties to an arbitration
agreement, at the time of the conclusion
of that agreement, has its place of business
in any State other than Malaysia;

  b)  one of the following is situated in any
State other than Malaysia in which the
parties have their places of business:

   i)  the seat of arbitration if determined
in, or pursuant to, the arbitration
agreement;

   ii)  any place where a substantial part of
the obligations of any commercial or
other relationship is to be performed
or the place with which the subject
matter of the dispute is most closely
connected; or

  c)  the parties have expressly agreed that the
subject matter of the arbitration agreement
relates to more than one State.

 d)   “domestic arbitration” means any arbitration
which is not an international arbitration.

5.  Unless the parties have agreed otherwise, the
procedure for the appointment of a sole arbitrator
shall be:

 a)  If the parties have agreed that a sole arbitrator
is to be appointed, the parties are free to
mutually agree on the sole arbitrator.

KLRCA i-ARBITRATION RULES11

 b)  If within 30 days of the other party’s receipt of
the Notice of Arbitration, the parties have not
reached an agreement on the appointment of
the sole arbitrator, either party may request
for the sole arbitrator to be appointed by
the Director of the KLRCA.

6.  Unless the parties have agreed otherwise, the
procedure for the appointment of 3 arbitrators
shall be:

 a)  If the parties have agreed that 3 arbitrators
are to be appointed, each party shall
appoint 1 arbitrator. The 2 arbitrators thus
appointed shall choose the third arbitrator
who will act as the presiding arbitrator of the
arbitral tribunal.

 b)  If within 30 days after the receipt of a party’s
notification of the appointment of an arbitrator
the other party has not notified the first party
of the arbitrator it has appointed, the first
party may request the Director of the KLRCA
to appoint the second arbitrator.

 c)  If within 30 days after the appointment of the
second arbitrator the two arbitrators have not
agreed on the choice of the presiding arbitrator,
the presiding arbitrator shall be appointed by
the Director of the KLRCA.

7.  Where the KLRCA upon the request of a party is
to appoint a sole, presiding, second,  emergency
arbitrator, the Director of the KLRCA shall appoint
such arbitrator in accordance with the Rules and in
doing so may exercise all powers and discretions
specified in the Rules.

KLRCA i-ARBITRATION RULES12

8.  Where the parties have agreed that any arbitrator
is to be appointed by one or more parties, or by any
authority agreed by the parties, including where
the arbitrators have already been appointed, that
agreement shall be treated as an agreement to
nominate an arbitrator under these rules and shall
be subject to appointment by the Director of the
KLRCA in his discretion

9.  Where the Director of the KLRCA is to appoint any
arbitrator, the Director of the KLRCA may at his
discretion seek such information from the parties
as he may think fit.

Rule 5
Challenge to the Arbitrators

1.  An arbitrator may be challenged if circumstances
exists that give rise to justifiable doubts as to
the arbitrator’s impartiality or independence or
if the arbitrator does not possess any requisite
qualification on which the parties agreed.

2.  A party may challenge the arbitrator nominated
by him only for reasons of which he becomes aware
of after the appointment has been made.

3.  The party who intends to challenge an arbitrator
shall send notice of challenge within 15 days after
the receipt of the notice of appointment of the
challenged arbitrator or within 15 days after the
circumstances mentioned in Rule 5(1) or Rule 5(2)
became known to that party.

KLRCA i-ARBITRATION RULES13

4.  The notice of challenge shall be sent
simultaneously to the other party, to the arbitrator
who is challenged, to the other members of the
arbitral tribunal, if any, and copied to the Director
of the KLRCA. The notice shall be in writing and
shall state the reasons for the challenge. The
Director of the KLRCA may order suspension of
arbitration until the challenge is resolved.

5.  When an arbitrator is challenged by one party,
the other party may agree to the challenge. The
challenged arbitrator may also withdraw from his
office. In neither case does this imply acceptance
of the validity of the grounds of the challenge.

6.  If within 14 days of the receipt of the notice of
challenge, the other party does not agree to
the challenge and the arbitrator who is being
challenged does not withdraw voluntarily,
the Director of the KLRCA shall decide on
the challenge.

7.  Upon such withdrawal or sustainment of the
challenge, the substitute arbitrator shall be
appointed in accordance with the procedure
provided in Rule 4.

8.  The Director of the KLRCA may fix the costs of the
challenge and may direct by whom and how such
costs should be borne.

KLRCA i-ARBITRATION RULES14

Rule 6
Seat of Arbitration

1.  The parties may agree on the seat of arbitration.
Failing such agreement, the seat of arbitration
shall be Kuala Lumpur, Malaysia unless the
arbitral tribunal determines, having regard to all
the circumstances of the case, that another seat is
more appropriate.

2.  The arbitral tribunal may meet at any location it
considers appropriate for deliberations. Unless
otherwise agreed by parties, the arbitral tribunal
may also meet at any location it considers
appropriate for any purpose, including hearings.

Rule 7
Interim Relief

1.  The arbitral tribunal may, at the request of a party
grant interim measures pursuant to Article 26.

2.  A party in need of emergency interim relief prior
to the constitution of the arbitral tribunal may
apply for such relief pursuant to the procedures set
forth in Schedule 2.

Rule 8
Consolidation of Proceedings and Concurrent Hearings

1.  The parties may agree –

 a)  That the arbitration proceedings shall
be consolidated with other arbitration
proceedings; or

KLRCA i-ARBITRATION RULES15

 b)  That concurrent hearings shall be held, on
such terms as may be agreed.

2.  Unless the parties agree to confer such power on
the arbitral tribunal, the tribunal has no power to
order consolidation of arbitration proceedings or
concurrent hearings.

Rule 9
Facilities

The Director of the KLRCA shall, at the request of
the arbitral tribunal or either party, make available,
or arrange for, such facilities and assistance for the
conduct of the arbitral proceedings as may be required,
including suitable accommodation for sittings of the
arbitral tribunal, secretarial assistance, transcription
services, video conferencing and interpretation facilities.

Rule 10
Arbitration Procedure

The arbitral tribunal may conduct the arbitration in
such manner as it considers appropriate and without
prejudice to the generality of the foregoing may, unless
all parties to the arbitration otherwise agree, limit the
time available for each party to present its case.

KLRCA i-ARBITRATION RULES16

Rule 11
Procedure for Reference to Shariah Advisory Council
or Shariah Expert

1. Whenever the arbitral tribunal has to:-

 a)  Form an opinion on a point related to Shariah
principles; and

 b)  Decide on a dispute arising from the Shariah
aspect of the contract;

  the arbitral tribunal may refer the matter to the
relevant Council or Shariah expert for its ruling.

2  For the purposes of paragraph 1 above, the relevant
Council or Shariah expert shall be:

 a)  The Shariah council under whose purview the
Shariah aspect to be decided falls, where there
is one; or

 b)  Where the Shariah aspect to be decided
does not fall under the purview of a specific
Shariah council, a Shariah council or expert is
to be agreed between the parties. Where the
parties fail to agree to a Shariah council or
expert, the provisions relating to experts
appointed by the arbitral tribunal under
Article 29 shall apply.

3.  Any reference under paragraph 1 above shall include
any relevant information as the relevant Council
or Shariah expert may require to form its opinion
including the question(s) or issue(s) so referred,
the relevant facts, issues and the questions to be
answered by the relevant Council or Shariah expert.

KLRCA i-ARBITRATION RULES17

4.  If a reference to the relevant Council or Shariah
expert has been made, the arbitrator shall then
adjourn the arbitration proceedings until the ruling
has been given by the relevant Council or Shariah
expert, as the case may be, or if there are any other
areas of dispute which are independent of the said
ruling, shall proceed to deliberate on such areas
which are independent of the said ruling.

5.  The relevant Council or Shariah expert, as the
case may be, shall then deliberate and make its
ruling on the issue or question so submitted.

6.  The relevant Council or Shariah expert shall
deliver its ruling within the period of  60  days from
the date the reference is made.

7.  Where the relevant Council or Shariah expert fails to
deliver its ruling within 60 days, the arbitral tribunal
may proceed to determine the dispute and give its
award based on the submissions it has before it.
The validity of an award given pursuant to this Rule
shall not be affected in any way by the unavailability
of the relevant Council or Shariah expert’s ruling.

8.  For avoidance of doubt, the ruling of the relevant
Council or the Shariah expert may only relate to
the issue or question so submitted by the arbitral
tribunal and the relevant Council or the Shariah
expert shall not have any jurisdiction in making
discovery of facts or in applying the ruling or
formulating any decision relating to any fact of
the matter which is solely for the arbitral tribunal
to determine.

KLRCA i-ARBITRATION RULES18

Rule 12
Awards

1.  The arbitral tribunal shall render its final award
within a period which is limited to 3 months.
Such time limit shall start to run from the date of
the closing or final oral or written submissions.
The arbitral tribunal shall inform the Director
of the KLRCA of such date.

2.  Such time limit may be extended by the arbitral
tribunal with the consent of the parties and upon
consultation with the Director of the KLRCA.

3.  The Director of the KLRCA may further extend the
time limit in the absence of consent between the
parties notwithstanding its expiry.

4.  The arbitral tribunal shall deliver sufficient copies
of the completed award to the Director of the KLRCA.
The award shall only be released to the parties
upon full settlement of the costs of arbitration.

5.  The KLRCA shall notify the parties of its receipt
of the award from the arbitral tribunal. The award
shall be deemed to have been received by the
parties upon collection by hand by an authorised
representative or upon delivery by registered mail.

6.  In the event the parties reach a settlement after
the commencement of the arbitration, the arbitral
tribunal shall, if so requested by the parties, record
the settlement in the form of an award made by
consent of the parties. If the parties do not require a
consent award, the parties shall inform the Director
of the KLRCA that a settlement has been reached.
The arbitration shall only be deemed concluded and

KLRCA i-ARBITRATION RULES19

the arbitral tribunal discharged upon full settlement
of the costs of arbitration.

7.  By agreeing to arbitration under these Rules,
the parties undertake to carry out the award
immediately and without delay, and they also
irrevocably waive their rights to any form of appeal,
review or recourse to any state court or other
judicial authority insofar as such waiver may be
validly made and the parties further agree that an
award shall be final and binding on the parties from
the date it is made.

8.  Unless the parties have agreed otherwise, the
arbitral tribunal may on any sum of money ordered
to be paid by the award on the whole or any part
of the period between the date on which the cause
of action arose and to the date of realisation of
the award:

 a)  Award a late payment charge determined
by applying the principles of ta’widh and
gharamah, where ta’widh refers to
compensation on actual loss and gharamah
refers to penalty for late payment; or

 b)  In any other way that the arbitral tribunal
considers appropriate, including interest.

9.  An “award” as referred to herein shall include an
interim, partial or final award and an award of an
emergency arbitrator.

KLRCA i-ARBITRATION RULES20

Rule 13
Costs

In lieu of the provisions of Article 43, the following
provisions shall apply:

1.  The term “costs” as specified in Article 40 shall
include the:

 a)  Expenses reasonably incurred by the KLRCA

in connection with the arbitration, the
administrative costs of the KLRCA as well
as the cost of the facilities made available
by the KLRCA under Rule 9; and

 b)  Expenses reasonably incurred by the arbitral
tribunal in connection with the reference to
relevant Council or Shariah expert under
Rule 11.

2.  Unless otherwise agreed by the parties and the
arbitral tribunal pursuant to Rule 13(4), the Director
of the KLRCA shall fix the fees of the arbitral
tribunal in accordance with the Schedule of Fees.

3.  As a general rule, Appendix A1 (USD scale) shall
apply to international arbitrations [as defined in
Rule 4(4)(c)] and Appendix A2 (RM scale) shall
apply to domestic arbitrations.

4.  Notwithstanding the above, all the parties and
the arbitral tribunal are at liberty to agree on the
fees and expenses of the arbitral tribunal within
the period of 30 days after the appointment of the
arbitral tribunal and the arbitral tribunal shall
inform the Director of the KLRCA.

KLRCA i-ARBITRATION RULES21

5.  The administrative costs of the arbitration shall be
fixed by the Director of the KLRCA in accordance
with the Schedule of Fees. As a general rule,
Appendix B1 (USD scale) shall apply to international
arbitrations [as defined in Rule 4(4)(c)] and Appendix
B2 (RM scale) shall apply to domestic arbitrations.

6.  The fees of the arbitral tribunal and administrative
costs of the arbitration under Rule 13(3), (4) and (5)
above may, in exceptional, unusual or unforeseen
circumstances, be adjusted from time to time at the
discretion of the Director of the KLRCA.

7.  The fees of the arbitral tribunal and the
administrative costs of arbitration under the
Schedule of Fees are determined based on
the amount in dispute. For the purpose of
calculating the amount in dispute, the value of any
counterclaim and/or set-off will be added to the
amount of the claim.

8.  Where a claim or counterclaim does not state a
monetary amount, an appropriate value for the
claim or counterclaim shall be settled by the
Director of the KLRCA in consultation with the
arbitral tribunal and the parties for the purpose
of computing the arbitrator’s fees and the
administrative costs.

9.  Notwithstanding Rule 14, the arbitral tribunal may
determine the proportion of costs to be borne by
the parties.

KLRCA i-ARBITRATION RULES22

Rule 14
Deposits

In lieu of the provisions of Article 43, the following
provisions shall apply:

1.  Subsequent to the commencement of arbitration in
accordance with Rule 2, the Director of the KLRCA
shall fix a provisional advance deposit in an amount
intended to cover the costs of the arbitration. Any
such provisional advance deposit shall be paid by
the parties in equal shares and will be considered
as a partial payment by the parties of any deposits
on costs fixed by the Director of the KLRCA under
Rule 13.

2.  Such provisional advance deposit shall be payable
within 21 days upon request from the KLRCA. In
the event that any of the parties fail to pay such
deposit, the Director of the KLRCA shall so inform
the parties in order that one or the other may make
the required payment. The arbitral tribunal shall
not proceed with the arbitral proceedings until such
provisional advance deposit is paid in full.

3.  Upon finalisation of the applicable Schedule of Fees
under Rule 13(2), including the fees and expenses of
the arbitral tribunal, if any, pursuant to Rule 13(4),
the Director of the KLRCA shall prepare an estimate
of the fees and expenses of the arbitral tribunal and
the administrative charges and expenses of the
KLRCA which the parties shall bear equally. Within
21 days of written notification by the Director of the
KLRCA of such estimate, each party shall deposit
its share of the estimate with the KLRCA.

KLRCA i-ARBITRATION RULES23

4.  During the course of the arbitral proceedings the
Director of the KLRCA may request further deposits
from the parties which shall be paid by the parties
in equal shares within 21 days of such request.

5.  Notwithstanding Rule 14(4), where counterclaims are
submitted by the respondent, the Director of the KLRCA
may fix separate deposits on costs for the claims
and counterclaims. When the Director of the KLRCA
has fixed separate advance preliminary deposits on
costs, each of the parties shall pay the advance
preliminary deposit corresponding to its claims.

6.  If the required deposits are not paid in full, the
Director of the KLRCA shall so inform the parties in
order that one or the other may make the required
payment. If such payment is not made, the arbitral
tribunal, after consultation with the Director of the
KLRCA, may order the suspension or termination of
the arbitral proceedings or any part thereof.

7.  Notwithstanding the above, the Director of the
KLRCA shall have the discretion to determine
the proportion of deposits required to be paid by
the parties.

8.  The Director of the KLRCA may apply the deposits
towards the administrative costs of the KLRCA, fees
of the arbitrator and the arbitrator’s out-of-pocket
and per diem expenses in such manner and at
such times as the Director thinks fit.

9.  After the award has been made, the Director of
the KLRCA shall render an accounting to the
parties of the deposits received and return any
unexpended balance to the parties based on the
parties respective contributions.

KLRCA i-ARBITRATION RULES24

Rule 15
Mediation to Arbitration

Where the parties have referred their dispute to
mediation under the KLRCA’s Mediation Rules and
they have failed to reach a settlement and thereafter
proceed to arbitration under the Rules, then one-half
of the administrative costs paid to the KLRCA for the
mediation shall be credited towards the administrative
costs of the arbitration.

Rule 16
Confidentiality

The arbitral tribunal, the parties, all experts including
relevant councils and Shariah experts, all witnesses
and the KLRCA shall keep confidential all matters
relating to the arbitral proceedings including any award
except where disclosure is necessary for purposes of
implementation and enforcement or to the extent that
disclosure may be required of a party by legal duty,
to protect or pursue a legal right or to challenge an
award in bona fide legal proceedings before a state
court or other judicial authority.

In this Rule, “matters relating to the proceedings”
means the existence of the proceedings, and the
pleadings, evidence and other materials in the arbitration
proceedings, and all other documents produced by
another party in the proceedings or the award arising
from the proceedings, but excludes any matter that is
otherwise in the public domain.

KLRCA i-ARBITRATION RULES25

Rule 17
No Liability

Neither the KLRCA nor the arbitral tribunal shall be
liable to any party for any act or omission related to
the conduct of the arbitral proceedings.

Rule 18
Non-reliances

The parties and the arbitral tribunal agree that
statements or comments whether written or oral made
in the course of the arbitral proceedings shall not
be relied upon to institute or commence or maintain
any action for defamation, libel, slander or any
other complaint.

Part II

KLRCA UNCITRAL
RULES
(As revised in 2010)

KLRCA i-ARBITRATION RULES27

Section I
INTRODUCTORY RULES

Article 1
Scope of Application*

1.   Where parties have agreed that disputes between
them in respect of a defined legal relationship,
whether contractual or not, shall be referred to
arbitration under the UNCITRAL Arbitration Rules,
then such disputes shall be settled in accordance
with these Rules subject to such modification as
the parties may agree.

2.  The parties to an arbitration agreement concluded
after 15 August 2010 shall be presumed to have
referred to the Rules in effect on the date of
commencement of the arbitration, unless the
parties have agreed to apply a particular version of
the Rules. That presumption does not apply where
the arbitration agreement has been concluded
by accepting after 15 August 2010 an offer made
before that date.

3.  These Rules shall govern the arbitration except
that where any of these Rules is in conflict with a
provision of the law applicable to the arbitration
from which the parties cannot derogate, that
provision shall prevail.

*  A model arbitration clause for contracts can be found in
the annex to the Rules.

KLRCA i-ARBITRATION RULES28

Article 2
Notice and Calculation of Periods of Time

1.  A notice, including a notification, communication
or proposal, may be transmitted by any means of
communication that provides or allows for a record
of its transmission.

2.  If an address has been designated by a party
specifically for this purpose or authorised by the
arbitral tribunal, any notice shall be delivered
to that party at that address, and if so delivered
shall be deemed to have been received. Delivery
by electronic means such as facsimile or email
may only be made to an address so designated
or authorised.

3.   In the absence of such designation or authorization,
a notice is:

 a)  Received if it is physically delivered to the
addressee; or

 b)  Deemed to have been received if it is delivered
at the place of business, habitual residence or
mailing address of the addressee.

4.   If, after reasonable efforts, delivery cannot be
effected in accordance with paragraphs 2 or 3, a
notice is deemed to have been received if it is sent
to the addressee’s last known place of business,
habitual residence or mailing address by registered
letter or any other means that provides a record of
delivery or of attempted delivery.

KLRCA i-ARBITRATION RULES29

5.   A notice shall be deemed to have been received
on the day it is delivered in accordance with
paragraphs 2, 3 or 4, or attempted to be delivered in
accordance with paragraph 4. A notice transmitted
by electronic means is deemed to have been
received on the day it is sent, except that a notice
of arbitration so transmitted is only deemed to
have been received on the day when it reaches the
addressee’s electronic address.

6.  For the purpose of calculating a period of time
under these Rules, such period shall begin to run on
the day following the day when a notice is received.
If the last day of such period is an official holiday
or a non-business day at the residence or place of
business of the addressee, the period is extended
until the first business day which follows. Official
holidays or non business days occurring during
the running of the period of time are included in
calculating the period.

Article 3
Notice of Arbitration

1.   The party or parties initiating recourse to
arbitration (hereinafter called the “claimant”)
shall communicate to the other party or parties
(hereinafter called the “respondent”) a notice
of arbitration.

2.   Arbitral proceedings shall be deemed to commence
on the date on which the notice of arbitration is
received by the respondent.

KLRCA i-ARBITRATION RULES30

3.  The notice of arbitration shall include the following:

a)  A demand that the dispute be referred
to arbitration;

b) The names and contact details of the parties;

c)  Identification of the arbitration agreement
that is invoked;

d)  Identification of any contract or other legal
instrument out of or in relation to which the
dispute arises or, in the absence of such
contract or instrument, a brief description
of the relevant relationship;

e)  A brief description of the claim and an indication
of the amount involved, if any;

f) The relief or remedy sought;

g)  A proposal as to the number of arbitrators,
language and place of arbitration, if the parties
have not previously agreed thereon.

4.  The notice of arbitration may also include:

a)  A proposal for the designation of an appointing
authority referred to in article 6, paragraph 1;

b)  A proposal for the appointment of a sole
arbitrator referred to in article 8, paragraph 1;

c)  Notification of the appointment of an arbitrator
referred to in articles 9 or 10.

KLRCA i-ARBITRATION RULES31

5.   The constitution of the arbitral tribunal shall not
be hindered by any controversy with respect to
the sufficiency of the notice of arbitration, which
shall be finally resolved by the arbitral tribunal.

Article 4
Response to the Notice of Arbitration

1.  Within 30 days of the receipt of the notice of
arbitration, the respondent shall communicate to
the claimant a response to the notice of arbitration,
which shall include:

a)  The name and contact details of each
respondent;

b)  A response to the information set forth in the
notice of arbitration, pursuant to article 3,
paragraphs 3 (c) to (g).

2.  The response to the notice of arbitration may
also include:

a)  Any plea that an arbitral tribunal to be
constituted under these Rules lacks jurisdiction;

b)  A proposal for the designation of an appointing
authority referred to in article 6, paragraph 1;

c)  A proposal for the appointment of a sole
arbitrator referred to in article 8, paragraph 1;

d)  Notification of the appointment of an arbitrator
referred to articles 9 or 10;

KLRCA i-ARBITRATION RULES32

e)  A brief description of counterclaims or claims
for the purpose of a set-off, if any, including
where relevant, an indication of the amounts
involved, and the relief or remedy sought;

f)  A notice of arbitration in accordance with
article 3 in case the respondent formulates a
claim against against a party to the arbitration
agreement other than the claimant.

3.  The constitution of the arbitral tribunal shall not
be hindered by any controversy with respect to the
respondent’s failure to communicate a response to
the notice of arbitration, or an incomplete or late
response to the notice of arbitration, which shall
be finally resolved by the arbitral tribunal.

Article 5
Representation and Assistance

Each party may be represented or assisted by persons
chosen by it. The names and addresses of such
persons must be communicated to all parties and to
the arbitral tribunal. Such communication must specify
whether the appointment is being made for purposes
of representation or assistance. Where a person is to
act as a representative of a party, the arbitral tribunal,
on its own initiative or at the request of any party, may
at any time require proof of authority granted to the
representative in such a form as the arbitral tribunal
may determine.

KLRCA i-ARBITRATION RULES33

Article 6
Designating and Appointing Authorities

1.  Unless the parties have already agreed on the
choice of an appointing authority, a party may at any
time propose the name or names of one or more
institutions or persons, including the Secretary-
General of the Permanent Court of Arbitration at
The Hague (hereinafter called the “PCA”), one of
whom would serve as appointing authority.

2.  If all parties have not agreed on the choice of an
appointing authority within 30 days after a proposal
made in accordance with paragraph 1 has been
received by all other parties, any party may request
the Secretary-General of the PCA to designate the
appointing authority.

3.  Where these Rules provide for a period of time
within which a party must refer a matter to an
appointing authority and no appointing authority
has been agreed on or designated, the period is
suspended from the date on which a party initiates
the procedure for agreeing on or designating
an appointing authority until the date of such
agreement or designation.

4.  Except as referred to in article 41, paragraph 4,
if the appointing authority refuses to act, or if it
fails to appoint an arbitrator within 30 days after
it receives a party’s request to do so, fails to act
within any other period provided by these Rules,
or fails to decide on a challenge to an arbitrator
within a reasonable time after receiving a party’s
request to do so, any party may request the
Secretary-General of the PCA to designate a
substitute appointing authority.

KLRCA i-ARBITRATION RULES34

5.  In exercising their functions under these Rules,
the appointing authority and the Secretary-
General of the PCA may require from any party
and the arbitrators the information they deem
necessary and they shall give the parties and,
where appropriate, the arbitrators, an opportunity
to present their views in any manner they consider
appropriate. All such communications to and from
the appointing authority and the Secretary-General
of the PCA shall also be provided by the sender to
all other parties.

6.  When the appointing authority is requested to
appoint an arbitrator pursuant to articles 8, 9, 10
or 14, the party making the request shall send to
the appointing authority copies of the notice of
arbitration and, if it exists, any response to the
notice of arbitration.

7.  The appointing authority shall have regard to
such considerations as are likely to secure the
appointment of an independent and impartial
arbitrator and shall take into account the advisability
of appointing an arbitrator of a nationality other
than the nationalities of the parties.

KLRCA i-ARBITRATION RULES35

Section II
COMPOSITION OF THE ARBITRAL
TRIBUNAL

Article 7
Number of Arbitrators

1.  If the parties have not previously agreed on the
number of arbitrators, and if within 30 days after the
receipt by the respondent of the notice of arbitration
the parties have not agreed that there shall be only
one arbitrator, three arbitrators shall be appointed.

2.  Notwithstanding paragraph 1, if no other parties
have responded to a party’s proposal to appoint a
sole arbitrator within the time limit provided for in
paragraph 1 and the party or parties concerned have
failed to appoint a second arbitrator in accordance
with articles 9 or 10, the appointing authority may,
at the request of a party, appoint a sole arbitrator
pursuant to the procedure provided for in article
8, paragraph 2 if it determines that, in view of the
circumstances of the case, this is more appropriate.

Appointment of Arbitrators
(Articles 8 to 10)

Article 8

1.  If the parties have agreed that a sole arbitrator is
to be appointed and if within 30 days after receipt
by all other parties of a proposal for the
appointment of a sole arbitrator the parties have
not reached agreement thereon, a sole arbitrator

KLRCA i-ARBITRATION RULES36

shall, at the request of a party, be appointed by
the appointing authority.

2.  The appointing authority shall appoint the sole
arbitrator as promptly as possible. In making the
appointment, the appointing authority shall use the
following list-procedure, unless the parties agree
that the list-procedure should not be used or unless
the appointing authority determines in its discretion
that the use of the list-procedure is not appropriate
for the case:

a)  The appointing authority shall communicate
to each of the parties an identical list containing
at least three names;

b)  Within 15 days after the receipt of this
list, each party may return the list to the
appointing authority after having deleted
the name or names to which it objects and
numbered the remaining names on the list in
the order of its preference;

 c)  After the expiration of the above period of time
the appointing authority shall appoint the sole
arbitrator from among the names approved on
the lists returned to it and in accordance with
the order of preference indicated by the parties;

 d)  If for any reason the appointment cannot
be made according to this procedure, the
appointing authority may exercise its discretion
in appointing the sole arbitrator.

KLRCA i-ARBITRATION RULES37

Article 9

1.   If three arbitrators are to be appointed, each party
shall appoint one arbitrator. The two arbitrators
thus appointed shall choose the third arbitrator
who will act as the presiding arbitrator of the
arbitral tribunal.

2.   If within 30 days after the receipt of a party’s
notification of the appointment of an arbitrator
the other party has not notified the first party of
the arbitrator it has appointed, the first party may
request the appointing authority to appoint the
second arbitrator.

3.  If within 30 days after the appointment of the
second arbitrator the two arbitrators have not
agreed on the choice of the presiding arbitrator,
the presiding arbitrator shall be appointed by
the appointing authority in the same way as a
sole arbitrator would be appointed under article 8.

Article 10

1.  For the purposes of article 9, paragraph 1, where
three arbitrators are to be appointed and there
are multiple parties as claimant or as respondent,
unless the parties have agreed to another method
of appointment of arbitrators, the multiple parties
jointly, whether as claimant or as respondent, shall
appoint an arbitrator.

2.  If the parties have agreed that the arbitral
tribunal is to be composed of a number of arbitrators
other than one or three, the arbitrators shall be
appointed according to the method agreed upon by
the parties.

KLRCA i-ARBITRATION RULES38

3.  In the event of any failure to constitute the arbitral
tribunal under these Rules, the appointing
authority shall, at the request of any party,
constitute the arbitral tribunal and, in doing so,
may revoke any appointment already made and
appoint or reappoint each of the arbitrators and
designate one of them  as the presiding arbitrator.

Disclosures by and Challenge of Arbitrators
(Articles 11 to 13)

Article 11

When a person is approached in connection with his or
her possible appointment as an arbitrator, he or she
shall disclose any circumstances likely to give rise to
justifiable doubts as to his or her impartiality or
independence. An arbitrator, from the time of his or
her appointment and throughout the arbitral
proceedings, shall without delay disclose any such
circumstances to the parties and the other arbitrators
unless they have already beeninformed by him or her
of these circumstances.

Article 12

1.  Any arbitrator may be challenged if circumstances
exist that give rise to justifiable doubts as to the
arbitrator’s impartiality or independence.

2.  A party may challenge the arbitrator appointed by
it only for reasons of which it becomes aware after
the appointment has been made.

KLRCA i-ARBITRATION RULES39

3.  In the event that an arbitrator fails to act or in the
event of the de jure or de facto impossibility of his or
her performing his or her functions, the procedure
in respect of the challenge of an arbitrator as
provided in article 13 shall apply.

Article 13

1.  A party that intends to challenge an arbitrator
shall send notice of its challenge within 15 days
after it has been notified of the appointment of the
challenged arbitrator, or within 15 days after the
circumstances mentioned in articles 11 and 12
became known to that party.

2.  The notice of challenge shall be communicated
to all other parties, to the arbitrator who is
challenged and to the other arbitrators. The
notice of challenge shall state the reasons for
the challenge.

3.  When an arbitrator has been challenged by a
party, all parties may agree to the challenge.
The arbitrator may also, after the challenge,
withdraw from his or her office. In neither case
does this imply acceptance of the validity of the
grounds for the challenge.

4.  If, within 15 days from the date of the notice
of challenge, all parties do not agree to the
challenge or the challenged arbitrator does not
withdraw, the party making the challenge may
elect to pursue it. In that case, within 30 days
from the date of the notice of challenge, it
shall seek a decision on the challenge by the
appointing authority.

KLRCA i-ARBITRATION RULES40

Article 14
Replacement of an Arbitrator

1.  Subject to paragraph (2), in any event where an
arbitrator has to be replaced during the course of the
arbitral proceedings, a substitute arbitrator shall
be appointed or chosen pursuant to the procedure
provided for in articles 8 to 11 that was applicable
to the appointment or choice of the arbitrator
being replaced. This procedure shall apply even if
during the process of appointing the arbitrator to be
replaced, a party had failed to exercise its right to
appoint or to participate in the appointment.

2.  If, at the request of a party, the appointing authority
determines that, in view of the exceptional
circumstances of the case, it would be justified
for a party to be deprived of its right to appoint a
substitute arbitrator, the appointing authority
may, after giving an opportunity to the parties and
the remaining arbitrators to express their views:
(a) appoint the substitute arbitrator; or (b) after
the closure of the hearings, authorise the other
arbitrators to proceed with the arbitration and make
any decision or award.

Article 15
Repetition of Hearings in the Event of ihe
Replacement of An Arbitrator

If an arbitrator is replaced, the proceedings shall
resume at the stage where the arbitrator who was
replaced ceased to perform his or her functions,
unless the arbitral tribunal decides otherwise.

KLRCA i-ARBITRATION RULES41

Article 16
Exclusion of Liability

Save for intentional wrongdoing, the parties waive, to the
fullest extent permitted under the applicable law, any
claim against the arbitrators, the appointing authority
and any person appointed by the arbitral tribunal
based on any act or omission in connection with
the arbitration.

Section III
ARBITRAL PROCEEDINGS

Article 17
General Provisions

1.   Subject to these Rules, the arbitral tribunal may
conduct the arbitration in such manner as it
considers appropriate, provided that the parties
are treated with equality and that at an appropriate
stage of the proceedings each party is given a
reasonable opportunity of presenting its case. The
arbitral tribunal, in exercising its discretion, shall
conduct the proceedings so as to avoid unnecessary
delay and expense and to provide a fair and efficient
process for resolving the parties’ dispute.

2.  As soon as practicable after its constitution and
after inviting the parties to express their views,
the arbitral tribunal shall establish the provisional
timetable of the arbitration. The arbitral tribunal
may, at any time, after inviting the parties to
express their views, extend or abridge any period
of time prescribed under these Rules or agreed by
the parties.

KLRCA i-ARBITRATION RULES42

3.  If at an appropriate stage of the proceedings
any party so requests, the arbitral tribunal shall
hold hearings for the presentation of evidence
by witnesses, including expert witnesses, or for
oral argument. In the absence of such a request,
the arbitral tribunal shall decide whether to
hold such hearings or whether the proceedings
shall be conducted on the basis of documents and
other materials.

4.  All communications to the arbitral tribunal by
one party shall be communicated by that party to
all other parties. Such communications shall be
made at the same time, except as otherwise
permitted by the arbitral tribunal if it may do so
under applicable law.

5.  The arbitral tribunal may, at the request of any
party, allow one or more third persons to be joined
in the arbitration as a party provided such person
is a party to the arbitration agreement, unless
the arbitral tribunal finds, after giving all parties,
including the person or persons to be joined, the
opportunity to be heard, that joinder should not
be permitted because of prejudice to any of those
parties. The arbitral tribunal may make a single
award or several awards in respect of all parties so
involved in the arbitration.

KLRCA i-ARBITRATION RULES43

Article 18
Place of Arbitration

1.  If the parties have not previously agreed on the
place of arbitration, the place of arbitration shall be
determined by the arbitral tribunal having regard to
the circumstances of the case. The award shall be
deemed to have been made at the place of arbitration.

2.  The arbitral tribunal may meet at any location
it considers appropriate for deliberations.
Unless otherwise agreed by the parties, the
arbitral tribunal may also meet at any location
it considers appropriate for any other purpose,
including hearings.

Article 19
Language

1.  Subject to an agreement by the parties, the arbitral
tribunal shall, promptly after its appointment,
determine the language or languages to be used in
the proceedings. This determination shall apply to
the statement of claim, the statement of defence,
and any further written statements and, if oral
hearings take place, to the language or languages
to be used in such hearings.

2.  The arbitral tribunal may order that any documents
annexed to the statement of claim or statement
of defence, and any supplementary documents or
exhibits submitted in the course of the proceedings,
delivered in their original language, shall be
accompanied by a translation into the language or
languages agreed upon by the parties or determined
by the arbitral tribunal.

KLRCA i-ARBITRATION RULES44

Article 20
Statement of Claim

1.  The claimant shall communicate its statement of
claim in writing to the respondent and to each of the
arbitrators within a period of time to be determined
by the arbitral tribunal. The claimant may elect to
treat its notice of arbitration referred to in article
3 as a statement of claim, provided that the notice
of arbitration also complies with the requirements
of paragraphs 2 to 4 of this article.

2.  The statement of claim shall include the
following particulars:

a) The names and contact details of the parties;

b) A statement of the facts supporting the claim;

c) The points at issue;

d) The relief or remedy sought;

e)  The legal grounds or arguments supporting
the claim.

3.  A copy of any contract or other legal instrument out
of or in relation to which the dispute arises and of
the arbitration agreement shall be annexed to the
statement of claim.

4.  The statement of claim should, as far as possible, be
accompanied by all documents and other evidence
relied upon by the claimant, or contain references
to them.

KLRCA i-ARBITRATION RULES45

Article 21
Statement of Defence

1.  The respondent shall communicate its statement of
defence in writing to the claimant and to each of the
arbitrators within a period of time to be determined
by the arbitral tribunal. The respondent may elect to
treat its response to the notice of arbitration referred
to in article 4 as a statement of defence, provided
that the response to the notice of arbitration also
complies with the requirements of paragraph 2 of
this article.

2.  The statement of defence shall reply to the
particulars (b) to (e) of the statement of claim
(article 20, paragraph 2). The statement of defence
should, as far as possible, be accompanied by all
documents and other evidence relied upon by the
respondent, or contain references to them.

3.  In its statement of defence, or at a later stage in
the arbitral proceedings if the arbitral tribunal
decides that the delay was justified under the
circumstances, the respondent may make a
counterclaim or rely on a claim for the purpose
of a set-off provided that the arbitral tribunal has
jurisdiction over it.

4.  The provisions of article 20, paragraphs 2 to 4
shall apply to a counterclaim, a claim under article
4, paragraph (2) (f) and a claim relied on for the
purpose of a set-off.

KLRCA i-ARBITRATION RULES46

Article 22
Amendments to the Claim or Defence

During the course of the arbitral proceedings, a party
may amend or supplement its claim or defence, including
a counterclaim or a claim for the purpose of a set-off,
unless the arbitral tribunal considers it inappropriate
to allow such amendment or supplement having regard
to the delay in making it or prejudice to other parties
or any other circumstances.  However, a claim or
defence, including a counterclaim or a claim for
the purpose of a set-off, may not be amended or
supplemented in such a manner that the amended
or supplemented claim or defence falls outside the
jurisdiction of the arbitral tribunal.

Article 23
Pleas as to the Jurisdiction of the Arbitral Tribunal

1.  The arbitral tribunal shall have the power to rule
on its own jurisdiction, including any objections with
respect to the existence or validity of the arbitration
agreement. For that purpose, an arbitration clause
that forms part of a contract shall be treated as an
agreement independent of the other terms of the
contract. A decision by the arbitral tribunal that
the contract is null shall not entail automatically
the invalidity of the arbitration clause.

2.  A plea that the arbitral tribunal does not have
jurisdiction shall be raised no later than in
the statement of defence or, with respect to a
counterclaim or a claim for the purpose of a set-off,
in the reply to the counterclaim or to the claim for the
purpose of a set-off. A party is not precluded from
raising such a plea by the fact that it has appointed,

KLRCA i-ARBITRATION RULES47

or participated in the appointment of, an arbitrator.
A plea that the arbitral tribunal is exceeding the
scope of its authority shall be raised as soon as
the matter alleged to be beyond the scope of its
authority is raised during the arbitral proceedings.
The arbitral tribunal may, in either case, admit a
later plea if it considers the delay justified.

3.  The arbitral tribunal may rule on a plea referred
to in paragraph 2 either as a preliminary question
or in an award on the merits. The arbitral tribunal
may continue the arbitral proceedings and make
an award, notwithstanding any pending challenge
to its jurisdiction before a court.

Article 24
Further Written Statements

The arbitral tribunal shall decide which further
written statements, in addition to the statement of
claim and the statement of defence, shall be required
from the parties or may be presented by them
and shall fix the periods of time for communicating
such statements.

Article 25
Periods of Time

The periods of time fixed by the arbitral tribunal for the
communication of written statements (including the
statement of claim and statement of defence) should
not exceed 45 days. However, the arbitral tribunal
may extend the time limits if it concludes that an
extension is justified.

KLRCA i-ARBITRATION RULES48

Article 26
Interim Measures

1.  The arbitral tribunal may, at the request of a party,
grant interim measures.

2.  An interim measure is any temporary measure
by which, at any time prior to the issuance of the
award by which the dispute is finally decided, the
arbitral tribunal orders a party, for example and
without limitation, to:

 a)  Maintain or restore the status quo pending
determination of the dispute;

 b)  Take action that would prevent, or refrain from
taking action that is likely to cause,

  i) current or imminent harm or

  ii) prejudice to the arbitral process itself;

 c)  Provide a means of preserving assets out of
which a subsequent award may be satisfied; or

 d)  Preserve evidence that may be relevant and
material to the resolution of the dispute.

3.  The party requesting an interim measure under
paragraphs 2 (a) to (c) shall satisfy the arbitral
tribunal that:

 a)  Harm not adequately reparable by an award
of damages is likely to result if the measure
is not ordered, and such harm substantially
outweighs the harm that is likely to result to the
party against whom the measure is directed if

KLRCA i-ARBITRATION RULES49

the measure is granted; and

 b)  There is a reasonable possibility that the

requesting party will succeed on the merits
of the claim. The determination on this
possibility shall not affect the discretion of
the arbitral tribunal in making any
subsequent determination.

4.  With regard to a request for an interim measure
under paragraph 2 (d), the requirements in
paragraphs 3 (a) and (b) shall apply only to the
extent the arbitral tribunal considers appropriate.

5.  The arbitral tribunal may modify, suspend or
terminate an interim measure it has granted,
upon application of any party or, in exceptional
circumstances and upon prior notice to the parties,
on the arbitral tribunal’s own initiative.

6.  The arbitral tribunal may require the party
requesting an interim measure to provide
appropriate security in connection with
the measure.

7.  The arbitral tribunal may require any party
promptly to disclose any material change in the
circumstances on the basis of which the interim
measure was requested or granted.

8.  The party requesting an interim measure may
be liable for any costs and damages caused by
the measure to any party if the arbitral tribunal
later determines that, in the circumstances then
prevailing, the measure should not have been
granted. The arbitral tribunal may award such costs
and damages at any point during the proceedings.

KLRCA i-ARBITRATION RULES50

9.  A request for interim measures addressed by any
party to a judicial authority shall not be deemed
incompatible with the agreement to arbitrate, or as
a waiver of that agreement.

Article 27
Evidence

1.  Each party shall have the burden of proving the
facts relied on to support its claim or defence.

2.  Witnesses, including expert witnesses, who are
presented by the parties to testify to the arbitral
tribunal on any issue of fact or expertise may be
any individual, notwithstanding that the individual
is a party to the arbitration or in any way related to
a party. Unless otherwise directed by the arbitral
tribunal, statements by witnesses, including expert
witnesses, may be presented in writing and signed
by them.

3.  At any time during the arbitral proceedings the
arbitral tribunal may require the parties to produce
documents exhibits or other evidence within such
a period of time as the arbitral tribunal shall
determine.

4.  The arbitral tribunal shall determine the
admissibility, relevance, materiality and weight of
the evidence offered.

KLRCA i-ARBITRATION RULES51

Article 28
Hearings

1.  In the event of an oral hearing, the arbitral tribunal
shall give the parties adequate advance notice of
the date, time and place thereof.

2.  Witnesses, including expert witnesses, may be
heard under the conditions and examined in the
manner set by the arbitral tribunal.

3.  Hearings shall be held in camera unless the
parties agree otherwise. The arbitral tribunal may
require the retirement of any witness or witnesses,
including expert witnesses, during the testimony
of such other witnesses, except that a witness,
including an expert witness, who is a party to the
arbitration shall not, in principle, be asked to retire.

4.  The arbitral tribunal may direct that witnesses,
including expert witnesses, be examined through
means of telecommunication that do not require
their physical presence at the hearing (such as
video conference).

Article 29
Experts Appointed by the Arbitral Tribunal

1.  After consultation with the parties, the arbitral
tribunal may appoint one or more independent
experts to report to it, in writing, on specific issues
to be determined by the arbitral tribunal. A copy
of the expert’s terms of reference, established
by the arbitral tribunal, shall be communicated to
the parties.

KLRCA i-ARBITRATION RULES52

2.  The expert shall, in principle before accepting
appointment, submit to the arbitral tribunal and to
the parties a description of his or her qualifications
and a statement of his or her impartiality and
independence. Within the time ordered by the
arbitral tribunal, the parties shall inform the
arbitral tribunal whether they have any objections
as to the expert’s qualifications, impartiality or
independence. The arbitral tribunal shall decide
promptly whether to accept any such objections.
After an expert’s appointment, a party may object
to the expert’s qualifications, impartiality or
independence only if the objection is for reasons
of which the party becomes aware after the
appointment has been made. The arbitral tribunal
shall decide promptly what, if any, action to take.

3.  The parties shall give the expert any relevant
information or produce for his or her inspection
any relevant documents or goods that he or she
may require of them. Any dispute between a party
and such expert as to the relevance of the required
information or production shall be referred to the
arbitral tribunal for decision.

4.  Upon receipt of the expert’s report, the arbitral
tribunal shall communicate a copy of the report to
the parties, which shall be given the opportunity to
express, in writing, their opinion on the report. A
party shall be entitled to examine any document on
which the expert has relied in his or her report.

5.  At the request of any party, the expert, after delivery
of the report, may be heard at a hearing where the
parties shall have the opportunity to be present and
to interrogate the expert. At this hearing, any party
may present expert witnesses in order to testify on

KLRCA i-ARBITRATION RULES53

the points at issue. The provisions of article 28 shall
be applicable to such proceedings.

Article  30
Default

1.  If, within the period of time fixed by these
Rules or the arbitral tribunal, without showing
sufficient cause:

a)  The claimant has failed to communicate
its statement of claim, the arbitral tribunal
shall issue an order for the  termination of
the arbitral proceedings, unless there are
remaining matters that may need to be
decided and the arbitral tribunal considers it
appropriate to do so;

b)  The respondent has failed to communicate
its response to the notice of arbitration or its
statement of defence, the arbitral tribunal
shall order that the proceedings continue,
without treating such failure in itself as an
admission of the claimant’s allegations; the
provisions of this subparagraph also apply
to a claimant’s failure to submit a defence to
a counterclaim or to a claim for the purpose
of a set-off.

2.  If a party, duly notified under these Rules, fails to
appear at a hearing, without showing sufficient
cause for such failure, the arbitral tribunal may
proceed with the arbitration.

3.  If a party, duly invited by the arbitral tribunal to
produce documents, exhibits or other evidence,

KLRCA i-ARBITRATION RULES54

fails to do so within the established period of time,
without showing sufficient cause for such failure,
the arbitral tribunal may make the award on the
evidence before it.

Article  31
Closure of Hearings

1.  The arbitral tribunal may inquire of the parties if
they have any further proof to offer or witnesses
to be heard or submissions to make and, if there
are none, it may declare the hearings closed.

2.  The arbitral tribunal may, if it considers it necessary
owing to exceptional circumstances, decide, on
its own initiative or upon application of a party, to
reopen the hearings at any time before the award
is made.

Article 32
Waiver of Right to Object

A failure by any party to object promptly to any non-
compliance with these Rules or with any requirement
of the arbitration agreement shall be deemed to be
a waiver of the right of such party to make such an
objection, unless such party can show that, under the
circumstances, its failure to object was justified.

KLRCA i-ARBITRATION RULES55

Section IV
THE AWARD

Article 33
Decisions

1.  When there is more than one arbitrator, any award
or other decision of the arbitral tribunal shall be
made by a majority of the arbitrators.

2.  In the case of questions of procedure, when there is no
majority or when the arbitral tribunal so authorises,
the presiding arbitrator may  decide alone, subject
to revision, if any, by the arbitral tribunal.

Article 34
Form and Effect of the Award

1.  The arbitral tribunal may make separate awards on
different issues at different times.

2.  All awards shall be made in writing and shall be
final and binding on the parties. The parties shall
carry out all awards without delay.

3.  The arbitral tribunal shall state the reasons upon
which the award is based, unless the parties have
agreed that no reasons are to be given.

4.  An award shall be signed by the arbitrators and it
shall contain the date on which the award was made
and indicate the place of arbitration. Where there
is more than one arbitrator and any of them fails
to sign, the award shall state the reason for the
absence of the signature.

KLRCA i-ARBITRATION RULES56

5.  An award may be made public with the consent of
all parties or where and to the extent disclosure is
required of a party by legal duty, to protect or pursue
a legal right or in relation to legal proceedings
before a court or other competent authority.

6.  Copies of the award signed by the arbitrators
shall be communicated to the parties by the
arbitral tribunal.

Article 35
Applicable Law, Amiable Compositeur

1.  The arbitral tribunal shall apply the rules of law
designated by the parties as applicable to the
substance of the dispute. Failing such designation
by the parties, the arbitral tribunal shall apply
the law which it determines to be appropriate.

2.  The arbitral tribunal shall decide as amiable
compositeur or ex aequo et bono  only if the
parties have expressly authorised the arbitral
tribunal to do so.

3.  In all cases, the arbitral tribunal shall decide in
accordance with the terms of the contract, if any,
and shall take into account any usage of trade
applicable to the transaction.

KLRCA i-ARBITRATION RULES57

Article 36
Settlement or Other Grounds for Termination

1.  If, before the award is made, the parties agree on
a settlement of the dispute, the arbitral tribunal
shall either issue an order for the termination of
the arbitral proceedings or, if requested by the
parties and accepted by the arbitral tribunal, record
the settlement in the form of an arbitral award on
agreed terms. The arbitral tribunal is not obliged to
give reasons for such an award.

2.  If, before the award is made, the continuation of
the arbitral proceedings becomes unnecessary
or impossible for any reason not mentioned in
paragraph 1, the arbitral tribunal shall inform
the parties of its intention to issue an order for
the termination of the proceedings. The arbitral
tribunal shall have the power to issue such an order
unless there are remaining matters that may need
to be decided and the arbitral tribunal considers it
appropriate to do so.

3.  Copies of the order for termination of the
arbitral proceedings or of the arbitral award on
agreed terms, signed by the arbitrators, shall
be communicated by the arbitral tribunal to the
parties. Where an arbitral award on agreed terms
is made, the provisions of article 34, paragraphs 2,
4 and 5 shall apply.

KLRCA i-ARBITRATION RULES58

Article 37
Interpretation of the Award

1.   Within 30 days after the receipt of the award, a
party, with notice to the other parties, may request
that the arbitral tribunal give an interpretation of
the award.

2.  The interpretation shall be given in writing
within 45 days after the receipt of the request.
The interpretation shall form part of the award
and the provisions of article 34, paragraphs 2 to 6,
shall apply.

Article 38
Correction of the Award

1.  Within 30 days after the receipt of the award, a
party, with notice to the other parties, may request
the arbitral tribunal to correct in the award any
error in computation, any clerical or typographical
error, or any error or omission of a similar nature.
If the arbitral tribunal considers that the request is
justified, it shall make the correction within 45 days
of receipt of the request.

2.  The arbitral tribunal may within 30 days after the
communication of the award make such corrections
on its own initiative.

3.  Such corrections shall be in writing and shall form
part of the award. The provisions of article 34,
paragraphs 2 to 6, shall apply.

KLRCA i-ARBITRATION RULES59

Article 39
Additional Award

1.  Within 30 days after the receipt of the termination
order or the award, a party, with notice to the
other parties, may request the arbitral tribunal to
make an award or an additional award as to claims
presented in the arbitral proceedings but not
decided by the arbitral tribunal.

2.  If the arbitral tribunal considers the request for an
award or additional award to be justified, it shall
render or complete its award within 60 days after
the receipt of the request. The arbitral tribunal may
extend, if necessary, the period of time within which
it shall make the award.

3.  When such an award or additional award is made,
the provisions of article 34, paragraph 2 to 6,
shall apply.

Article 40
Definition of Costs

1.  The arbitral tribunal shall fix the costs of arbitration
in the final award and, if it deems appropriate, in
another decision.

2.  The term “costs” includes only:

a)  The fees of the arbitral tribunal to be stated
separately as to each arbitrator and to be
fixed by the tribunal itself in accordance with
article 41;

KLRCA i-ARBITRATION RULES60

b)  The reasonable travel and other expenses
incurred by the arbitrators;

c)  The reasonable costs of expert advice
and of other assistance required by the
arbitral tribunal;

d)  The reasonable travel and other expenses of
witnesses to the extent such expenses are
approved by the arbitral tribunal;

e)  The legal and other costs incurred by the
parties in relation to the arbitration to the
extent that the arbitral tribunal determines
that the amount of such costs is reasonable;

f)  Any fees and expenses of the appointing
authority as well as the fees and expenses of
the Secretary-General of the PCA.

3.  In relation to interpretation, correction or
completion of any award under articles 37 to 39,
the arbitral tribunal may charge the costs referred
to in paragraphs 2 (b) to (f), but no additional fees.

Article 41
Fees and Expenses of Arbitrators

1.  The fees and expenses of the arbitrators shall be
reasonable in amount, taking into account the
amount in dispute, the complexity of the subject
matter, the time spent by the arbitrators and any
other relevant circumstances of the case.

KLRCA i-ARBITRATION RULES61

2.  If there is an appointing authority and it applies or
has stated that it will apply a schedule or particular
method for determining the fees for arbitrators in
international cases, the arbitral tribunal in fixing
its fees shall take that schedule or method into
account to the extent that it considers appropriate
in the circumstances of the case.

3.  Promptly after its constitution, the arbitral tribunal
shall inform the parties as to how it proposes to
determine its fees and expenses, including any
rates it intends to apply. Within 15 days of receiving
that proposal, any party may refer the proposal to
the appointing authority for review. If, within 45
days of receipt of such a referral, the appointing
authority finds that the proposal of the arbitral
tribunal is inconsistent with paragraph 1, it shall
make any necessary adjustments thereto, which
shall be binding upon the arbitral tribunal.

4.  a)  When informing the parties of the arbitrators’
fees and expenses that have been fixed
pursuant to article 40, paragraphs 2 (a) and
(b), the arbitral tribunal shall also explain the
manner in which the corresponding amounts
have been calculated.

 b)  Within 15 days of receiving the arbitral tribunal’s
determination of fees and expenses, any party
may refer for review such determination to the
appointing authority. If no appointing authority
has been agreed upon or designated, or if the
appointing authority fails to act within the time
specified in these Rules, then the review shall
be made by the Secretary-General of the PCA.

KLRCA i-ARBITRATION RULES62

c)  If the appointing authority or the Secretary-
General of the PCA finds that the arbitral
tribunal’s determination is inconsistent with
the arbitral tribunal’s proposal (and any
adjustment thereto) under paragraph 3 or is
otherwise manifestly excessive, it shall, within
45 days of receiving such a referral, make any
adjustments to the arbitral tribunal’s
determination that are necessary to satisfy the
criteria in paragraph 1. Any such adjustments
shall be binding upon the arbitral tribunal.

d)  Any such adjustments shall either be included by
the arbitral tribunal in its award or, if the award
has already been issued, be implemented in a
correction to the award, to which the procedure
of article 38, paragraph  3 shall apply.

5.  Throughout the procedure under paragraphs
3 and 4, the arbitral tribunal shall proceed with
the arbitration, in accordance with article 17,
paragraph 1.

6.  A referral under paragraph 4 shall not affect any
determination in the award other than the arbitral
tribunal’s fees and expenses; nor shall it delay the
recognition and enforcement of all parts of the award
other than those relating to the determination of the
arbitral tribunal’s fees and expenses.

KLRCA i-ARBITRATION RULES63

Article 42
Allocation of Costs

1.  The costs of the arbitration shall in principle
be borne by the unsuccessful party or parties.
However, the arbitral tribunal may apportion each
of such costs between the parties if it determines
that apportionment is reasonable, taking into
account the circumstances of the case.

2.  The arbitral tribunal shall in the final award or, if it
deems appropriate, in any other award, determine
any amount that a party may have to pay to
another party as a result of the decision on
allocation of costs.

Article 43
Deposit of Costs

1.  The arbitral tribunal, on its establishment, may
request the parties to deposit an equal amount as
an advance for the costs referred to in article 40,
paragraphs 2 (a) to (c).

2.  During the course of the arbitral proceedings
the arbitral tribunal may request supplementary
deposits from the parties.

3.  If an appointing authority has been agreed upon
or designated, and when a party so requests and
the appointing authority consents to perform the
function, the arbitral tribunal shall fix the amounts
of any deposits or supplementary deposits only after
consultation with the appointing authority, which
may make any comments to the arbitral tribunal
that it deems appropriate concerning the amount of
such deposits and supplementary deposits.

KLRCA i-ARBITRATION RULES64

4.  If the required deposits are not paid in full within
30 days after the receipt of the request, the arbitral
tribunal shall so inform the parties in order that one
or more of them may make the required payment.
If such payment is not made, the arbitral tribunal
may order the suspension or termination of the
arbitral proceedings.

5.  After a termination order or final award has
been made, the arbitral tribunal shall render an
accounting to the parties of the deposits received
and return any unexpended balance to the parties.

Part III

SCHEDULES

Amount In Dispute
(USD)

Up to 50,000

From 50,001
to 100,000

From 100,001
to 500,000

From 500,001
to 1,000,000

From 1,000,001
to 2,000,000

From 2,000,001
to 5,000,000

From 5,000,001
to 10,000,000

From 10,000,001
to 50,000,000

From 50,000,001
to 80,000,000

From 80,000,001
to 100,000,000

From 100,000,001
to 500,000,000

Above 500,000,001

Arbitrator’s Fees
(USD)

3,500

3,500 + 8.2% excess over
50,000

7,600 + 3.6% excess over
100,000

22,000 + 3.02% excess over
500,000

37,100 + 1.39% excess over
1,000,000

51,000 + 0.6125% excess over
2,000,000

75,500 + 0.35% excess over
5,000,000

93,000 + 0.181% excess over
10,000,000

165,300 + 0.0713% excess
over 50,000,000

186,700 + 0.0535% excess
over 80,000,000

197,400 + 0.0386% excess
over 100,000,000

351,800 + 0.03% excess over
500,000,000 up to a maximum
of 2,000,000

Schedule 1
Schedule of Fees

INTERNATIONAL ARBITRATION

Appendix A1
Arbitrator’s Fees (USD)

KLRCA i-ARBITRATION RULES66

Amount In Dispute
(USD)

Up to 50,000

From 50,001
to 100,000

From 100,001
to 500,000

From 500,001
to 1,000,000

From 1,000,001
to 2,000,000

From 2,000,001
to 5,000,000

From 5,000,001
to 10,000,000

From 10,000,001
to 50,000,000

Above 50,000,001

Administrative Costs
(USD)

2,050

2,050 + 1.26% excess over
50,000

2,680 + 0.705% excess over
100,000

5,500 + 0.5% excess over
500,000

8,000 + 0.35% excess over
1,000,000

11,500 + 0.13% excess over
2,000,000

16,700 + 0.088% excess over
5,000,000

21,100 + 0.052% excess over
10,000,000

41,900 (maximum)

Appendix B1
Administrative Costs (USD)

KLRCA i-ARBITRATION RULES67

DOMESTIC ARBITRATION

Appendix A2
Arbitrator’s Fees (RM)

Amount In Dispute
(RM)

Up to 150,000

From 150,001
to 300,000

From 300,001
to 1,500,000

From 1,500,001
to 3,000,000

From 3,000,001
to 6,000,000

From 6,000,001
to 15,000,000

From 15,000,001
to 30,000,000

From 30,000,001
to 150,000,000

From 150,000,001
to 240,000,000

From 240,000,001
to 300,000,000

From 300,000,001
to 1,500,000,000

Above 1,500,000,000

Arbitrator’s Fees
(RM)

9,200

9,200 + 7.2667% of excess
over 150,000

20,100 + 3.1667% of excess
over 300,000

58,100 + 2.66% of excess
over 1,500,000

98,000 + 1.2233% of excess
over 3,000,000

134,700 + 0.7189% of excess
over 6,000,000

199,400 + 0.3080% of excess
over 15,000,000

245,600 + 0.159% of excess
over 30,000,000

436,400 + 0.0628% of excess
over 150,000,000

492,900 + 0.0472% of excess
over 240,000,000

521,200 + 0.034% of excess
over 300,000,000

928,800 + 0.03% of excess
over 1,500,000,000 up to a
maximum of 6,000,000

KLRCA i-ARBITRATION RULES68

Appendix B2
Administrative Costs (RM)

Amount In Dispute
(RM)

Up to 150,000

From 150,001
to 300,000

From 300,001
to 1,500,000

From 1,500,001
to 3,000,000

From 3,000,001
to 6,000,000

From 6,000,001
to 15,000,000

From 15,000,001
to 30,000,000

From 30,000,001
to 150,000,000

Above 150,000,001

Administrative Costs
(RM)

5,500

5,500 + 1.0667% excess over
150,000

7,100 + 0.625% excess over
300,000

14,600 + 0.44% excess over
1,500,000

21,200 + 0.3067% excess over
3,000,000

30,400 + 0.1522% excess over
6,000,000

44,100 + 0.0773% excess over
15,000,000

55,700 + 0.0458% excess over
30,000,000

110,600 (maximum)

KLRCA i-ARBITRATION RULES69

KLRCA i-ARBITRATION RULES70

Appendix C
Emergency Interim Relief Costs and Fees

The following fees shall be payable upon making
an application under Rule 7 and Schedule 2 for an
emergency interim relief:

International Arbitration

Domestic Arbitration

International Arbitration

Domestic Arbitration

1.    Administration Costs for Emergency Interim
       Relief Applications (non-refundable):

2.    Emergency Arbitrator’s Fees:

USD2,000.00

RM5,000.00

USD10,000.00

RM30,000.00

KLRCA i-ARBITRATION RULES71

Appendix D
Notes on Schedule of Fees

1.  Registration Fees

 1.1  The registration fee as specified in Rule 2(1)
(c), is non-refundable and does not constitute
part of KLRCA’s administrative costs.

 1.2  The registration fee shall be payable by the
claimant in full and shall not be subjected to
any deductions.

2.  Arbitral Tribunal Fees

 2.1  The fees payable to the arbitrator do not include
any possible taxes such as service tax, withholding
tax or other taxes or charges applicable to the
arbitrator’s fees. Parties have a duty to pay any
such taxes or charges; however the recovery
of any such taxes or charges is a matter solely
between the arbitrator and the parties.

 2.2 Arbitrator’s expenses:

  a)  An arbitrator shall be entitled to claim
for reasonable out-of-pocket expenses
relating to reasonable travel, living and
other miscellaneous expenses whilst
attending to the arbitration proceedings.

  b)  The arbitral tribunal’s reasonable out-
of-pocket expenses necessarily incurred
shall be borne by the parties and
reimbursed at costs.

KLRCA i-ARBITRATION RULES72

  c)  The expenses will be reimbursed upon
submission and verification by the
KLRCA of the supporting invoices and
receipts in original.

  d)  An arbitrator who is required to travel
outside his place of residence will be
reimbursed with business class airfare,
subject to the submission of invoice
or receipt in original to the KLRCA
for verification.

  e)  In addition to the out-of-pocket expenses,
a per diem of RM1800.00 shall be paid to
an arbitrator who is required to travel
outside his place of residence, whenever
overnight accommodation is required.
Where no overnight accommodation is
required, a per diem of RM900.00 shall
be paid.

  f)  The expenses covered by the per diem
above shall include the following items
which are not claimable as out-of-
pocket expenses:

   – Hotel accommodation;
   – Meals/beverages;
   – Laundry/dry cleaning/ironing;
   – City transportation
    (excluding airport transfers);
   – Communication costs
    (telephone, faxes, internet usage etc.);
    and
   – Tips.

KLRCA i-ARBITRATION RULES73

 2.3  Any disbursement towards the arbitrator’s
out-of pocket and per diem expenses shall be
additional to the arbitrator’s fees and do not
form part of the advance preliminary deposits.
Parties shall bear these costs separately in
equal shares upon request from KLRCA.

 2.4 Payment of fees to arbitrator:

  a)  The arbitrator’s fees shall only be payable
upon the delivery of the award to KLRCA
in accordance with Rule 12.

  b)  The arbitrator shall not be entitled to any
interim fees.

  c)  Where the arbitral tribunal constitutes
more than one arbitrator, the chairman
of the arbitral tribunal shall receive 40%
of the total arbitrator’s fee and the
co-arbitrators shall receive the remaining
60% in equal shares.

  d)  Where an arbitration matter is settled or
disposed of before the commencement
of hearing, the costs of the arbitration
shall be determined by the Director of
the KLRCA.

3.  KLRCA Administrative Costs

 3.1  The KLRCA administrative costs shall be
calculated in accordance with the Appendix
B1 and B2 of the Schedule of Fees, as the
case may be.

KLRCA i-ARBITRATION RULES74

 3.2  The KLRCA administrative costs shall be
payable by the parties in equal shares and
shall form a part of the advance preliminary
deposit.

 3.3  The KLRCA administrative costs are not
inclusive of other services such as rental of
facilities, refreshments, secretarial assistance,
transcription services, videoconferencing
and interpretation services which shall be
chargeable on the requesting party separately.

4.  Advance Preliminary Deposit

 4.1  Advance preliminary deposit and/or additional
deposits shall include the following:

  a)  Fees of the arbitral tribunal [for a panel
of more than one arbitrator, the total
arbitrator’s fee shall be derived by
multiplying the amount of an arbitrator’s
fees with the number of the arbitrators].

  b)  KLRCA administrative costs (as per
Schedule of Fees).

  c)  Bank charges amounting to RM150.00
for domestic arbitrations or USD150.00
for international arbitrations.

 4.2  The advance preliminary deposit and
additional deposits, if any, shall be payable
by the parties in equal shares pursuant to
Rule 14.

KLRCA i-ARBITRATION RULES75

Schedule 2
Emergency Arbitrator

1.  A party in need of emergency interim relief may,
concurrent with or following the filing of a Notice
of Arbitration but prior to the constitution of
the arbitral tribunal, make an application for
emergency interim relief. The application for
emergency relief shall be made in writing and
shall be sent simultaneously to the Director of
the KLRCA and all other parties to the arbitration.
The application for emergency interim relief
shall include:

 a)  Applicant’s name, description, address and
contact details of other parties;

b)  Name, description and address of people
representing the applicant;

c)  Description of circumstances giving rise to
the application;

d)  Reasons why the applicant requires the
emergency relief;

e)  A statement certifying that all other parties
have been notified or an explanation of the
steps taken in good faith to notify the other
parties;

f)  The relevant arbitration clause or arbitration
agreement; and

g)  An application fee pursuant to Appendix C.

KLRCA i-ARBITRATION RULES76

2.  The Director of the KLRCA shall, if he determines
that the KLRCA should accept the application,
seek to appoint an emergency arbitrator within
2 business days (meaning working days and not
including weekends and public holidays) of receipt
by the Director of the KLRCA of such application
and payment of any required fee.

3.  Prior to accepting appointment, a prospective
emergency arbitrator shall disclose to the
Director of the KLRCA any circumstance that may
give rise to justifiable doubts as to his impartiality
or independence.

4.  An emergency arbitrator may not act as an
arbitrator in any future arbitration relating to the
dispute, unless agreed by the parties.

5.  Once the emergency arbitrator has been appointed,
KLRCA shall so notify the parties. Thereafter, all
written communications from the parties shall
be submitted directly to the emergency arbitrator
with a copy to the other party and KLRCA.

6.  In the event there is any challenge to the
appointment of the emergency arbitrator, it must
be made within one business day of the
communication by the Director of KLRCA to the
parties of the appointment of the emergency
arbitrator or the circumstances disclosed. Rule
5 shall apply to the emergency arbitrator, except
that the time limits set out in the Rules 5(3) and
5(6) are reduced to 3 days.

KLRCA i-ARBITRATION RULES77

7.  Upon withdrawal or sustainment of the challenge,
the substitute emergency arbitrator shall be
appointed in accordance with the procedure
provided in Rule 4.

8.  If the parties have agreed on the seat of arbitration,
such seat shall be the seat of the emergency
interim relief proceedings. Where the parties have
not agreed on the seat of arbitration, and without
prejudice to the arbitral tribunal’s determination
of the seat of arbitration pursuant Rule 6, the seat
of the emergency interim relief proceedings shall
be Kuala Lumpur, Malaysia.

9.  The emergency arbitrator shall, as soon as
possible but in any event within 2 business days of
appointment, establish a schedule for consideration
of the application for emergency interim relief.
Such schedule shall provide a reasonable
opportunity to all parties to be heard, but may
provide for proceedings by telephone conference or
on written submissions as alternatives to a formal
hearing. The emergency arbitrator shall have the
powers vested in the arbitral tribunal pursuant to
these Rules, including the authority to rule on his
own jurisdiction, and shall resolve any disputes
over the application of this Schedule 2.

10.  The emergency arbitrator shall have the power to
order or award any interim relief that he deems
necessary. The emergency arbitrator shall give
reasons for his decision in writing.

KLRCA i-ARBITRATION RULES78

11.  Any order or award of the emergency arbitrator
shall be made within 15 days from the date of
appointment notification to parties and this period
of time may be extended by agreement of the
parties or, in appropriate circumstances, by the
Director of KLRCA.

12.  The emergency arbitrator shall deliver sufficient
copies of the order or award to the Director of
the KLRCA.

13.  The KLRCA shall notify the parties of its receipt
of the order or award from the arbitral tribunal.
The order or award shall be deemed to have been
received by the parties upon collection by hand
by an authorised representative or upon delivery
by registered mail.

14. Upon the constitution of the arbitral tribunal:

 a)  The emergency arbitrator shall have no further
power to act;

b)  The arbitral tribunal may reconsider, modify
or vacate the interim award or order of
emergency interim relief issued by the
emergency arbitrator; and

c)  The arbitral tribunal is not bound by the
reasons given by the emergency arbitrator.

15.  Any order or award issued by the emergency
arbitrator shall cease to be binding:

a)  if the arbitral tribunal is not constituted within
90 days of such order or award;

KLRCA i-ARBITRATION RULES79

b)  when the arbitral tribunal makes a final
award; or

c) if the claim is withdrawn.

16.  Any interim award or order of emergency interim
relief may be conditional on provision of appropriate
security by the party seeking such relief.

17.  An order or award pursuant to this Schedule 2
shall be binding on the parties when rendered.
By agreeing to arbitration under these Rules, the
parties undertake to comply with such an order or
award without delay.

18.  The costs associated with any application pursuant
to this Schedule 2 shall initially be apportioned by
the emergency arbitrator, subject to the power
of the arbitral tribunal to determine the final
apportionment of such costs.

19.  The decision of the emergency arbitrator as to
such matters is final and not subject to appeal.

KLRCA i-ARBITRATION RULES80

Schedule 3
Model Arbitration Clause

Any dispute, controversy or claim arising out of or
relating to this contract or the breach, termination
or invalidity thereof shall be settled by arbitration in
accordance with the KLRCA i-Arbitration Rules.

Schedule  4
Form of Agreement

Parties wishing to substitute an existing arbitration
clause for one referring the dispute to arbitration
under the KLRCA i-Arbitration Rules may adopt the
following form of agreement:

“The parties hereby agree that the dispute arising out
of the contract dated _____________ shall be settled
by arbitration under the KLRCA i-Arbitration Rules.”

This form may also be used where an agreement/
contract does not contain an arbitration clause.

Part IV

GUIDE TO KLRCA
i-ARBITRATION
RULES

KLRCA i-ARBITRATION RULES82

1. What are the KLRCA i-Arbitration Rules?

The KLRCA i-Arbitration Rules are a set of
procedural rules covering all aspects of the
arbitration process, which parties may agree
to in part or in whole in order to help resolve
their domestic or international disputes. KLRCA
i-Arbitration Rules adopt UNCITRAL Arbitration
Rules 2010, in its second part, which provide,
among other things:

a) A model arbitration clause for contracts;

b)  Procedures for the appointment and challenge
of arbitrators;

c)  Procedures for the conduct of arbitration
proceedings; and

d)  Requirements about the form, effect and
interpretation of an arbitration award.

The KLRCA i-Arbitration Rules are of Shariah-
compliant and suitable for arbitration of disputes
arising from commercial transactions premised
on Islamic principles. The rules takes into account
and allows for the reference process to Shariah
Advisory Council or Shariah expert whenever the
arbitral tribunal has to form an opinion on a point
related to Shariah principles.

KLRCA i-ARBITRATION RULES83

2.  Are the arbitration proceedings confidential
in nature?

Yes, arbitration under the KLRCA i-Arbitration
Rules is private and confidential in nature as
provided under Article 28 and Rule 16. The arbitral
tribunal, the parties and the KLRCA shall keep
confidential all matters relating to the arbitral
proceedings. Confidentiality also extends to any
award, except where its disclosure is necessary
for purposes of implementation and enforcement.
Article 28 of the KLRCA i-Arbitration Rules
specifies that hearings shall be held in camera
unless the parties agree otherwise.

3. Why does the rule have Part I and Part II?
 Which part is applicable to the arbitration?

KLRCA i-Arbitration Rules has two Parts. Part I
specifies the KLRCA Rules and Part II specifies the
UNCITRAL Rules. Part II incorporates UNCITRAL
Arbitration Rules 2010, without any modifications.
Modifications to the UNCITRAL Rules however
appear under Part I of the Rules. Thus, part II of
the Rules shall be read in conjunction with part I of
the Rules.

4.  What type of disputes can be resolved by
arbitration under the KLRCA Rules?

Any dispute which arises out of an agreement which
is premised on the principles of Shariah.

KLRCA i-ARBITRATION RULES84

5.  What are the advantages in using the KLRCA
Rules?

The KLRCA i-Arbitration Rules incorporates
the UNCITRAL Arbitration Rules which is
comprehensive, time tested and internationally
accepted. KLRCA provides administrative
assistance to the tribunal and parties with
available facilities, appointment of arbitrator,
challenge of arbitrator, reasonable schedule
of fees and accounting of the fees and costs
applied to the proceedings. KLRCA’s roles and
functions are identified in the Part I of the rules.

6.  What is the effect of exclusion of Part III of the
Malaysian Arbitration Act 2005?

The Rules (Rule 1(1)(c)) precludes the application
of Section 41, 42, 43 and 46 of the Malaysian
Arbitration Act 2005 where the seat of arbitration
is in Malaysia, bringing domestic arbitrations in
line with international standards.

By agreeing to arbitrate under the Rules, parties
therefore agree to waive their rights to apply to the
High Court of Malaya for the reference and appeal
of points of law.

This brings the arbitration under the Rules in
line with the UNCITRAL Model Law and the
prevailing trends of minimal intervention by the
curial courts. It ensures finality in respect of
domestic arbitral awards.

KLRCA i-ARBITRATION RULES85

7. How is the seat of arbitration determined?

Where parties have not clearly stipulated the seat
of the arbitration, then pursuant Rule 6(1), the seat
of arbitration shall be Kuala Lumpur, Malaysia
unless the arbitral tribunal determines, having
regard to all the circumstances of the case, that
another seat is more appropriate.

The Rules provides for certainty and smooth
progression of arbitral proceedings.

8.  Where can I find the KLRCA i-Arbitration Rules
model clause?

The parties who wish to resort to KLRCA i-Arbitration
Rules may resort to incorporate KLRCA’s model
clause in their agreement. The model clause can
be found under Schedule 3 of the rules.

9.  What do I do if I do not have a model arbitration
clause in my agreement?

If both the parties are agreeable that the dispute
must be resolved according to KLRCA i-Arbitration
Rules, however, there is no arbitration clause in
their original agreement; then they may enter into
an arbitration agreement in the form as specified
in Schedule 4 of the rules.

KLRCA i-ARBITRATION RULES86

10.  How do I begin with a matter under the
KLRCA i-Arbitration Rules?

A party initiating the dispute shall be required
to submit a written request to the Director of the
KLRCA together with the copy of the Notice of
Arbitration served on the Respondent in the form
and manner required under Article 3 of Part II,
a non-refundable registration fee of USD250.00
for International arbitration and RM950.00 and
the following documentation:-

a)  The arbitration clause and contract document
containing the arbitration clause; and

b)  Confirmation and proof of service of the
Notice of Arbitration;

11.  When is the arbitration deemed commenced
under the KLRCA i-Arbitration Rules?

Arbitration under the auspices of KLRCA shall be
deemed to commence on the date the Director of
the KLRCA receives a written request from the
party initiating the arbitration complete with the
documentation and registration fee.

12.  How are arbitrators appointed under the
KLRCA Rules?

The arbitrator’s appointment shall be made by
the Director of the KLRCA. The Director of KLRCA
will now confirm the appointment of arbitrators
appointed by parties or any appointing authority
agreed by them. An agreement between the

KLRCA i-ARBITRATION RULES87

parties to appoint an arbitrator by them or any
appointing authority agreed by them shall be
treated as an agreement to nominate an arbitrator
and not an agreement to appoint an arbitrator.

13.  Can an appointed arbitrator be challenged
under the Rules?

Yes, under the revised rules the arbitrator’s
appointment can be challenged by the parties.
The detailed procedure for challenge has been
incorporated under Rule 5. Upon receipt of the
notice of challenge, if the other party does not
agree and if an arbitrator refuses to withdraw,
the party challenging may apply to the Director of
the KLRCA to decide on the challenge.

14.  Are parties restricted to appointing arbitrators
from KLRCA’s panels of arbitrators when
arbitrating under the KLRCA Rules?

No, there are no restrictions imposed, parties
are free to appoint arbitrators of their choice. The
parties’ appointments of arbitrator shall be deemed
as nomination only and subject to confirmation
of appointment by the Director of the KLRCA.

15.  Must the appointed arbitrator be a Muslim or a
Shariah scholar?

No, there are no requirements for an arbitrator to
be a Muslim or a Shariah scholar to be appointed
as an arbitrator in arbitration under the KLRCA
i-Arbitration Rules.

KLRCA i-ARBITRATION RULES88

16.  How would I determine if a matter falls under
the purview of a particular Shariah council?

It is important to know the law applicable at
your place(s) of business. Due to Government
regulation of the banking sector in relation to Islamic
financial instruments and capital requirements,
some Shariah aspects may come under national
laws. In Malaysia, for example Islamic banking
is regulated by the Central Bank of Malaysia and
the Islamic Capital Market is regulated by the
Securities Commission. Both maintain Shariah
Advisory Councils.

17.  What if the matter is not regulated by a
specific Shariah council?

Not all countries will have legal regimes
regulating the Islamic banking industry. In this
case, it is important for parties to be clear of the
law that will apply to any Shariah issues, given
the many interpretations and schools of thought
available. Selecting the right council or expert,
whether through a bank or otherwise, is an
effective way of specifying the Shariah law
governing a party’s agreement.

18. What is the late payment charge?

The late payment charge presents an optional
mechanism to compensate a successful party
for late payment of damages under an award and
dissuade unsuccessful parties from deliberately
delaying payment. This recognises the inability of
the tribunal to award interest on these damages,

KLRCA i-ARBITRATION RULES89

given the prohibition on interest under Shariah
law, and ensures all parties under the Rules can be
adequately compensated.

19.  What is the basis of the late payment charge
as defined under the Rules and are parties bound
by the same?

It is premised upon the circular published by
the Shariah Advisory Councils of both the
Central Bank of Malaysia and the Securities
Commission and as outlined in their Guidelines
titled ‘Shariah Resolutions in Islamic Finance’.
It is available on their website and provides
the formula for how the late payment charge
is calculated. This is in the absence of parties’
agreement to a different scheme.

20.  Does the arbitral tribunal have to award late
payment charge?

The late payment charge is optional. It is merely
a tool sanctioned by the Shariah Advisory Council
that is available to the tribunal if it is considered
appropriate.

21.  How much will it cost to arbitrate under the
KLRCA i-Arbitration Rules?

The KLRCA Schedule of Fees will be applicable to
arbitration unless the arbitral tribunal and parties
agrees otherwise and such agreement must be
reached within the period of 30 days from the
appointment of the arbitral tribunal.

KLRCA i-ARBITRATION RULES90

The cost to arbitrate would include the payment of
a non-refundable registration fees by the Claimant
amounting to USD500.00 for an international
matter and RM1000.00 for a domestic matter.

The arbitral tribunal fees and KLRCA’s
administrative costs shall be calculated on an
ad valorem basis depending on the amount of
dispute. The scale for purposes of determination
of fees appears in Schedule 1 Part III of the
KLRCA i-Arbitration Rules.

A note to the Schedule of Fees has been included
in Appendix D of Schedule 1 Part III to regulate the
payment of disbursements to the arbitral tribunal
and KLRCA’s administrative costs and expenses.

22.  What happens if the parties fail to pay the
required provisional or additional deposits?

The payments of deposits are regulated under
Rule 14. If the parties fail to pay the required
deposits, the Director of the KLRCA shall ask
the other party to pay on behalf of the other. The
arbitral tribunal shall not proceed with the arbitral
proceedings unless the provisional deposits
are paid in full by one or more of the parties. In
instances where the claimant pays on behalf of the
respondent, the Director of the KLRCA may advise
the arbitral tribunal to proceed with the matter
without consideration to the counterclaim raised
by the respondent. However, if the claimant
defaults to pay its share, the arbitral tribunal has
the authority under the rules to suspend until the
required payments are made or terminate the
proceedings or any part thereof.

KLRCA i-ARBITRATION RULES91

23. How long would the entire proceedings take?

There is no restriction as to time to complete
arbitration under the KLRCA i-Arbitration Rules;
however, there are certain mechanism introduced
in the rules to ensure that arbitration proceeds in
a time efficient manner. For instance, under Rule
10 the arbitral tribunal is accorded with powers to
conduct the matter in such manner as it considers
appropriate and may limit the time available for
each party to present its case and under Rule 12
the arbitral tribunal is required to render its final
award within a period of 3 months from the date of
delivery of the closing oral submissions or written
statements. There are extensions of time allowed
which is subject to the approval of the Director of the
KLRCA. Another provision dealing with time under
the Part II, Article 25, is where the periods of time
fixed by the arbitral tribunal for the communication
of written statements (including the statement of
claim and statement of defence) shall not exceed
45 days.

24.  How does a party apply for an emergency
arbitrator?

The new provision for the appointment of
emergency arbitrators is found under Schedule 2.

Rule 7 and Schedule 2 allows the party in need
of emergency interim relief to make such an
application and the application must be made
concurrently with or after the filing of a Notice of
Arbitration but not after the constitution of the
arbitral tribunal.

KLRCA i-ARBITRATION RULES92

25.  What are the types of interim measures a party
may apply for?

The interim measures are as found under Article 26.

26.  What are the powers of the emergency
arbitrator?

The emergency arbitrator shall act to determine
all applications for emergency interim measures
until the constitution of the proper arbitral tribunal.

Emergency interim relief granted by an emergency
arbitrator shall have the same effect as an interim
measure and shall be binding on the parties
(refer to Schedule 2 and Rule 12).

27.  Are the decisions of the emergency arbitrator
appealable?

The decisions of the emergency arbitrator are
not appealable (Schedule 2 and Rule 12). It may
however be modified, varied or vacated by the
subsequent arbitral tribunal upon review (refer to
Schedule 2 and Rule 7).

i-Arbitration Rules

www.klrca.org.my

KUALA LUMPUR REGIONAL
CENTRE FOR ARBITRATION
( ESTABLISHED UNDER THE AUSPICES OF THE
ASIAN-AFRICAN LEGAL CONSULTATIVE ORGANISATION )

12, Jalan Conlay,
50450 Kuala Lumpur, Malaysia

T   +603 2142 0103
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