While most of us have a general grasp of what court processes are, not everyone is familiar with the arbitration, a kind of alternative conflict resolution. This private process is done without a judge and can even be finished in your workplace conference room, yet it has the same goal as court proceedings (resolving a conflict).
Arbitration, on the other hand, can only take place if all parties agree to have their problems addressed through arbitration, unlike court processes. An arbitration clause in the contract, for example, should be in place if a disagreement arises as a result of a deal. When it comes to arbitration, parties have a lot of freedom to decide how the processes should progress. Like court procedures, parties can agree on the arbitrator (the person who will make a decision) and other elements, unlike court proceedings.
Due to the concept of party autonomy, arbitration is generally perceived as less formal than the court process. Formalities and complexities of a court process are not necessary for the parties (e.g.: courtroom etiquette). As an example, arbitration can be held at either party’s offices or at the Asian International Arbitration Centre (AIAC).
As a result, arbitration is more expensive than a trial in a court. There will be arbitrator’s fees (which, depending on the arbitration rules selected, are normally dependent on the claim’s value), administrative expenses for the arbitration institution (if institutionalized arbitration is adopted), and other extraneous charges such as meeting room rental. Comparatively, court filing fees in Malaysia are negligible.
There is no judge, only an arbitrator.
Arbitrators are those who preside over arbitration proceedings (not a judge). The arbitral tribunal can consist of a single arbitrator or an odd number of arbitrators, such as three arbitrators or five arbitrators, depending on the arbitration agreement or arbitration rules established.
Arbitrators do not have to be lawyers, judges, or anybody else with legal training. A disagreement over construction may require an arbiter with engineering degrees, or at least years of experience in the construction sector. When you’re in a courtroom, the judge assigned to hear your case is chosen at random, and you can’t choose or place limitations on the judge’s qualifications. Arbitrators can also be appointed by an impartial third party (e.g. the Asian International Arbitration Centre) if the parties are unable to reach an agreement on one.
Arbitration is a private proceeding.
Proceedings in court can be a public affair: some court rulings are published, court documents can be accessed by the public via online file search, and trials are frequently held in “open court” (which means any member of the public can observe the proceedings). As opposed to litigation, arbitration involves just the parties who have agreed to it. So, the Malaysian Arbitration Act 2005 was changed to state that no party may publish, disclose or communicate any information relevant to the arbitration processes and/or the arbitral award, unless otherwise agreed by the parties to the arbitration proceeding or the arbitral decision.