The Federal Court’s ruling in Asian International Arbitration Centre v One AmerinResidence Sdn Bhd & Ors and another appeal [2025] 2 MLJ 634 clarifies that the Asian International Arbitration Centre (AIAC) enjoys immunity from judicial review in its role as the statutory adjudication authority under the International Organisations (Privileges and Immunities) Act 1992 (IOPIA) and the Construction Industry Payment and Adjudication Act 2012 (CIPAA), provided it acts within its legal powers and in good faith.
Background of the Case
A payment dispute arose from the construction project of Amerin Mall and Residence, where One Amerin Residence Sdn Bhd (a developer), appointed Ragawang Corp Sdn Bhd, as the contractor. Ragawang initiated adjudication under CIPAA, with AIAC appointing an adjudicator.
One Amerin challenged AIAC’s actions, including the adjudicator’s appointment, the validity of AIAC’s Adjudication Rules and Procedure (AIAC Rules), and the imposition of a RM10,600 administrative fee, via a judicial review application in the High Court, alleging these were beyond CIPAA’s scope and unconstitutional.
The High Court struck out the application, citing AIAC’s immunity under IOPIA and CIPAA. The Court of Appeal reversed this, holding that AIAC’s immunity did not extend to judicial review proceedings or its adjudication role. This case later was appealed to the Federal Court.
Federal Court (FC) ruling
The FC unanimously allowed AIAC’s appeals, setting aside the Court of Appeal’s decision. It addressed 3 key questions of law:
1. Immunity Under IOPIA
- The court held that AIAC’s immunity under paragraph 1 of the First Schedule to IOPIA, which protects it from suit and other legal processes, applies to judicial review proceedings, even in its role as a statutory adjudication authority. The court interpreted “legal process” to include judicial review, aligning with Malaysia’s international law obligations under the 1981 host country agreement with the Asian-AfricanLegal Consultative Organization (AALCO).
2. No Ouster of High Court’s Powers
- The court declined to answer whether IOPIA and CIPAA oust the High Court’s judicial review powers, deeming the question misconceived. It clarified that these statutes grant immunity to AIAC for actions done in good faith, not exclude the court’s authority to review acts done in bad faith. The court provides that immunity clauses (which protect from suit) are not the same as ouster clauses (which attempt to exclude the court’s jurisdiction entirely).
3. No Distinction in AIAC’s Capacity
- The court ruled that no distinction is needed between AIAC’s roles as an internationalarbitral institution and statutory adjudication authority. AIAC’s adjudication functions under CIPAA fall within its broader alternative dispute resolution (ADR) mandate, entitlingit to immunity under both IOPIA and CIPAA.
The court found that One Amerin failed to prove that AIAC acted ultra vires of CIPAA or in bad faith, noting:
- The adjudicator’s appointment was valid under section 21(b)(i) of CIPAA.
- AIAC Rules were lawfully made under sections 32 and 33 of CIPAA.
- The administrative fee was authorized and not unconstitutional.
Key Takeaways
1. AIAC’s Immunity
- Developers and any other parties cannot challenge AIAC’s actions through judicial review unless they can prove bad faith or ultra vires conduct. This reinforces CIPAA’s objective of providing a swift, cost-effective dispute resolution mechanism.
2. Compliance with CIPAA Processes
- Parties must adhere to CIPAA’s framework, including timely payment of fees and acceptance of AIAC’s administrative decisions. Challenges to procedural matters, such as adjudicator appointments or fees, are unlikely to succeed absent exceptional circumstances.
At a Glance
AIAC enjoys broad immunity from judicial review under both IOPIA and CIPAA, provided it acts in good faith and within its statutory functions. This immunity does not apply to acts done in bad faith or ultra vires acts. The FC also clarified that immunity clauses are not ouster clauses, and the High Court retains jurisdiction where bad faith is alleged.
– By George Miranda, Joy Sam Jia Qian, Nurafiqah ‘Izzati –
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.
