ARBITRATION PROCEEDINGS
Notice of Arbitration A party (the “Claimant”) who wishes to seek recourse to arbitration
List of Arbitrators by PORAM
Appointment of Arbitrators
RELEVANT STEPS TO BE TAKEN
shall submit its request to PORAM, who shall then forward a copy of
the request to the other party (the “Respondent”).
[Please refer to Section 1, Part III(1)]
PORAM shall notify the parties the date of commencement of the
arbitration and shall deliver to them a Notice of Commencement.
[Please refer to Section 1, Part III(1)]
In any arbitration held between the first Seller and the last Buyer or
any two immediate contracting parties in a String Contract, the
Claimant shall submit its request to PORAM who shall then forward a
copy of the request to the Respondent and also to all other parties in
the String dispute.
[Please refer to Section 1, Part III(3)]
The request for arbitration shall be in form(s) Appendix I or Appendix
1 A as applicable.
[Please refer to Section 1, Part III(1)]
Time limit
In the case of any dispute on quality, the Claimant shall submit its
Notice of Arbitration to PORAM within twenty-one (21) calendar
days from date of receipt of the goods.
[Please refer to Section 1, Part III(2)]
In the case of any dispute other than on quality, the Claimant shall
submit its request for arbitration to PORAM within one hundred and
twenty (120) calendar days after the expiry of the contract shipment
period or the Bill of Lading date, whichever is later.
[Please refer to Section 1, Part III(2)]
Within five (5) working days of receiving the request for arbitration,
PORAM shall forward the List of Arbitrators to the Claimant. At the
same time, PORAM shall notify the Respondent of the request for
arbitration and also forward to them a List of Arbitrators.
[Please refer to Section 1, Part III(4)]
The disputes referred to arbitration under these Rules may be
settled by a Sole Arbitrator or by a panel of Arbitrators comprising
three Arbitrators.
[Please refer to Section 1, Part IV(1)]
Sole Arbitrator
Each party shall nominate its arbitrator within fourteen (14) calendar
days of the dispatch of the List of Arbitrators by PORAM. Within such
fourteen (14) calendar days both parties may nominate an Arbitrator
to act as Sole Arbitrator and inform PORAM accordingly.
[Please refer to Section 1, Part IV(3)]

The nominated Arbitrator shall be given seven (7) day to state their
acceptance/rejection of their nomination. If the Arbitrator does not
accept the nomination, the affected party shall be given another
seven (7) days to re-nominate, failing which the Chairman of PORAM
shall appoint on the party’s behalf.

The re-nominated Arbitrator shall also be given seven (7) days to

state their acceptance, and should the re-nomination fail, the
Chairman shall appoint on the party’s behalf.
[Please refer to Section 1, Part IV(3)]

Panel of Arbitrators
When the dispute is to be referred to three Arbitrators, each party
shall nominate respectively one Arbitrator within fourteen (14)
calendar days of the dispatch of the List of Arbitrators by PORAM to
both parties.

Upon receipt of the acceptance from the nominated Arbitrator in the

form as in Appendix II, the nominated Arbitrator’s appointment shall
be deemed to be confirmed.

If either party fails to nominate its respective Arbitrator within this

time period, the party shall be given a final seven (7) days period to
respond. When the process is completed and no Arbitrator is
nominated, then the final nomination shall be made by the Chairman
of PORAM.
[Please refer to Section 1, Part IV(4)]

Within seven (7) calendar days of the acceptance of the nomination

as Arbitrator, the two Arbitrators shall appoint a third Arbitrator
failing which the appointment shall be made by the Chairman of
PORAM.
[Please refer to Section 1, Part IV(5)]

The three Arbitrators shall constitute the Panel of Arbitrators. The

third Arbitrator shall act as the Chairman at all meetings / hearings.
[Please refer to Section 1, Part IV(5)]

No person shall be eligible to act who, or whose company or firm,

has any direct or indirect interest in the transaction in the dispute.
[Please refer to Section 1, Part IV(6)]
 Vacancy
If any Arbitrator should resign, die, withdraw, be disqualified, refuse
to be disqualified or be unable to perform the duties of his office for
any reason whatsoever, PORAM shall, upon due consideration,
declare the office vacant. Any such vacancy shall be filled in the same
manner as an original appointment.
[Please refer to Section 1, Part V(1)]

In case of a replacement of any Arbitrator, the hearing will be re-

heard either at his/her option or at the option of the disputing
parties.
[Please refer to Section 1, Part V(3)]

An order or ruling of the Arbitral Tribunal made prior to the

replacement of an Arbitrator under this section shall not be invalid
solely on the grounds there has been a change in the composition of
the Arbitral Tribunal.
[Please refer to Section 1, Part V(4)]

Disclosure and Challenge An arbitrator, once appointed or nominated, shall immediately in

Procedure writing disclose circumstances likely to give rise to justifiable doubts
as to his/her impartiality or independence, unless he/she has already
informed in writing in the Acceptance Form (Appendix II of PORAM
Rulesof Arbitration and Appeal).

An Arbitrator may be challenged if circumstances exist that give rise

to justifiable doubts as to the Arbitrator’s impartiality or
independence. A party may challenge the Arbitrator nominated by
him/her only for reasons of which he/she becomes aware after the
appointment has been made.

A party who intends to challenge an Arbitrator shall send a notice

giving reasons for the challenge to the Tribunal and to PORAM within
fifteen (15) days after being notified of the appointment of the
Arbitrator, or within fifteen (15) days after the circumstances giving
rise to the challenge became known to that party.

Upon receipt of a challenge, PORAM shall notify the other

party/parties and the Arbitral Tribunal of the challenge. When an
Arbitrator has been challenged by one party, the other party may
agree to the challenge and if there is agreement, the Arbitrator shall
withdraw. The challenged Arbitrator may also withdraw in the
absence of such agreement. In neither case does this imply
acceptance of the validity of the grounds for the challenge.

If the other party does not agree to the challenge or the challenged
 Arbitrator does not withdraw, the Arbitral Tribunal, shall decide on
the merits of the challenge after the PORAM Secretariat has afforded
the opportunity for the parties to comment in writing within a
suitable period of time. Such Comments shall be communicated to
all parties including the Tribunal.

If a challenge before the Arbitral Tribunal is unsuccessful, the

aggrieved party may, within thirty (30) days after receiving notice of
the decision rejecting the challenge, apply to the High Court to
decide on the challenge. No appeal shall lie against the decision of
the Court.

While an application to the High Court in Malaysia is pending,

arbitral proceeding should not be stayed until the Court decides on
the challenge.
[Please refer to Section 2, Part IV(6)]

Statement of Claim Upon receipt of notice from PORAM on the appointment of the Sole
Arbitrator/ Panel of Arbitrators/Appeal Board, the Claimant shall,
within fourteen (14) calendar days, submit to PORAM a Statement of
Claim (SOC), along with a copy of the contract and the arbitration
agreement if not contained in the contract.
The SOC shall include the following:-
a) The names and addresses of the parties to the dispute,
b) In the event of a String Arbitration, the names and addresses of all
parties involved in the String Arbitration,
c) A statement of the facts supporting the claim,
d) The points at issue, and
e) The relief or remedy sought.

The Claimant may annex to their SOC all documents deemed

relevant or may add a reference to the documents or other evidence
they will submit.

The Claimant shall also indicate whether they require an oral

hearing. If an oral hearing is required they shall also submit a
provisional list of witnesses/experts they intend to call and a
summary of the evidence to be adduced from the testimony of such
witnesses/experts. The parties shall be given a notice of twenty one
(21) days upon receipt of notice by the parties.
[Please refer to Section 2, Part IV(1)]

Time Limit
If the Claimant failed to communicate their claim without showing
sufficient cause for such failure within the stipulated time, the Sole
Arbitrator/Panel of Arbitrators/ Appeal Board shall issue an order for
the termination of the arbitral proceedings.
[Please refer to Section 2, Part V1(1)]
 Statement of Defence The Respondent shall, within fourteen (14) calendar days of the
receipt from PORAM of the SOC, submit, in writing, their Statement
of Defence (SOD).

The Respondent may annex to their SOD the documents on which

they rely for their defence or may add a reference to the documents
or other evidence they will submit. In their SOD, the Respondent
may make a counter-claim arising out of the same contract or rely on
a claim arising out of the same contract for the purpose of a set-off.
The provisions relating to the information to be included in the
statement of claim shall also apply to such counter-claim, if any.

At the same time the Respondent shall indicate whether they require
an oral hearing. If an oral hearing is required, they shall also submit a
provisional list of witnesses/ experts they intend to call and a
summary of the evidence to be adduced from the testimony of such
witnesses/ experts.
[Please refer to Section 2, Part IV(2)]

Time Limit
If the Respondent failed to communicate their defence without
showing sufficient cause for such failure according to the stipulated
time, the Sole Arbitrator/Panel of Arbitrators/Appeal Board shall
order the proceedings to continue.
[Please refer to Section 2, Part VI(1)]

Reply to Defence Upon receipt of the SOD from the Respondent, PORAM shall forward
a copy to the Claimant immediately. The Claimant may, within seven
(7) calendar days of receipt of the SOD, submit a reply to PORAM.

If such a reply is received, PORAM shall forward a copy to the

Respondent who shall have another seven (7) calendar days from the
receipt of such reply to submit their own further reply, if any. If the
Respondent chooses to submit such further reply, a copy shall also
be forwarded by PORAM to the Claimant, but further submissions
shall be at the discretion of the Sole Arbitrator/Panel of
Arbitrators/Appeal Board.
[Please refer to Section 2, Part IV(3)]

Amendments to Pleadings During the course of the arbitral proceedings either party may
amend or supplement its Claim or Defence unless the Sole
Arbitrator/Panel of Arbitrators/ Appeal Board considers it
inappropriate to allow such amendment having regard to the delay
in making it or prejudice to the other party or any other
circumstances. However, a claim may not be amended in such a
manner that the amended claim falls outside the scope of the
arbitration clause of the contract or separate arbitration agreement,
as the case maybe.
 [Please refer to Section 2, Part IV(3)]

Hearing Proceedings The parties to the dispute shall not have present or be represented
by legal counsel at the hearing as the objective of these Rules is to
settle trade disputes by people who are in some ways directly
connected with the respective trades or related matters.
[Please refer to Section 2, Part V(1)]

Initiation of Arbitration Proceedings

The hearing of the arbitration shall be opened by the recording of
the oaths by the parties, witnesses/experts, and the recording of the
place, time and date of hearing, the presence of the Arbitrator(s),
the parties, witnesses and other persons, if any. If any
witnesses/experts are introduced at a later stage of the hearing their
oaths shall be recorded before their evidence is heard.
[Please refer to Section 2, Part V(2)]

The Claimant shall present their case and the Respondent shall
present their defence at times indicated by the Sole Arbitrator/Panel
of Arbitrators/Appeal Board. The witnesses/ experts may be
introduced by the parties, as they deem fit, with the permission of
the Sole Arbitrator or the Chairman of the meeting.
[Please refer to Section 2, Part V(3)]

Examination & Cross Examination

The Sole Arbitrator/Panel of Arbitrators/Appeal Board may examine
or cross examine the parties and any of their witnesses/experts at
any time during the proceedings.
[Please refer to Section 2, Part V(3)]

Evidence
The Sole Arbitrator/Panel of Arbitrators/Appeal Board may receive
and consider the evidence of witnesses/ experts by affidavit and may
give it such weight as they deem fit after considering any objections
made to its submission.
[Please refer to Section 2, Part V(4)]

The Sole Arbitrator/Panel of Arbitrators/ Appeal Board shall decide

what further written statements or other evidence shall be required
from the parties or may be presented by them and shall fix the
periods of time for communicating such information.
[Please refer to Section 2, Part V(5)]

Right to Terminate Arbitration Proceedings

The Claimant shall have the right to request for termination of the
arbitration proceedings at any time before the issuance of an Award
subject to the payment of such costs/fees as actually incurred up to
the date of notice of termination.
 [Please refer to Section 2, Part V(6)]

Interim Measures
At the request of any party, the Sole Arbitrator/Panel of
Arbitrators/Appeal Board may take any interim measures they deem
necessary in respect of the subject matter of the dispute including
measures for the conservation, preservation, detention and
inspection of the goods forming the subject matter of the dispute.
Such interim measures may be established in the form of an interim
Award. The Sole Arbitrator/Panel of Arbitrators/Appeal Board shall
be entitled to require security for the costs of such measures. A
request for interim measure by any party to a judicial authority shall
not be deemed incompatible with the agreement to arbitrate or as a
waiver of that agreement.
[Please refer to Section 2, Part V(7)]

The Sole Arbitrator/Panel of Arbitrators/ Appeal Board may, if they

consider it necessary owing to exceptional circumstances, decide on
their own or upon application of any party to conduct further
hearings at any time before the Award is made.
[Please refer to Section 2, Part V(8)]

String Contract Dispute

In the case of a dispute with regards to a String Contract, the String
Respondents may opt to attend the hearing and may make
submissions at the hearing.
[Please refer to Section 2, Part V(9)]

Time Limit
If one of the parties fails to appear at a hearing, without showing
sufficient cause for such failure, the Sole Arbitrator/Panel of
Arbitrators/ Appeal Board may proceed with the hearing and the
arbitration proceedings.
[Please refer to Section 2, Part VI(2)]

If one of the parties, duly requested to produce documentary

evidence, fails to do so within the established period of time,
without showing sufficient cause for such failure, the Sole
Arbitrator/Panel of Arbitrators/Appeal Board may make the Award
on the evidence before them.
[Please refer to Section 2, Part VI(2)]

Awards Decisions
In the case of arbitration or an appeal, any Award or other decision
shall be made by the majority of the Arbitrators or members of the
Appeal Board within sixty (60) calendar days of the closure of the
hearing or proceedings.
[Please refer to Section 4, Part I]
The award shall be made by the Chairman of the Panel of Arbitrators
or Appeal Board if no majority count can be reached.
[Please refer to Section 4, Part I]

Form and Effect of the Award

In addition to making a final written Award, the Arbitrator(s)/Appeal
Board shall be entitled to make interim, interlocutory, or partial
Awards.
[Please refer to Section 4, Part II(1)]

The Arbitrator(s)/Appeal Board shall state the reasons upon which

the Award is based unless the parties have agreed that no reasons
are to be given.
[Please refer to Section 4, Part II(2)]

An Award shall be signed by the Arbitrator(s)/Appeal Board and shall

contain the date on which and the place where the Award was
made. In the case of an Award by the Appeal Board, if one of the
members fails to sign, the Award shall state the reason for such
failure.
[Please refer to Section 4, Part II(3)]

Upon receipt of the Award PORAM shall, within seven (7) calendar
days, notify the parties of the availability of the Award and the
balance of costs/fees payable. The Award shall be released to the
parties only upon payment of the balance of costs / fees, if any.
[Please refer to Section 4, Part II(4)]

If neither parties takes up the Award within fourteen (14) calendar

days of being informed, PORAM shall call upon the
Claimant/Respondent or the Appellant/ Respondent, as the case may
be, to pay the balance of the costs / fees and take up the Award
within a further fourteen (14) calendar days of the date of such
notice.
[Please refer to Section 4, Part II(4)]

In the event of a String Award, the arbitration/appeal Award shall list

out the rights and liabilities of each party in the string as against
their immediate buyer/seller.
[Please refer to Section 4, Part II(6)]

Any Award made in the case of string arbitration shall, subject to the
right of appeal as provided in these Rules, be binding on all the
parties in the string and may be enforced by any party against their
immediate contracting party as though a separate Award had been
made under each contract.
[Please refer to Section 4, Part II(7)]
The Sole Arbitrator/Panel of Arbitrators/ Appeal Board may, at their
sole discretion, award interest either from the date of default or
from the date of the award or from any other date as they deem
appropriate.
[Please refer to Section 4, Part II(9)]

Applicable Law
The Malaysian Arbitration Act 2005 or any amendment or
reenactment thereof shall apply insofar as its provisions have not
been excluded by these Rules.
[Please refer to Section 4, Part III]

Settlement or Other Grounds for Termination

If before the Award is made the parties agree on a settlement of the
dispute, the Arbitrator(s)/Appeal Board shall either issue an order for
the termination of the arbitral proceedings or if requested by both
parties record the settlement in the form of an arbitral Award on
agreed terms. The Arbitrator(s)/Appeal Board is not obliged to give
reasons for such an Award.
[Please refer to Section 4, Part IV(1)]

If before the Award is made, the continuation of the arbitral

proceedings becomes unnecessary or impossible for any reason not
mentioned above, the Arbitrator(s)/ Appeal Board shall inform the
parties of their intention to issue an order for the termination of the
proceedings. The Arbitrator(s)/Appeal Board shall have the power to
issue such an order unless a party raises justifiable grounds for
objection.
[Please refer to Section 4, Part IV(2)]

Copies of the order for termination of the arbitral proceedings or of

the arbitral Award on agreed terms, signed by the Arbitrator(s)/
Appeal Board, shall be forwarded by PORAM to the parties in the
same manner as provided for Awards herein.
[Please refer to Section 4, Part IV(3)]

Interpretation/Correction/Additional Award
At any time before the enforcement of the Award in its entirety,
either party may, with notice to the other party, request that the
Arbitrator(s)/Appeal Board :
i) give an interpretation of specific contents of the Award, or
ii)correct the Award for errors in computation, clerical/typographical
errors or any other errors of a similar nature, or
iii) make an additional Award as to claims presented in the arbitral
proceedings but omitted from the Award.
[Please refer to Section 4, Part V(1)]

Such request for interpretation/ correction/ additional Award shall

 be received by PORAM within twenty eight (28) calendar days of the
date on which the Award was sent out by PORAM to the parties.
[Please refer to Section 4, Part V(2)]

Subject to availability of the Arbitrator(s)/ Appeal Board, such

interpretation/correction/ additional Award shall be made within
thirty (30) calendar days of the receipt of such request by PORAM.
[Please refer to Section 4, Part V(3)]

In the case of request for additional Award, if the

Arbitrator(s)/Appeal Board deem it necessary to call for additional
evidence or conduct further hearings, the additional Award shall be
made within thirty (30) calendar days of the receipt of such further
evidence or completion of additional hearings.
[Please refer to Section 4, Part V(3)]

The Arbitrator(s)/Appeal Board may, on their own initiative, make a

correction or an additional Award within twenty eight (28) calendar
days of the date on which the Award was sent out by PORAM to the
parties.
[Please refer to Section 4, Part V(4)]

Appeal for Award

In the case of an arbitration Award, the time for making an appeal
shall be extended to twenty eight (28) calendar days from the date
on which such interpretation / correction / additional Award was
sent out by PORAM to the parties.
[Please refer to Section 4, Part V(5)]

Finality and Enforceability of the Award

Subject to a right of appeal, the Award shall become final and
conclusive and shall be enforceable in the same manner as a
judgment or order of the same effect.
[Please refer to Section 4, Part VI]

Appeal Any party to an Award of arbitration shall have the right to submit a
request of appeal to PORAM (the “Appellant”).
[Please refer to Section 3, Part I(1)]

Such right to appeal can be exercised by the Appellant provided the

costs / fees of the arbitration shall have been paid to PORAM within
fourteen (14) calendar days from the date of the notice from PORAM
that the Award was available.
[Please refer to Section 3, Part I(2)]

Notice of Appeal
Notice of such appeal shall be received by PORAM within twenty
eight (28) calendar days from the date on which the Award was sent
out by PORAM to the parties.
[Please refer to Section 3, Part I(3)]

PORAM shall forward a copy of such notice of appeal to the

Respondent.
[Please refer to Section 3, Part I(4)]

In the event that notice of appeal cannot be filed within the time
limit stipulated, the Appellant may apply to PORAM, before the
expiry of the stipulated time limit, for an extension of the time limit.
Such extension may be granted at the absolute discretion of PORAM.
Such an extension shall not exceed a period of twenty eight (28)
calendar days from the expiry of the stipulated time limit.
[Please refer to Section 3, Part I(5)]

The date of receipt of the request for appeal and the relevant
deposits of costs /fees for appeal by PORAM shall be deemed to be
the date of the commencement of the appeal proceedings.The
request for appeal shall be in form Appendix I.
[Please refer to Section 3, Part I(6)]

Procedure for Appeal

The appeal shall be determined by an Appeal Board consisting of
three (3) members selected or appointed by PORAM to be drawn
from the List of Arbitrators maintained by PORAM. The
disqualifications, as applicable to Arbitrators, shall also apply to
members of the Appeal Board.
[Please refer to Section 3, Part II(1)]

The Appeal Board so selected shall elect one of its members to be

the Chairman of the Board.
[Please refer to Section 3, Part II(2)]

The procedure to be adopted for appeal proceedings shall be in

accordance with the procedure laid down in the PORAM Rules for
arbitration proceedings.
[Please refer to Section 3, Part II(3)]

An Appellant shall have the right to request for termination of the

appeal proceedings at any time before the issuance of an Award
subject to the payment of such costs / fees as may be awarded by
the Appeal Board as actually incurred up to the date of notice of
termination.
[Please refer to Section 3, Part II(4)]

In the event of an appeal against a string arbitration Award, the

appeal shall be conducted as between all the parties involved in the
arbitration.
[Please refer to Section 3, Part II(5)]