Introduction
The enforcement of foreign arbitral awards in Malaysia has long raised questions about the appropriate mode of enforcement, whether the award should be enforced under the Reciprocal Enforcement of Judgments Act 1958 (REJA) or the Arbitration Act 2005? The Federal Court in the landmark case of ING Bank NV and OW Bunker Far East (Singapore) Pte Ltd v Tumpuan Megah Development Sdn Bhd [2025] has now provided crucial guidance on this issue.
Background of the Case
The dispute began when the Appellants, ING Bank NV and OW Bunker Far East (Singapore) Pte Ltd secured an arbitral award from London Maritime Arbitrators Association against the Respondent, Tumpuan Megah Development. The Appellants registered the award in the English High Court under Section 66 of the UK Arbitration Act 1996, thereby converting it into a confirmation judgment of the English court. They then sought to enforce this confirmation judgment in Malaysia under Section 4 of Reciprocal Enforcement of Judgements Act 1958 (REJA). The Respondent contended the enforcement, arguing that REJA was not the appropriate mechanism for enforcement since Malaysia’s Arbitration Act 2005, particularly Section 38, provides the specific regime for enforcement of foreign awards.
Court Decisions
- High Court: Allowed the enforcement under REJA, reasoning that since the award had been registered as an English judgment, it could be enforced as a judgment in Malaysia.
- Court of Appeal: Reversed the High Court, holding that the proper route was the Arbitration Act 2005, as it is the specific statute governing arbitration. The Court relied on Section 8 of Arbitration Act 2005, which limits court intervention in arbitration matters, and emphasized Malaysia’s commitments under the New York Convention and the UNCITRAL Model Law.
- Federal Court: Overturned Court of Appeal decision. It held unanimously that Section 8 of Arbitration Act 2005 does not displace REJA. Where an arbitral award has been converted into a judgment in the foreign jurisdiction, it qualifies as a “judgment” under Section 2 of REJA, and may be enforced through REJA in Malaysia. However, if the arbitral award has not been registered abroad, enforcement must be sought under Section 38 of Arbitration Act 2005.
In clarifying the concurrent application of the two statutes, the Federal Court expressly stated that:
“143. Put simply, a confirmation judgment premised on an arbitral award is a judgment and is, to that extent, expressly recognised and enforceable under REJA, while an arbitral award per se is recognised and enforceable under the MAA. Section 8 cannot expand its reach to encroach on REJA. Any such interpretation is unsound, as the express words of section 8 itself are limited to the MAA (see Far East Holdings Bhd & Anor v Majlis Ugama Islam Dan Adat Resam [2018] 1 CLJ 693 (FC)).”
Key Legal Provisions
- Section 2 REJA: Defines “judgment” to include arbitral awards enforceable as judgments in their place of origin.
- Section 4 REJA: Allows registration of a foreign judgment in Malaysia within six years of its issuance.
- Section 38 of Arbitration Act 2005: Provides the procedure for recognition and enforcement of both domestic and foreign arbitral awards in Malaysia.
Practical Implications
- Dual Pathways for Enforcement
- If an arbitral award is first converted into a judgment at the seat of arbitration, it may be enforced in Malaysia under REJA.
- If the award remains unregistered, it must be enforced directly under Section 38 of Arbitration Act 2005.
- No Ouster of REJA by the Arbitration Act
The Federal Court clarified that the AA 2005, while lex specialis for arbitration, does not oust the operation of REJA in cases involving confirmation judgments. - Consistency with International Obligations
This interpretation aligns Malaysia’s position with the New York Convention framework while preserving the utility of REJA in certain circumstances.
Conclusion
The Federal Court’s decision in ING Bank v Tumpuan Megah Development settles a long-debated issue. It confirms that enforcement of foreign arbitral awards in Malaysia depends on whether the award has already been recognized as a judgment abroad. This dual-track approach provides clarity for award creditors and aligns Malaysia with international practice, balancing statutory coherence under the Arbitration Act with reciprocity under REJA.
Bibliography
[1] Reciprocal Enforcement of Judgments Act 1958
[2] Arbitration Act 2005
[3] ING Bank NV and OW Bunker Far East (Singapore) Pte Ltd v Tumpuan Megah
Development Sdn Bhd [2025] (Civil Appeal No. 02(i)-19-06/2024(W))
[4] Section 66, Arbitration Act 1996
[5] Section 4, Reciprocal Enforcement of Judgements Act 1958
[6] Section 38, Arbitration Act 2005
[7] Section 8, Arbitration Act 2005
[8] Section 2, Reciprocal Enforcement of Judgements Act 1958
[9] Para [143], ING Bank NV and OW Bunker Far East (Singapore) Pte Ltd v Tumpuan Megah Development Sdn Bhd [2025]
Pravin is a contributor covering legal insights with a focus on making sense of Malaysia’s evolving legal and regulatory landscape through practical and accessible analysis. More about Pravin.
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