10th October 2025

INTRODUCTION

On 9 October 2025, the Asian International Arbitration Centre (“AIAC”) have launched the AIAC Suite of Rules 2026, an updated set of rules to their predecessors. This major update would introduce six new rules/guidelines, including the AIAC Arbitration Rules 2026 (“2026 Rules”).

It is important for industry players to note of these changes of which key points can be encapsulated into three main themes:

1.         Broadened scope and party obligations;

2.         Modifications in procedural requirements; and

3.         Revisions in arbitrator rules and tribunal powers

Disclosure: This update aims to cover key changes introduced in the new AIAC Arbitration Rules 2026 except for fees; it does not extensively cover all the changes made. Readers’ discretion advised.

IMPORTANT CHANGES

1) Third-Party Funding

(R. 5.1(f), R. 6.1(d), R. 31 of the 2026 Rules)

Disclosure of funding details is now mandatory. This aligns AIAC with global standards and upcoming Malaysian statutory recognition under the Arbitration (Amendment) Act 2024.

2) Mandatory Counterclaim in Response

(R. 6.1(c) of the 2026 Rules)

The “may” to “shall” shift makes it compulsory for respondents to introduce their counterclaims at the outset, reducing fragmented proceedings.

3) Emergency and Summary Procedures

(R. 9–14 of the 2026 Rules)

The codification of emergency arbitration and summary determination mechanisms empowers tribunals to act swiftly on urgent matters or dispose of clearly unmeritorious claims.

4) Extended Grounds for Arbitrator Challenge and Removal

(R. 23–25 of the 2026 Rules)

Parties now have explicit recourse for non-performance or inability to act, with AIAC empowered to remove arbitrators under exceptional circumstances.

5) Adoption of UNCITRAL Principles within Unified Framework

The removal of the separate UNCITRAL Part and its integration within AIAC’s main rules results in a more cohesive Malaysian-centred framework consistent with international arbitration norms.

6) Implied Waiver

(R. 53 of the 2026 Rules)

Under the new regime, parties will lose their right to object against any non-compliance to arbitration rules and terms of arbitration agreement if they don’t promptly object the non-compliance.

NOTABLE CHANGES

1) Integration of UNCITRAL Principles

One key observation is that the previous AIAC Arbitration Rules 2023 (“2023 Rules”) contains a Part II which introduces UNCITRAL Arbitration Rules (“UNCITRAL Rules”) into the previous regime. In the latest update, the chapter is no more.

Nonetheless the underlying essence of UNCITRAL Rules remains intact, assimilated and embedded into the new and expanded AIAC Arbitration Rules 2026.

Instead of maintaining two distinct parts, the 2026 Rules incorporate the key principles of the UNCITRAL Arbitration Rules directly into the AIAC framework. This integration simplifies reference, ensures consistency, and creates a unified set of rules tailored for both domestic and international arbitrations administered by the AIAC.

2) Greater Party Responsibilities

The new regime increases parties’ procedural obligations from the outset. Parties must now specify the applicable law and procedural rules in their initial submissions, and respondents are required to include any counterclaim in their response. The Rules also impose a mandatory duty to disclose any third-party funding arrangements, promoting transparency and preventing potential conflicts of interest.

Additionally, parties who fail to raise procedural objections promptly will be deemed to have waived their right to do so later, a move that encourages diligence and procedural discipline.

3) Enhanced Framework for Arbitrator Appointment and Challenge

The process for appointing, challenging, and replacing arbitrators has been significantly expanded. AIAC must now consider a broader range of factors when making appointments, reflecting the importance of impartiality, independence, and availability.

The grounds for challenging an arbitrator have also been widened to include non-performance or impossibility to act, ensuring that arbitrators remain effective and responsive throughout proceedings. AIAC now has express authority to remove an arbitrator under exceptional circumstances after consultation with the parties, further reinforcing institutional oversight.

4) Procedural Innovation and Efficiency

The 2026 Rules introduce several mechanisms aimed at improving efficiency. Fast-track arbitration procedures are now more detailed and accessible, and a new summary determination process allows clearly unmeritorious claims or defences to be disposed of early.

Emergency arbitration is formally incorporated, providing parties with an expedited avenue to seek urgent relief before the full tribunal is constituted. Procedures on interim measures, joinder of parties, and multi-party appointments have also been substantially clarified.

The Rules also embrace flexibility in dispute resolution through the formal introduction of amicable settlement mechanisms such as Arb-Med, Arb-Med-Arb, and Med-Arb processes.

5) Strengthened Institutional Role and Clarity in Awards

There is now an express provision where AIAC decisions made in the course of administering an arbitration are binding, and the institution may choose not to provide reasons unless required by a court order. This reinforces the AIAC’s administrative authority and efficiency.

The provisions governing awards have been detailed to cover correction, interpretation, and additional awards, consistent with the UNCITRAL model and section 35 of the Arbitration Act 2005. Similarly, some of Arbitration Act 2005’s provision in Chapter 6 is also adopted In the current regime where Tribunals may also terminate proceedings early if the matter has been settled or if continuation becomes unnecessary or impossible.

SUMMARY OF KEY CHANGES