AIAC Arbitration Rules 2026: Key Amendments

Written By Taner Dedezade

By Thayananthan Baskaran and Leezzie John


The Asian International Arbitration Centre (AIAC), the arbitration centre in Kuala Lumpur, administers the AIAC Arbitration Rules. Following the rebranding of the Kuala Lumpur Regional Centre for Arbitration (KLRCA) to the AIAC, editions of the AIAC Arbitration Rules were published in 2018, 2021, 2023 and, most recently, 2026.

This article considers the most recent amendments to the AIAC Arbitration Rules 2026, which came into force on 1 January 2026.

Amendments to the AIAC Arbitration Rules

The key revisions to the AIAC Arbitration Rules are summarised below.

Removal of the reference to the UNCITRAL Rules

Previous editions of the AIAC Arbitration Rules, including the 2018 and 2023 editions, provided for the AIAC Arbitration Rules as Part I and the UNCITRAL Arbitration Rules as Part II. To the extent that there was a conflict between the two, the provisions in Part I were to prevail.

The AIAC Arbitration Rules 2026 no longer include the UNCITRAL Arbitration Rules as Part II, but instead generally reflect them. This unified approach, previously adopted in the 2021 edition, contributes to a more readily navigable procedural framework, as parties no longer need to compare two parts of the rules to identify which provisions of the UNCITRAL Arbitration Rules have been amended by the AIAC Arbitration Rules.

Establishment of the AIAC Court of Arbitration

The AIAC Arbitration Rules 2026 provide for the new AIAC Court of Arbitration, with administrative functions defined and delineated between the President, the AIAC Court and the Registrar.

The AIAC Court of Arbitration is currently headed by the President. The AIAC Court also comprises 25 Malaysian and international specialists with expertise in alternative dispute resolution. This governance model has been adopted by other major arbitral institutions around the world, including the Singapore International Arbitration Centre (SIAC) and International Chambers of Commerce (ICC).

Under Rules 15 and 21, the President is the primary appointing authority for arbitrators, including appointments under the Fast Track Procedure and Emergency Arbitration.

The AIAC Court has discretion to allow, among other things, the consolidation of arbitrations under Rule 8.4, requests for additional parties to be joined to an arbitration under Rule 10.6, and arbitrator challenge requests under Rule 23.10. The AIAC Court is also tasked with the technical review of all forms of draft awards, except emergency awards, under Rule 42.

The Registrar is tasked with administrative functions, including the calculation of deposits under Rules 47.4 and 48.5, the exercise of discretion to extend time for the submission of draft awards for technical review under Rule 42.2, and the apportionment of arbitrators’ fees under clause 1.1(a) of Schedule 2 of the AIAC Arbitration Rules 2026.

This delineation of roles and functions strengthens institutional governance by moving away from the previous centralisation of power under the Director of the AIAC.

Increase in the pecuniary threshold for the Fast Track Procedure

Rule 7.1(b) increases the maximum pecuniary threshold for the Fast Track Procedure from USD300,000 to USD3 million for international arbitration, and from MYR1 million (approximately USD246,000) to MYR2 million (approximately USD492,000) for domestic arbitration.

The increase in the pecuniary threshold for the Fast Track Procedure reflects a global trend. The SIAC has increased the pecuniary threshold for its Expedited Procedure under Rule 14 of the SIAC Rules 2025 from SGD6 million (approximately USD4.7 million) to SGD10 million (approximately USD7.9 million), for any arbitration commenced after 1 January 2025.

The Hong Kong International Arbitration Centre (HKIAC) has also raised the pecuniary threshold for its Expedited Procedure under Article 42.1(a) of its 2024 Administered Arbitration Rules, from HKD25 million (approximately USD3.2 million) to HKD50 million (approximately USD6.4 million), for all cases submitted to HKIAC under its Administered Arbitration Rules from 1 January 2026.

Third-party funding

In tandem with the introduction of third-party funding under the Arbitration (Amendment) Act 2024, Rule 31 introduces a new provision dedicated to third-party funding.

This provision covers disclosure obligations. Under Rule 31.1, a funded party must disclose the existence of the third-party funding agreement and the identity of the third-party funder.

Rule 31.2 further specifies when such disclosure should be made:

  • Upon commencement of the arbitration, where the third-party funding agreement is made on or before commencement.

  • As soon as practicable after the conclusion of the third-party funding agreement, where the agreement is made after commencement.

Rule 31.3 also requires a funded party to notify the arbitral tribunal, the other parties and the AIAC of any change in circumstances relating to the third-party funding agreement, including termination, after the initial disclosure.

Further, Rule 31.4 provides that the arbitral tribunal may take into account the third-party funding agreement and the disclosure or non-disclosure of such funding when making an order or award, including when deciding on the apportionment of costs.

Third-party funding disclosure obligations have also been integrated as a procedural requirement for the following:

  • Notice of Arbitration under Rule 5.1(f);

  • Response to the Notice of Arbitration under Rule 6.1(d);

  • Consolidation Request under Rule 8.2(f);

  • Joinder Request under Rule 10.4(h); and

  • Emergency Arbitrator Request under Rule 12.4(h).

In addition, Rule 28.1(e) empowers the arbitral tribunal to make necessary enquiries into the existence of third-party funding arrangements and to order disclosure of the identity of any third-party funder and any change in circumstances throughout the arbitration.

These amendments complement and bolster the safeguards on third-party funding in Malaysia introduced by the amendments to the Arbitration Act 2005 that came into force on 1 January 2026.

Promotion of mediation during or after the commencement of arbitration

Rule 49 encourages parties to attempt mediation pursuant to the AIAC Mediation Rules, not only before the commencement of arbitration proceedings, but also during or after commencement.

Where parties attempt to settle their dispute amicably after the issuance of the notice of arbitration, Rule 49.1 provides that all subsequent steps in the arbitration shall be stayed pending the outcome of the mediation. Further, under Rule 49.2, the arbitral tribunal may, upon the parties’ request, suspend the arbitration for a specified period while the parties attempt to settle their dispute amicably pursuant to the AIAC Mediation Rules.

This amendment largely preserves the fundamentals of the Arb-Med, Arb-Med-Arb or Med-Arb models. Prior to this amendment, Rule 20 of the AIAC Arbitration Rules 2023 addressed only the scenario of mediation before the commencement of arbitration. This applied where the parties had referred their dispute to mediation under the AIAC Mediation Rules but failed to reach a settlement and/or the mediation had been terminated, and the parties subsequently decided to proceed to arbitration under the AIAC Arbitration Rules.

Enhanced efficiency and detailed procedures

The AIAC Arbitration Rules 2026 introduce further enhancements to increase procedural clarity and efficiency.

For instance, emergency arbitration procedures, previously contained in Schedule 3 of the AIAC Arbitration Rules 2023, are now formally integrated and expanded upon under Rules 12 to 14 of the AIAC Arbitration Rules 2026. There is now detailed guidance on when an Emergency Arbitrator Request may be filed and the documents required.

The provisions on summary determination have also been enhanced. Previously, Rule 11 of the AIAC Arbitration Rules 2023 did not prescribe a timeline for a decision. Under the AIAC Arbitration Rules 2026, Rule 9.3 expressly provides that a decision of the arbitral tribunal to allow a Summary Determination Request must be made within 45 days from the date of filing the request.

Further, Rule 53 introduces a formal waiver provision, whereby a party’s failure to object promptly to any non-compliance with the rules or a requirement of the arbitration agreement shall be deemed a waiver of the party’s right to do so, unless that failure was justified in the circumstances. Previously, no such waiver provision existed.

Mandatory technical review of awards

Rule 42 of the AIAC Arbitration Rules 2026 requires all forms of draft awards, except emergency awards, to undergo a technical review by the AIAC Court.

Previously, Rule 16(8) of the AIAC Arbitration Rules 2023 gave the Director of the AIAC discretion to waive the technical review of any award. Rule 42 of the AIAC Arbitration Rules 2026 no longer includes such a waiver provision, making technical review mandatory for all draft awards other than emergency awards.

Conclusion

The amendments to the AIAC Arbitration Rules that came into force in 2026 have introduced significant changes and enhanced the efficiency of arbitrations conducted under the institution.

Taner Dedezade