Lombard Commodities Ltd v Alami Vegetable Oil Products Sdn Bhd1CLJ137 [2010]

In Lombard Commodities Ltd v Alami Vegetable Oil Products Sdn Bhd the Federal Court was faced with request for the enforcement of an arbitral award emanating from the United Kingdom. The Federal Court took this opportunity to set out in clearly defined terms that a Gazette notification pursuant to Section 2(2) of the Foreign Arbitral Awards Convention Act declaring the United Kingdom to be a party to the New York Convention was not a condition precedent to an award being regarded as a convention award under the act. The Federal Court held that the use of the word ‘may‘ in Section 2(2) of the Foreign Arbitral Awards Convention Act simply confers a power, without a corresponding obligation to exercise this power. The provision in Section 2(2) was held to be evidential in effect and could not be regarded as a pre-condition to the enforcement of an award. It was primarily designed to dispense with the need to prove that a state is a convention state. Further, there was nothing to preclude the adducement of such other evidence as appropriate to establish a state as a convention state.

The concerns of the international community with respect to the enforceability of arbitral awards in Malaysia under the Foreign Arbitral Awards Convention Act have been allayed by the Federal Court’s clear statement.

See also Court of Appeal ruling