Written by Goh Jia Ni
Malaysian arbitration law has historically featured a debate on the available routes for enforcing foreign arbitral awards, specifically, whether award creditors could opt for direct enforcement under the Malaysian Arbitration Act 2005 (‘the MAA’) or were required to pursue enforcement under the Reciprocal Enforcement of Judgments Act 1958 (‘the REJA’) framework after converting the award into a judgment abroad. The Federal Court’s landmark ruling in ING Bank NV & OW Bunker Far East (Singapore) Pte Ltd v Tumpuan Megah Development Sdn Bhd (Civil Appeal No 02(I)-19-06/2024(W)) on 13 August 2025 has provided a definitive resolution to this issue.
Summary Background of the Case
The dispute concerned unpaid sums owned under two bunker contracts. ING Bank NV and OW Bunker Far East (Singapore) Pte Ltd (‘the appellants’) commenced arbitration in London and obtained an award in their favour (‘the London Award’). Tumpuan Megah Development Sdn Bhd (‘the respondent’) participated under protest, arguing that there was an absence of arbitration agreement.
Instead of challenging the award, the respondent later initiated arbitration in Malaysia under the AIAC Arbitration Rules 2023 on the same issues. Meanwhile, the English High Court converted the London Award into a judgment under s 66 of the United Kingdom Arbitration Act 1996. The appellants then registered this English judgment in Malaysia under the REJA.
The respondent applied to revoke the registration and requested a trial to determine issues such as fraud and jurisdiction. The High Court dismissed this application, but the Court of Appeal reversed that decision and allowed the trial. Therefore, the appellants appealed to the Federal Court.
Key Issues Raised in Federal Court
The appeal raised several important questions:
- Can an award creditor choose to enforce an international arbitral award under REJA or MAA?
- Does the MAA override or displace the REJA as a later and more specific statute?
- Can Malaysian courts order a trial on issues like fraud that were already determined in arbitration?
- How extensive should judicial review be under REJA in such cases?
Federal Court’s Findings
The Federal Court reinstated the High Court’s decision and held the following:
Freedom to choose enforcement mechanism
Both REJA and MAA provide valid and independent routes for enforcement. REJA applies to judgments from reciprocating countries, that includes confirmation judgments of arbitral awards. On the other hand, MAA implements the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (‘the New York Convention’) framework. There is no conflict or implied repeal, so award creditors may choose either path.
MAA does not prevail over REJA
The Federal Court rejected the argument that s 8 of the MAA excludes REJA. Both statutes serve different purposes, and the Parliament has not indicated any intention to repeal or subordinate one to the other.
Not ‘judgment laundering’
Converting an arbitral award into a judgment in the seat jurisdiction and enforcing it in Malaysia under REJA is lawful and does not constitute judgment laundering. The court distinguished this from cases involving multiple intermediate judgments.
Scope of judicial review
Section 5 of the REJA challenge does not justify a full de novo hearing. Malaysian courts are not appellate courts for foreign arbitral awards. The allegations of fraud should be assessed on affidavit evidence, not through a new trial with witnesses. The Federal Court stressed a minimal curial intervention approach to uphold reciprocity, finality, and efficiency.
Significance of the Ruling
This ruling represents a significant advancement for cross-border dispute resolution in Malaysia. Not only it upholds party autonomy by affirming creditors’ right to select the most advantageous enforcement mechanism, but it also clarifies that the treaty-based framework of the MAA and the reciprocity-based system under REJA are concurrent and complementary regimes.
By confirming that both REJA and MAA remain operative and emphasising a limited review standard, the Federal Court underscores Malaysia’s dedication to a predictable and efficient framework for enforcing foreign arbitral awards and judgments.
Published on 8 September 2025