Prior to 1986, the avenues open to the trade for the settlement of their disputes have been:

i. Arbitration under the FOSFA International Rules for Arbitration and Appeal;

ii. Arbitration under the Arbitration Act of Malaysia (1952) Revised 1972;

iii. Legal Proceedings – litigation

The PORAM Rules of Arbitration and Appeal, which took effect from 1st January 1986, is an alternative to the above. At that particular time, it is specially designed in conformity with the Arbitration Act of Malaysia (1952) Revised 1972 and intended for the exclusive application by the palm oil trade in general.

When the PORAM Rules of Arbitration and Appeal were drawn up in the early 1980s, due recognition was given to the various existing similar machinery for arbitration in other trades and arbitration in general. A considerably long time has been taken to formulate these rules. This was necessary in order to ensure that the objective of the Rules i.e. to provide a mechanism for fair, expeditious and relatively inexpensive settlement of trade disputes is achieved.

On 30th December 2005, Malaysia enacted a new Arbitration Act 2005 (Act 646) based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration. The new Act repeals and replaces the previous Arbitration Act 1952 and the New York Convention enacted by Act 320 which dealt with the recognition and enforcement of international awards. Since then, an extensive review exercise was conducted on the PORAM Rules of Arbitration and Appeal, which took into effect from 1st January 2012.

The Rules of Arbitration and Appeal are shown below:


Section 1 Organization and Administration
Section 2 Rules of Arbitration
Section 3 Appeal
Section 4 Awards
Section 5 Arbitration Rules Execution Committee
Section 6 Exclusion of Liability
Appendix I Request for Arbitration / Appeal
Appendix IA Request for String Arbitration / Appeal
Appendix II Acceptance Form
Appendix III Schedule of Costs Fees of Arbitration / Appeal
Appendix IV Ad Hoc Arbitration
Appendix V Nomination Form
Appendix VI PORAM List of Arbitrators
Appendix VII Endorsement

The printed copy of the Rules of Arbitration and Appeal can be ordered from PORAM. Please click here to order the PORAM Handbook 8th Edition.