Where arbitrability becomes a question

(b) if the High Court finds that—

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the laws of Malaysia; or

[The 'in conflict with the public policy' is the main reason that a disputed contract may not be arbitrable. Hence, any contracts that have involvement of the public, such as when an arbitration on a patent or product line between two parties. Same with some employment contracts, that by awarding a case of employee's misfortune in work may thus prejudice another group of employees who suffer the same.

Read the abstract from another perspective below.

Arbitrability Special Issue

Arbitrability seeks to draw the boundaries between the public interest of the state in the resolution of certain disputes exclusively through the state courts, and the interest of parties anxious to resolve their differences privately through arbitration. In the course of recent years, many states have liberalized their attitude to arbitration and become more supportive of the parties' right to elect private dispute resolution, even where the public interest might appear to be compromised by the nature of the dispute. Perhaps the most striking example has been the landmark decision of the United States Supreme Court in Mitsubishi Motors Corp v. Soler Chrysler-Plymouth,1 holding for the first time that private anti-trust claims framed under the Sherman Act were properly arbitrable by a foreign arbitral tribunal, irrespective of the fact that the US antitrust rules were primarily aimed at the regulation of free trade and raised very clear issues of public interest for the US government..

Here, public interest is very much about awarded arbitration being disadvantageous to government policies at large. For example, buying off a competitor would be an acceptable outcome between dispute parties. It is an economic and strategic decision in the private capacity of the two parties in dispute. However, it can be viewed as a matter of public interest as lack of competition might be disadvantageous to consumers. Monopoly and lack of price competition would have bad implications on fair trade and this is the reason for anti-trust law in the U.S.

Another scenario that a dispute over a contract cannot be arbitrated is when the likelihood of parties to the contract not accepting the award of the arbitral tribunal. This is like there is no meeting of minds in the first place - the issue of intent.

For example, the dispute is so immense that one of the parties would want to see the other party being heavily punished. The rightful channel should be the court so as to punish the deterrent or correct the wrong by reverting the title of the property back to the owner by court order. Although the arbitral tribunal may decide on the award, it has no power to direct the change of title. In such case, the arbitration cannot achieve its optimal outcome.

Then again, if there is no meeting of the mind in the beginning, there would be no arbitration.

(It may not be right to say that a matter is not arbitrable because one of the parties may not accept the award. This is because when it comes to enforcement of the arbitration award it can be registered as a judgment to make use of the court enforcement machinery.)*

Thus, when the award is, e.g. to revert back title to the original owner, the party to the arbitration would take the award to High Court and thereafter direct the land office to do the necessary.]

Ref:

[x] Own account.