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Arbitration is a consensual dispute method.

It allows disputing parties to have a


neutral party, known as the arbitrator, to assist them in arriving at a solution. An
arbitration clause is commonly placed in contracts to eliminate the threat of court
action in the event of disputes. Such a clause normally outlines the terms of
arbitration and binds the parties to the final decision.

When two parties agree to arbitration, they agree to solve their problems without
courts or lawyers as resolving a dispute in court can be very expensive. Avoiding the
potential of paying such costs is one of the primary motives for inserting an
arbitration clause into a contract. Among other advantages are as follows:

• Lawyers are present to help.


• Arbitrators often work faster than a judge in deciding disputes.
• Appointments are scheduled with the arbitrator at the mutual convenience of
all concerned.
• Arbitration meetings tend to be less formal than court, so parties may feel
more comfortable and confident to speak.
• The parties is not subjected to the court calendar, decide when and how much
time the arbitrator spends on their case.

The final decision in arbitration is usually issued by the arbitrator who is appointed
based on his experience on the disputed area. His decision is final and enforceable.
A dissatisfied party generally cannot decide to take the matter to court if he is not
pleased with the outcome. This is because the arbitration clause usually binds both
parties to accept the arbitrator’s final decree.

The arbitration clause generally outlines most or all terms surrounding the arbitration
process. This should include which types of disputes will be handled in this way.
Many clauses state that all contractual issues are subject to arbitration.

Pursuant to the Arbitration clause particularly in clause 16.8 in the Lease Agreement
in respect of the Northam Hotel, Gurney Hotel and Gurney Podium, in any event of a
breach or disputes arising out of the contract executed by the parties, they are oblige
to submit their dispute for arbitration. Further, due to the fact that the contract is
governed under the Malaysian law, the parties or any party shall only file the Notice
to Arbitrate at the Kuala Lumpur Regional Centre for Arbitration (KLRCA) as they are
the only personnel that is recognized to process the arbitration proceeding.