Signing of Memorandum of Understanding Between Labuan FSA And KLRCA
WELCOMING SPEECH
by
EN. AHMAD HIZZAD BAHARUDDIN
DIRECTOR-GENERAL, LABUAN FSA
3 OCTOBER 2013
ROYAL CHULAN HOTEL, KUALA LUMPUR
Yang Amat Arif Tun Ariffin Zakaria
Chief Justice of Malaysia,
Mr. Christopher Leong
President, Malaysian Bar Council,
Y. Bhg. Datuk Sundra Rajoo
Director, Kuala Lumpur Regional Centre for Arbitration,
Distinguished Guests,
Ladies and Gentlemen,
Assalamualaikum, Salam Sejahtera and Salam Satu Malaysia
A Very Good Morning
- It is our great pleasure to see all of you distinguished guests here today gathered for the occasion of the signing ceremony of the Memorandum of Understanding (MoU) between the Labuan Financial Services Authority and the Kuala Lumpur Regional Centre for Arbitration (KLRCA). We are indeed honoured to have the presence of Yang Amat Arif Tun Ariffin Zakaria, who have taken time off from his busy schedule to be with us here today for the signing ceremony. We are indeed very excited with this initiative with KLRCA, which will lay the foundation for collaborative and strategic partnership between both esteemed organisation to render mutually beneficial assistance, aimed at progressing the Labuan IBFC to the next level. We are certainly proud to have KLRCA, which is the first regional centre established by the Asian-African Legal Consultative Organization in Asia to provide institutional support as a neutral and independent centre for the conduct of domestic and international arbitration proceedings in the region to be our partner, to elevate the legal infrastructure offerings in Labuan IBFC.
- The sealing of the MoU today will mark our quests to strengthen Labuan IBFC by having multiplicity of efficient resolution mechanism for commercial disputes through the litigation processes, arbitration and other alternative dispute resolutions. This is indeed a critical component for the ecosystem to function and it is even more important today, as Labuan IBFC matures over the years. Labuan IBFC’s registered companies in September this year has breached the 10,000 mark indicating the continued growth and confidence in the strength of the centre. With 641 licensed and regulated entities comprising banks, insurance, trust companies, leasing, factoring, credit token, fund manager, securities licensees and public fund, the Labuan IBFC has seen growth induced through the combination of modern legal and regulatory framework and innovative business and wealth management tools and facilities. Worth noting is that more than 65 per cent of the entities operating out of Labuan originated from international origins. It is against this backdrop that it is envisaged that the KLRCA shall be the launch pad to serve the arbitration needs of the Labuan IBFC. Under this MOU, both parties will work together in several areas including research and development, exchange of information relating to alternative dispute resolutions, training development and publication to bring forth potential benefits to the Labuan IBFC’s business community.
Ladies and Gentlemen,
- As we enter the last quarter of 2013 with mixed signs of growth in the world’s economies, globalisation and intensification in regional trade and cross-border investment flows continue unabated, albeit in different directions. The intra regional trade in East Asia has expanded from an average of 44% of total trade in 1995, to 50% in 2010 (source BNM). Intra regional investment activities have also been on a rising trend. While we see the tapering of premium income growth for the insurance industry as of June 2013 from the same period last year, the assets growth for the Labuan banks remain steady with an increase of 8.5 per cent. With transactional volumes intra region becoming more intense, some facilitated through Labuan IBFC, commercial disputes would be an inevitable outcome, giving rise to the need of disputes settlement mechanisms.
- As a centre for international business and finance, enforcement effort and outreach would obviously extend across jurisdictional boundaries, thus, international arbitration would likely be an effective mechanism to resolve the disputes. The presence of KLRCA in the Labuan IBFC will offer international investors an avenue for dispute resolution which would provide the investors the confidence in its independence, neutrality, finality, and ease of award enforcement.
Ladies and Gentlemen,
- Moving forward, greater emphasis would be placed on enhancing the efficiency and the competitiveness of Labuan IBFC. Under the Financial Sector Blueprint, Labuan IBFC is expected to deepen the international linkages and business connectivity between the regional economies and business service providers. The IBFC would continue to attract more international and regional investors transacting global businesses though Labuan, opening the opportunities for the legal fraternity to capitalise on its business potential. In this regard, I urge the legal professionals present here today to act on the possibility of offering global legal services in Labuan IBFC. The events line up for today, would certainly pave the way for you to learn more about Labuan IBFC and its interesting propositions.
- In that regard, in conjunction with the signing of the MoU, Labuan FSA and KLRCA have also co-organised a seminar entitled “Arbitration - An Alternative Dispute Resolution for the Labuan International Business and Financial Centre (IBFC)”. The aim of the seminar is to create awareness and educate on the use of arbitration in commercial disputes in the Labuan IBFC. Our utmost appreciation to the distinguished speakers, Yang Amat Arif (YAA) Tun Ariffin Zakaria, Mr. Christopher Leong and Datuk Sundra Rajoo, who have availed themselves to be with us to share their vast knowledge and experience in various aspects of arbitration.
- I am sure you will have an engaging session with these eminent speakers and immensely benefit from the seminar today. On that note, I wish to conclude and to thank you again for your presence here today.
