Malaysia Enacts the Singapore Convention on Mediation: What Foreign Companies Should Do Before Act 881 Takes Effect

This article is a follow-up to an overall analysis we published before. You can find it here.

Malaysia has quietly given effect to the Singapore Convention on Mediation. The International Settlement Agreements Resulting from Mediation Act 2026 (Act 881) received Royal Assent on 16 May 2026 and was gazetted on 26 May 2026. It has attracted almost no coverage, yet for any foreign company that resolves cross-border commercial disputes through mediation and has a Malaysian counterparty, this is one of the more consequential legal developments of the year.

Here is what changes, what does not change yet, and what to do in the meantime.

What Act 881 actually does

Until now, a mediated settlement agreement had no dedicated enforcement mechanism in Malaysia. If the other side walked away from a deal reached at mediation, your only real option was to start fresh proceedings for breach of contract. Act 881 changes that. A party to a qualifying international settlement agreement can now apply to the Malaysian High Court to have it recorded as a court order, after which it is enforced in the same way as a judgment. Alternatively, the settlement agreement can simply be tendered as evidence in ongoing proceedings to show that a dispute has already been resolved.

This mirrors the enforcement model under the Singapore Convention itself: no re-litigation of the underlying dispute, and no need to convert the settlement into an arbitral award first.

The one detail almost everyone will miss

Act 881 is not yet in force. Section 1(2) leaves commencement to a notification by the Minister in the Gazette, and no date has been set. Malaysia has legislated the framework but has not switched it on. Any reporting suggesting Malaysia “now enforces” mediated settlements is, strictly, premature. That gap between enactment and commencement is also the window in which foreign companies should be getting their house in order, rather than the point at which they can rely on the Act in front of a Malaysian judge.

Who and what is covered

The Act applies to a settlement agreement that is in writing, resulted from mediation, and is international in nature, meaning the parties are based in different states, or the place of business, performance, and subject matter of the dispute are not all in the same state. It does not apply to consumer, family, inheritance, or employment disputes, and it does not apply to settlements already recorded as a court judgment or enforceable as an arbitral award, since those already have their own enforcement routes.

To enforce, or to rely on a settlement as evidence, a party must produce the original (or a certified copy) of the settlement agreement, together with some proof that it actually resulted from mediation: the mediator’s signature on the agreement, a separate certification from the mediator, or an attestation from the institution that administered the mediation. If the agreement is in a language other than Malay or English, a certified translation is also required.

The Malaysian High Court can refuse enforcement on a defined list of grounds, largely mirroring the Convention: incapacity, an agreement that is void, not binding, not final, or already performed, a serious and causative breach by the mediator of applicable standards, an undisclosed conflict of interest on the mediator’s part, or conflict with Malaysian public policy.

One point worth flagging, and worth double-checking before it is relied on

The Act, as drafted, does not restrict its own application to settlements where the parties specifically opted in. Both are reservations that the Singapore Convention allows contracting states to make. If that reading holds once Malaysia formally ratifies, Malaysia will have taken the broader, more business-friendly route rather than the narrower one some other states have chosen. We would confirm this against Malaysia’s instrument of ratification once deposited, since reservations are typically lodged at that stage rather than spelt out in the domestic Act, but it is a genuinely useful data point for anyone deciding where and how to structure a mediation clause with Malaysian exposure.

What to do now

If you have a mediated settlement with a Malaysian party already in hand, do not wait for commencement to get your documentation in order. Confirm you have proper evidence that mediation actually took place, in one of the three forms the Act recognises, and keep the original signed agreement accessible. If you are negotiating a new mediation clause for a contract with Malaysian exposure, it is now worth drafting settlement agreements with an eye to future enforceability in Malaysia: clear, final language, unambiguous obligations, and proper mediator or institutional attestation, rather than a loosely worded handshake memorandum.

Finally, track the commencement notification. Until the Minister gazettes a start date, the enforcement mechanism described above is not yet available, whatever the headlines say.

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Raja Nadhil Aqran is the Managing Partner of Aqran Vijandran in Kuala Lumpur, advising clients on commercial litigation, corporate advisory, ESG and compliance matters across Malaysia and the wider region.

Dr. Harald Sippel is an Austrian-qualified attorney (Rechtsanwalt) and Senior Foreign Advisor at Aqran Vijandran in Kuala Lumpur, supporting foreign companies – with particular depth in DACH-region and Korean client work – on Malaysian law matters across all practice areas.

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