In October 2019, following remarks by then Prime Minister Tun Dr Mahathir Mohamad on India's position in Kashmir, Indian palm oil importers effectively suspended purchases from Malaysia.^[1] No formal import restriction was ever notified. No consultations were requested under the Malaysia-India Comprehensive Economic Cooperation Agreement. No complaint was filed at the WTO; indeed, Malaysia's own government made clear it did not intend to raise the matter there. Malaysian export volumes to India, which had stood at 4.4 million tonnes the previous year, fell to under a million tonnes within months, and Indian refiners turned to Indonesian supply at a premium.^[2] The loss fell entirely on private traders, refiners and exporters on both sides of the Straits of Malacca, none of whom had standing to invoke any instrument governing the corridor, because none of the instruments governing the corridor were built with them in mind.

That episode is worth more than a footnote in the history of India-Malaysia trade friction. It is a structural diagnosis. This note argues that the Malaysia-India trade corridor, notwithstanding a comparatively sophisticated treaty architecture, still lacks a dispute resolution mechanism accessible to the range of participants who actually generate its commercial traffic, and that the institutional resources required to close that gap already exist in Kuala Lumpur. Drawing on a federated corridor-ADR architecture this author has proposed for the India-Australia trade relationship, which suffers from a closely related structural weakness,^[3] this note sets out why the Malaysia-India corridor is, if anything, better positioned to adopt such a mechanism, and why the present moment offers a limited window in which to do so.

II. MICECA's Bifurcated Architecture

The Malaysia-India Comprehensive Economic Cooperation Agreement, in force since July 2011,^[4] is a materially deeper instrument than several of India's more recent trade agreements. It covers trade in goods, trade in services, investment, and movement of natural persons, and the two governments are presently engaged in renegotiating it to widen that coverage further. Unlike the India-Australia Economic Cooperation and Trade Agreement or the recently concluded Indo-Oman Comprehensive Economic Partnership Agreement, both of which confine dispute settlement to a state-to-state chapter,^[5] MICECA's Investment Chapter extends to investor-to-state dispute settlement: a qualifying investor may bring a claim directly against the host state, without depending on diplomatic espousal by its home government.^[6]

This is a genuine structural advantage, and any comparative account of the corridor's architecture ought to say so plainly. But it is also narrower than it appears at first blush. Investor-to-state dispute settlement (ISDS), by definition, is available only to a treaty-qualifying investor asserting a treaty-defined right against a state. There is also a provision for state-to-state consultation and panel provisions, modelled loosely on the WTO Dispute Settlement Understanding; as with nearly every comparable chapter in India's trade agreements, practically unused. Neither has anything to offer a considerably larger population of corridor participants: the exporter whose cargo is rejected on a technicality, the subcontractor on an infrastructure project left unpaid by the principal contractor, the pharmaceutical distributor caught between divergent regulatory findings, or the accountant or Ayurvedic practitioner moving between the two jurisdictions under MICECA's professional mobility schedules has no ready forum to turn to. Access to justice — which comprehends commercial justice — is an obligation of the state^[7] and in India it is an enforceable constitutional obligation^[8].

Trade disputes between states carry diplomatic costs that neither government wishes to bear over a commercial disagreement, and so the mechanism sits idle while the underlying disputes are absorbed, informally and unevenly, by the private parties who happen to be holding the loss when the music stops. The 2019 palm oil episode is simply the clearest instance of a structural default that the corridor's architecture makes close to inevitable.

III. A Narrowing Window: The Sunset of the 1995 BIT

A second, less visible development sharpens the urgency of the argument. Malaysia and India concluded a bilateral investment treaty in 1995 that supplied a route to arbitration independent of MICECA's investment chapter altogether. India terminated that treaty with effect from 23 March 2017, as part of a wider programme under which it terminated or allowed to lapse investment treaties with some seventy-seven counterparties.^[9] The termination carries the conventional ten-year survival clause, under which investments made before termination continue to enjoy the treaty's protection.^[10] That clause expires in March 2027. From that date, absent a negotiated replacement, MICECA's own investment chapter becomes the sole surviving treaty-based protection available to Malaysian and Indian investors in each other's territory, and, as already noted, that protection does not extend to the great majority of the corridor's participants in any event. The corridor's one meaningful safety net for larger capital is narrowing at precisely the moment both governments have signalled an intention to deepen the relationship considerably, whether through the current renegotiation or through Malaysia's expanding position in semiconductor manufacturing, critical mineral processing and broader supply chain diversification.

IV. Institutional Readiness: The Asian International Arbitration Centre

The absence of a corridor-wide mechanism is not attributable to any want of institutional capacity on the Malaysian side. The Asian International Arbitration Centre, established in 1978 as the first of the regional arbitration centres constituted under the Asian-African Legal Consultative Organisation, is the oldest institution of its kind in Asia, and has spent the past two years undergoing what its own reporting to AALCO describes as its most significant reform programme since inception.^[11] A Supplementary Agreement between the Government of Malaysia and AALCO, formalised on 20 February 2024, led to the constitution of a Protem Committee tasked with designing an inaugural AIAC Court of Arbitration, whose members were formally appointed in February 2026, alongside a comprehensively revised suite of arbitration, mediation and i-Arbitration rules.^[12]

AIAC's own report to AALCO's Sixty-Third Annual Session records 709 registered cases in the financial year August 2024 to June 2025, drawn against a panel of 2,928 accredited mediators, arbitrators and adjudicators, sixty-one per cent of whom are international appointees.^[13] Its caseload remains dominated by the construction, infrastructure and shareholder disputes that would be expected of a trade relationship of this profile. Two further institutional facts bear directly on the proposal advanced here. First, AIAC's Mediation Rules were revised in 2018 specifically to extend coverage to disputes involving states and state entities, not merely private commercial parties, which is the precise precedent on which a corridor-wide extension could be built without any need to reinvent the mechanism from scratch.^[14] Second, the AALCO Annual Arbitration Forum, co-hosted by AIAC in Kuala Lumpur in February 2025, devoted its opening day specifically to investor-state dispute settlement and multi-tiered dispute resolution clauses.^[15] The institution best placed to administer a Malaysia-India corridor mechanism has, in other words, already identified the design question this note addresses as one worth its own programming time.

Similarly on the Indian side, there is no dearth of institutions, viz. Mumbai Centre for International Arbitration (MCIA)^[16] in Mumbai (with offices in Delhi and Bengaluru also), India International Arbitration Centre (IIAC) and Delhi International Arbitration Centre (DIAC) in Delhi, International Arbitration & Mediation Centre (IAMC) in Hyderabad, and the Nani Palkhivala Arbitration Centre (NPAC)^[17] in Chennai. MCIA's own 2025 Annual Report records 61 new case filings, a 79.5% increase on 34 in 2024, with the majority arising organically from contracts that had already incorporated MCIA arbitration clauses — a healthy sign of institutional trust rather than one-off referrals. Roughly 18% of matters involve international parties, with China, Germany and the British Virgin Islands among recent counterparties. Further there is an emphasis on democratization: one in every three arbitrators appointed by MCIA is a woman. MCIA signed a partnership with Jus Mundi during its fifth annual India ADR Week (in mid-September 2025, over 750 participants across Mumbai, Delhi and Bengaluru) to publish selected redacted awards — a transparency step that AIAC is yet to match. MCIA also released its third-edition Arbitration Rules in 2025, expanded from 36 to 49 provisions, introducing joinder of parties, early dismissal, summary determination and third-party funding provisions.^[18]

DIAC is an institution – older than the IIAC – court-annexed rather than a national statutory creation, and, on the single figure located, dramatically higher-volume. Established in 2009 as the Delhi High Court Arbitration Centre under then Chief Justice Ajit Prakash Shah and since renamed DIAC,^[19] it operates as an arbitral institution annexed to the Delhi High Court. A 2025 practitioner survey of the Indian institutional-arbitration landscape (Law.Asia) records that DIAC handled approximately 8,000 cases in 2023^[20] — a figure more than eleven times AIAC's most recent annual caseload of 709. And then there is the Delhi Mediation Centre (DMC)^[21] in the Delhi High Court Campus but with Six Mediation Centers are functioning in Delhi District Courts at Tis Hazari, Karkardooma, Rohini, Dwarka, Saket and Patiala House Courts Complex.

Such statistics are unavailable for IIAC and IAMC, but both the institutions are mandated to collaborate with other national and international ADR institutions, and training practitioners in alternative dispute resolution, placing particular emphasis on Mediation. In November 2025, IAMC hosted both an internal reflection session on the centre's expanding role and a panel at the Dubai World Trade Centre on 'Building Trust in ADR Institutions: Ensuring Finality in Arbitration Outcomes'^[22] — evidence of the same kind of outward-facing institutional confidence AIAC's own AALCO Forum programming demonstrates. The Centre focuses on specialized training programs, community-focused frameworks, and digital adoption. Key initiatives include professional certification courses, digital future training, and grassroots community outreach.

The Madras High Court formally recognized NPAC in Chennai by order dated 21.9.2005 by designating it “as an institution under sec 11 (b) of the Arbitration and Conciliation Act,1996.^[23] The NPAC regularly hosts training programmes for young lawyers and holds international seminars, though there is no published data as to the number and nature of Arbitrations and Mediations that take place in the Centre. They publish bimonthly newsletters with important legal developments relating to ADR, including important judgments.^[24]

So institutional preparedness is wanting in neither jurisdiction. And enlarging the dispute-resolution provisions to all participants in the Corridor, enlisting the AIAC and any of the Indian institutions to service the Corridor, would not only lead to substantive commercial justice which would improve trade outcomes in the corridor. More importantly it would lead to widening of the capabilities of existing ADR institutions, particularly in India and deeper involvement of native Arbitrators and lawyers in international ADR, weakening the practice oligarchies entrenched in International ADR circuit — it has been documented that International ADR has been the preserve of 'pale, male and stale' lawyers from the Global North.^[25]

V. A Federated, Tiered Corridor-ADR Architecture

The architecture proposed for the India-Australia corridor rests on the proposition that the appropriate unit of institutional design is neither the multilateral trading system nor the individual bilateral treaty, but the trade corridor itself: a sectorally concentrated, jurisdictionally intersecting relationship carried by a comparatively small and repeatedly identifiable community of commercial actors.^[26] That description applies to the Malaysia-India relationship with very little modification. The corridor concentrates in palm oil and agri-commodities, construction and infrastructure, pharmaceuticals, and the professional and services mobility created by MICECA's own schedules; its participants, from state-owned enterprises to mid-sized exporters to individual professionals, meet each other repeatedly across a small number of contracts, regulators and disputes.

The architecture proposed for that structure requires no new institution and no treaty renegotiation. It asks existing bodies, principally AIAC on the Malaysian side and India's own arbitration and mediation centres, to be joined by memorandum into a federation administering a common procedural rulebook and a shared roster of sectoral experts, organised by sector rather than nationality or seniority. Mediation is the default first tier, arbitration the fallback where mediation does not resolve the dispute, and collaborative lawyering, in which counsel on both sides commit contractually to a settlement-only process and to withdraw should the matter proceed to a contested forum, is offered as a third, optional route suited to relationships the parties wish to preserve.

Enforcement is intended to run through the 2019 Singapore Convention on Mediation, which both India and Malaysia have signed but not yet ratified; the two states are, in this respect, in an identical position, which ought to make joint advocacy for ratification a natural point of cooperation rather than a point of asymmetry between them.^[27] Where the convention's coverage is not yet available, the Arb-Med-Arb structure offers an interim route to New York Convention enforcement, and provisions in both countries' domestic arbitration statutes recognising settlements as consent awards supply a further fallback.^[28]

Two design features merit particular emphasis. The first is federation rather than centralisation: the proposal explicitly follows the model of the WIPO Arbitration and Mediation Centre and the Court of Arbitration for Sport, both of which have operated for decades as networked, sector-specific institutions without a single central secretariat, and both of which have proved considerably more durable than attempts to build unified dispute settlement bodies from scratch.^[29] The second is that this is not merely a state-facing proposal. AIAC's own 2018 extension of its Mediation Rules to investor-State and State-entity disputes, and similar rules of the MCIA, DMC and IAMC show that the relevant institutions have already accepted that a mediation mechanism can serve private commercial parties effectively, particularly in money recovery and intellectual property issues; what remains is the further, and in principle smaller, step of ensuring the mechanism also reaches the ordinary trader, subcontractor and mobile professional who make up the bulk of the trade corridor's actual volume, and who presently fall outside every tier of the existing architecture. There can also be Dispute Avoidance/Settlement Boards for long-term and infrastructural projects along the FIDIC Model.^[30] They are vital for early dispute resolution, maintaining project momentum, and saving costs.^[31] They provide real-time expert decisions, prevent small disagreements from turning into massive legal fights, and act as a mandatory step before formal arbitration. And training for select lawyers in both jurisdictions in collaborative lawyering, which would also help in diluting the practice oligarchies that dominate international ADR.

VI. Conclusion

The current renegotiation of MICECA offers a limited and genuinely rare opportunity: a live treaty text, already open for amendment, into which a corridor mediation annex could be inserted without disturbing settled chapters or requiring wholesale renegotiation. The alternative is not the absence of disputes. It is their continued resolution, if at all, through channels that were never designed for the purpose: informal diplomatic pressure absorbed by private traders, as in 2019; generalist arbitration clauses drafted years before any dispute arose and indifferent to the corridor's sectoral texture; or, more often, no resolution at all. AIAC has spent the past two years building precisely the institutional capacity a corridor mechanism would require, and so have the Indian ADR institutions named above. The Malaysia-India relationship has, in the current renegotiation, precisely the political opening such a mechanism would need. What remains is the comparatively modest work of connecting the two, before the 2027 sunset of the 1995 investment treaty narrows the corridor's protective architecture further, and before the growth both governments say they want arrives at a dispute resolution system still built for a smaller and quieter trading relationship than the one now taking shape.

End Notes & References:

1. Reuters, 'Exclusive: India urges boycott of Malaysian palm oil after diplomatic row' (2019); Malay Mail, 'Malaysia won't report Indian palm oil boycott to WTO “at the moment”' (22 October 2019). ↑

2. Malaysian Palm Oil Board trade data, cited in contemporaneous reporting; see also Malay Mail, 'Malaysia to escalate EU palm oil dispute at WTO' (28 May 2021), for the contrasting case of Malaysia's willingness to litigate against a non-corridor trading partner. ↑

3. P.V.S. Giridhar, 'From Spaghetti Bowl to Settlement Table: A Federated Corridor-ADR Architecture for India-Australia Preferential Trade Networks' (Working Paper, 12 July 2026). ↑

4. Malaysia-India Comprehensive Economic Cooperation Agreement (MICECA), signed 18 February 2011, in force 1 July 2011. ↑

5. India-Australia Economic Cooperation and Trade Agreement (ECTA), signed 2 April 2022; Indo-Oman Comprehensive Economic Partnership Agreement (CEPA) (2025). See P.V.S. Giridhar, 'ECTA Has A Dispute Architecture Problem. CECA Should Fix It', LiveLaw (4 June 2026); and 'Processus Conveniens for Indo-Oman CEPA Corridor', LiveLaw (12 June 2026). ↑

6. High Commission of India, Kuala Lumpur, Commercial Wing, guidance on MICECA's Investment Chapter. ↑

7. Malaysian constitutional scholars usually invoke Art 5 (right to life and personal liberty) and Art 8 (right to equality before law) of the Federal Constitution to claim the right and cite Danaharta Urus Sdn Bhd v Kekatong Sdn Bhd (Bar Council Malaysia, intervener) [2004] 2 MLJ 257; see Challenges And Prospects On Access To Justice In Malaysia, Associate Professor Dr Faridah Jalil Faculty of Law, Universiti Kebangsaan, Malaysia. ↑

8. Art.14 (equality before law and equal protection of the laws), Art.21 (right to life) and Art.39A (right to equal justice); The Supreme Court held as follows in: Anita Kushwaha v Pushap Sudan (2016) 8 SCC 509:

   “We have; therefore, no hesitation in holding that access to justice is indeed a facet of right to life guaranteed under Article 21 of the Constitution. The Citizen's inability to access courts or any other adjudicatory mechanism provided for determination of rights and obligations is bound to result in denial of the guarantee contained in Article 14 both in relation to equality before law as well as equal protection of laws.” ↑

9. Agreement between the Government of Malaysia and the Government of the Republic of India for the Promotion and Protection of Investments (1995); terminated by India with effect from 23 March 2017. See Lexology, 'Investment Treaty Arbitration in Malaysia'; UNCTAD Investment Policy Hub, India-Malaysia BIT (1995) entry. ↑

10. Global Arbitration Review, 'Investment Treaty Arbitration: India' know-how chapter (77 BITs terminated 2016–2024, typically with 10–15 year survival clauses). ↑

11. AALCO, 'Report on the AALCO's Regional Arbitration Centres' (RAC Brief 1), 63rd Annual Session, Kampala, 27 August 2025, document AALCO/63/KAMPALA/2025/ORG 3, Section II. ↑

12. Ibid. See also Malay Mail, 'Azalina: Establishment of Asian Arbitration Court in Malaysia strengthens global standing' (28 February 2026). ↑

13. AALCO, RAC Brief 1 (n 11). ↑

14. AIAC Mediation Rules 2018; AIAC, 'Mediation' page, aiac.world. ↑

15. AALCO Annual Arbitration Forum 2025, Kuala Lumpur, 20–21 February 2025, co-hosted by AIAC. ↑

16. https://mcia.org.in/ ↑

17. https://nparbitration.net/ ↑

18. MCIA Annual Report 2025; See: https://mcia.org.in/annual-report.php ↑

19. https://dhcdiac.nic.in/about-diac/ ↑

20. Law.asia, 'How are institutional arbitration centres faring in India?' (2 January 2025), citing DIAC's 8,000 cases handled in 2023. ↑

21. https://www.dhcba.org/delhi-mediation-center/ ↑

22. https://iamch.org.in/building-trust-in-arbitration-highlights-from-dubai-arbitration-week-2025 ↑

23. https://nparbitration.net/Home/Recognition ↑

24. https://nparbitration.net/Documents/Newsletters/2024/NPAC_Newsletter_December_2024.pdf ↑

25. Susan D. Franck, James Freda, Kellen Lavin, Tobias A. Lehmann and Anne van Aaken, 'The Diversity Challenge: Exploring the “Invisible College” of International Arbitration' (2015) 53 Columbia Journal of Transnational Law 429. See also: Joseph Mamounas, ICCA 2014. Does “Male, Pale, and Stale” Threaten the Legitimacy of International Arbitration? Perhaps, but There's No Clear Path to Change, Kluwer Arb. Blog (Apr. 10, 2014). ↑

26. PVS Giridhar (n 3), Section II. ↑

27. United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention on Mediation), adopted 20 December 2018. Malaysia signed on 7 August 2019; as of 2026 it remains a signatory that has not ratified. India is in an identical position. See UNCITRAL treaty status database; Giridhar (n 3), Section IV. ↑

28. SIAC–SIMC Arb-Med-Arb Protocol; S.32 of Malaysian Arbitration Act 2005; and S.30 of Indian Arbitration and Conciliation Act 1996. ↑

29. The WIPO Arbitration and Mediation Center was established in 1994; the Court of Arbitration for Sport in 1984. See PVS Giridhar (n 3), Section V. ↑

30. https://fidic.org/sites/default/files/17%20The%20Role%20of%20the%20DAB.pdf ↑

31. https://fcl.fidic.org/enhancing-project-delivery-through-fidic-dabs-and-daabs-insights-and-innovations/ ↑

    Author is a Senior Advocate practicing at Madras High Court and an International Trade & Energy Law Consultant. Views are personal.