Sabah Adopts International Standards for State Contracts

Sabah is strategically located along vital economic corridors in the Indo-Pacific region, and, as global trade becomes increasingly integrated, and supply chains increasingly regionalised, Sabah’s investment, industrial activity, and infrastructure growth require effective and legal safeguards. Legal contracts become larger, and stakeholder interests become varied. In anticipation of disputes in contract agreements, Alternative Dispute Resolution or ADR becomes a necessity.

The State Government is now embracing dispute resolution frameworks, including the ADR model, into government-linked transactions, development projects, and procurement agreements. Chief Minister Datuk Seri Panglima Haji Hajiji Haji Noor said the State Attorney-General Chambers has recommended that the State adopt the clause for mediation and arbitration based on the model from Borneo International Centre for Arbitration and Mediation (BICAM) in State contracts to ring-fence the State’s interest and to prevent halting of works in the event of disagreements with aggrieved parties.

“Disagreements must be managed professionally, efficiently and fairly. Our government-linked companies and statutory bodies must prioritise mediation to avoid lengthy litigation, and to preserve relationships,” Hajiji said on 24 July 2025 at the BICAM Global ADR Horizons 2025 conference held at the Magellan Sutera Resort, Kota Kinabalu. “Sabah is proud to be part of this global evolution offering a neutral platform aligned with international standards.”

“In ASEAN, we are seeing increased harmonisation of arbitration practices, stronger enforcement regimes, and the emergence of regional institutions that reflect our own legal cultures and economic realities. Sabah is prepared with the right legal and institutional environment. The presence of an international-standard ADR centre like BICAM is a clear indication of our commitment to uphold the rule of law and respect of contract sanctity. This conference is timely in that it seeks to modernise the way we manage differences, build trust between parties, and create resilient institutions. Sabah is a responsible, reliable, and reform-oriented state in Malaysia and on the global stage.”