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2025 MarsdenLR 3544
HIGH COURT MALAYA KUALA LUMPUR
SETIAKON BUILDERS SDN BHD – Appellant
Versus
MAYFAIR VENTURES SDN BHD – Respondent
[Originating Summons No: WA-24C(ARB)-63-11/2024]
The court ruled that the relief sought was interim in nature, not subject to stay under Section 10(1) of the Arbitration Act, emphasizing the distinction between interim measures and final resolutions.
Headnote:(A) Arbitration Act, 2005 - Sections 10(1) and 11 - Defendant applied to stay proceedings in Originating Summons seeking mandatory injunctions against Defendant for interim relief - Court found that relief sought was interim in nature and did not resolve claims in arbitration - Stay Application dismissed with costs. (Paras 31 and 32)
(B) Distinction between interim measures and final resolution - Court emphasized that Section 10(1) mandates a stay if there is a valid arbitration agreement, while Section 11 allows for interim measures to support arbitration process. (Paras 10, 11, 12, and 20)
(C) The parties' arbitration notices indicate recognition of arbitration as the sole avenue for dispute resolution. (Paras 14 and 21)
Facts of the case:
Defendant applied for a stay of proceedings in an Originating Summons where Plaintiff sought mandatory injunctions related to retention sums from two phases of a construction project. Plaintiff initiated adjudication proceedings, resulting in a decision in its favor, which Defendant sought to challenge through arbitration. (Paras 2-6)
Findings of Court:
The relief sought by Plaintiff was determined to be interim and not subject to stay under Section 10(1) of the Act. (Paras 28-30)
Issues: Whether the relief sought in the Originating Summons was interim or final, and whether it attracted an application under Section 10(1). (Paras 21 and 30)
Ratio Decidendi: The Court ruled that the relief sought by Plaintiff was interim, thus not warranting a stay under Section 10(1), and emphasized the distinction between Sections 10 and 11 of the Act. (Paras 31 and 32)
Result: Stay Application dismissed with costs.
| Table of Content |
|---|
| 1. defendant's application for stay under arbitration act. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. confusion between stay application and originating summons. (Para 7 , 21 , 25 , 28) |
| 3. court's approach to arbitration agreements and interim measures. (Para 8 , 10 , 12 , 14 , 19) |
| 4. mandatory stay under s 10(1) of the arbitration act. (Para 9 , 11 , 15 , 17 , 20) |
| 5. dismissal of stay application and next steps. (Para 31 , 32) |
[Defendant's Application Under Section 10 (1) Of The Arbitration Act, 2005 ]
Introduction
[1] The Defendant ("Mayfair") is applying under s 10(1) of the Arbitration Act, 2005 ("Act") to stay the proceedings in this Originating Summons, in which relief that the Plaintiff ("Setiakon") seeks is for mandatory injunctions against Mayfair that Setiakon contends is in the exercise of its rights for interim measures/relief under s 11 of the Act.
Salient Facts
[2] In 2016 and 2017, Mayfair had appointed Setiakon as the Main Contractor for Phase 1 and Phase 2 of a development project in Persiaran Tropicana, in Mukim Damansara, District of Petaling, Selangor Darul Ehsan ("Project"). Phase 1 consisted of the construction of Blocks 1 and B1 of the Project, and Phase 2 consisted of the construction of Blocks A1 and B2 of the Project.
[3] In respect of Phase 1 of the Project:
(i) Setiakon had commenced works on 1 July 2016, and the Certificate of Practical Completion was issued on 31 January 2020;
(ii) The defects liability period had expired on 30 July 2022;
(iii) Setiakon alleges that, despite attending to all of the defects as notified to it by the architect, the architect and/or Mayfair have subsequently failed to issue the Certificate of Making Good Defects;
(iv) Setiakon alleges that Mayfair is also wrongfully withholding the 2nd moiety of the retention sum of RM4.481,155.56;
(v) That, arising from payment disputes between them in respect of unpaid certified sums, the retention sum and late payment interest, Setiakon initiated adjudication proceedings under the Construction Industry Payment and Adjudication Act, 2012 ("CIPAA"), which culminated in an Adjudication Decision dated 16 April 2024 in Setiakon's favour in the sum of RM4,131,813.45 with interest and costs ("Adjudication Decision");
(vi) On 6 December 2024, the Shah Alam High Court dismissed Mayfair's application to set the Adjudication Decision aside and allowed Setiakon's application to enforce it; and
(vii) In the meantime, by a Notice of Arbitration dated 27 November 2024 ("Mayfair's Notice of Arbitration"), Mayfair initiated an arbitration to resolve all of the disputes between the parties in relation to Phase 1 of the Project, including their disputes in regard to the retention sum.
[4] In respect of Phase 2 of the Project:
(i) Setiakon had commenced works on 15 December 2017 and the Certificate of Practical Completion was issued on 26 April 2021;
(ii) The defects liability period for Phase 2 had expired on 26 October 2023, but had by agreement of the parties been extended to 27 January 2024, which has now also expired;
(iii) Setiakon alleges that, despite attending to all of the defects as notified to it by the architect, the architect and/or Mayfair have failed to issue the Certificate of Making Good Defects;
(iv) Setiakon alleges that Mayfair is wrongfully withholding the 2nd moiety of the retention sum of RM2,324,318.43; and
(v) By a Notice of Arbitration dated 2 September 2024 ("Setiakon's Notice of Arbitration"), Setiakon initiated an arbitration to resolve all of the disputes between the parties in relation to Phase 2 of the Project, including their disputes in regard to the retention sum.
[5] Given the two separate and distinct Notices of Arbitration issued by the parties, there are now two separate arbitrations before two separate arbitrators for the resolution of the parties' disputes regarding Phase 1 and Phase 2 of the Project. As all of the claims in both arbitrations arise from and relate to the same Project, one wonders whether it wo
