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2025 MarsdenLR 2252
HIGH COURT MALAYA KUALA LUMPUR
PANASONIC APPLIANCES AIR-CONDITIONING MALAYSIA SDN BHD – Appellant
Versus
ALPHA SEIKO PLASTICS SDN BHD – Respondent
[Originating Summons No: WA-24NCC(ARB)-13-05/2023]
The court determined that the Interim Award was procedural and did not constitute an 'award' under the Arbitration Act, thus not subject to judicial review.
Headnote:(A) Arbitration Act 2005 - Sections 2, 37(1)(a)(iv), 37(1)(b)(ii) and 37(2)(b) - Application to set aside Interim Award - The Defendant alleged breaches by the Plaintiff under an Outsourcing & Supply Agreement - The Plaintiff contended the Arbitrator breached natural justice by allowing document admission and witness recall without notice - Court found that the Interim Award was procedural and did not affect substantive rights - No breach of natural justice established - Application dismissed with costs. (Paras 16-59)
Facts of the case:
The Plaintiff sought to set aside an Interim Award issued by the Arbitrator, which allowed the Defendant to introduce additional documents and recall a witness during arbitration proceedings regarding alleged breaches of an outsourcing agreement. (Paras 1-14)
Findings of Court:
The Court held that the Interim Award was procedural in nature, not affecting substantive rights, and no breach of natural justice was established by the Plaintiff. (Paras 39-56)
Issues: Whether the Interim Award constitutes an 'award' under the Arbitration Act and whether there was a breach of natural justice. (Paras 27-28)
Ratio Decidendi: The Court concluded that procedural rulings do not constitute an award under the Arbitration Act and that the Plaintiff had sufficient opportunity to address the issues raised in the application. (Paras 36-38)
Result: Application dismissed with costs of RM10,000.00 in favor of the Defendant.
| Table of Content |
|---|
| 1. dispute background and arbitration process (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 2. plaintiff's grounds for setting aside the interim award (Para 16 , 17 , 18 , 19 , 20) |
| 3. defendant's counterarguments against the plaintiff's claims (Para 21 , 22 , 23 , 24 , 25 , 26) |
| 4. determining if interim award qualifies as an 'award' (Para 27 , 28 , 29 , 30 , 31 , 32 , 33) |
| 5. assessment of natural justice breach claims (Para 39 , 40 , 41 , 42 , 43) |
| 6. public policy considerations in the interim award (Para 45 , 46 , 47 , 48) |
| 7. court's discretion in setting aside awards (Para 50 , 51 , 52 , 53) |
| 8. conclusion on the application to set aside the interim award (Para 54 , 55 , 56 , 57 , 58) |
[1] This was the Plaintiff's application via Amended Originating Summons (encl 39) to set aside an Interim Award dated 14 April 2023 ("the Interim Award") made by the learned Arbitrator, Dato' Mah Weng Kwai, in arbitration proceedings bearing reference No.: ADM-878-2020 ("this Originating Summons").
[A] Salient Background Facts
[2] A dispute arose between the Defendant and the Plaintiff arising out of an Outsourcing & Supply Agreement dated 1 July 2014 ("Agreement") entered into between the parties. The Agreement contained an arbitration clause under cl 32.0 therein.
[3] The crux of the dispute relates to the Defendant's allegation that the Plaintiff had breached its obligations under the Agreement in relation to the production and manufacturing of Cross Flow Fans ("CFF"). The Defendant claimed that the alleged breaches had caused losses to it. These allegations were disputed by the Plaintiff.
[4] On 18 March 2020, the Defendant filed a Writ action against the Plaintiff in the Shah Alam High Court Suit No. BA-22NCC-44-03/2020 ("Writ Action") to prosecute its alleged claims In the Writ Action, the Defendant had framed a case whereby the relief sought included special damages amounting to RM30,745,512.56 against the Plaintiff.
[5] The Plaintiff applied for and obtained an Order dated 10 September 2020 from the High Court to stay the Writ Action pending reference to arbitration at the Asian International Arbitration Centre ("AIAC"). The High Court made a further Order to appoint Dato' Mah Weng Kwai ("the learned Arbitrator") as the sole arbitrator pursuant to s 24A of the Courts of Judicature Act 1964 .
[6] On 16 October 2020, the Defendant issued a Notice of Arbitration to refer the dispute to arbitration under the Arbitration Act 2005 and the AIAC Rules 2018. In the arbitration, the Defendant sought the same special damages of RM30,745,512.56 as was pleaded in the earlier Writ Action.
[7] The Defendant in the present case is the Claimant in the arbitral proceedings, whereas the Plaintiff is the Respondent.
[8] Between 16 October 2020 and 9 July 2021, both parties delivered their respective pleadings in the arbitration. The learned Arbitrator issued pre-hearing written directions on 18 March 2021 and 19 August 2021, which inter alia required the parties to file their respective bundles of documents for use at the evidentiary hearing. Prior to the start of the evidentiary hearing, parties had filed and exchanged a total of more than 50 volumes of bundle of documents.
[9] The evidentiary hearing of the arbitration commenced on 15 February 2022, whereby the Defendant called its sole witness ("CW-1") to testify. The Defendant closed its case on 6 April 2022, having indicated its intention to recall CW-1 to give evidence on the production of further documents.
[10] The Plaintiff opened its case on 6 April 2022. On 12 July 2022, CW-1 was recalled for the first time to adduce an additional bundle of documents. CW-1 was examined, cross-examined and re¬examined on the same day. However, CW-1 was again released subject to recall by the Defendant to adduce further documents.
[11] On 8 December 2022, after both parties had closed their cases and during the cross-examination of the Plaintiff's final witness, the Def
