Arbitration agreements mandate stay of proceedings unless found invalid; parties must honor their arbitration clauses.

[1] The Plaintiff is a Contractor appointed by the Defendant under a Design and Build Contract with respect to the construction and completion of a Multipurpose Hall in Universiti Tun Hussein Onn Malaysia at Batu Pahat, Johor Darul Takzim. The Contract dated 3 May 2011 is based on the PWD Form DB (Rev 2007).

[2] The Contract Sum was for RM30,550,000.00. The Revised Contract Sum was RM37,580,900.12 after taking into account Additional Works and Provisional Sum. The Plaintiff had made various Interim Progress Claims No 1 to 13 and these had been paid by the Defendant.

[3] The present action by the Plaintiff is for the sum of RM22,677,356.87 for Additional Works The Defendant's stand as stated in their Affidavit is that these Additional Works fell within the scope of the Design and Build Contract and so are not payable. The Defendant further contended that there was a delay of one year in the completion of the Works and so they are entitled to LAD claim of RM5,300.00 per day and with 141 days of delay the total amount of LAD is RM747,300.00. The Defendant further stated in their Affidavit that a sum of RM36,932,461.79 had been paid as at 12 October 2011.

Prayers

[4] There were initially several prayers in Enclosure 6 filed by the Defendant. These included a prayer for striking out the Statement of Claim pursuant to O 18 r 19 (a), (b) and (d) of the Rules of 2012 ("ROC 2012") as well as a prayer for an order to strike out certain paragraphs in the Statement of Claim filed herein.

[5] There was also prayer (c) which is the Defendant's application for stay of the Court proceedings under s 10 (1) of the Arbitration Act 2005 pending reference of the dispute that has arisen to arbitration.

[6] At the hearing of Encl 6, learned counsel for the Defendant had withdrawn all the other prayers other than prayer (c) and so these other prayers were struck out.

[7] Thus Encl 6 is confined only to the prayer for stay of the Court proceedings pending reference to arbitration under s 10 Arbitration Act 2005 .

Principles

[8] Section 10 of the Arbitration Act 2005 provides as follow:-

"10. Arbitration agreement and substantive claim before Court

(1) A Court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.

(2) The Court, in granting a stay proceeding pursuant to subsection (1), may impose any conditions as it deems fit" (emphasis added)

[9] Therefore, if the Defendant that is being brought to Court, has not taken any other steps in the Court proceedings, the Court shall grant a stay of the proceedings, as an Arbitration Agreement is a term of the Contract and the Court would give effect to it.

[10] The exception is when the said Agreement is null and void, inoperative or incapable of being performed, then the Court would not grant a stay of the proceedings and the parties in such an instance would have to proceed with litigation in Court.

Whether The Defendant In This Case Had Taken Further Steps In The Proceedings Such As To Disentitle Them To Apply For A Stay

[11] The Plaintiff complained that the Defendant had through their solicitors on 7 June 2016 written to the Plaintiff's solicitors requesting for further and better particulars of paras 70-74 of the Plaintiff's Statement of Claim. See Exh HS -2 in Encl 8. This, the Plaintiff submitted is "taking any other steps in the procee