A court cannot grant a stay of proceedings under the Arbitration Act unless a binding arbitration agreement exists between at least two parties involved in the suit.

JUDGMENT

Quay Chew Soon JC:

Introduction

[1] The Defendants filed an application vide Enclosure 25 ("Encl 25") for stay of proceedings pursuant to s 10 of the Arbitration Act 2005 and/or O 69 r 10 and/or O 92 r 4 of the Rules of 2012 ("ROC").

[2] I dismissed Encl 25. These are the grounds of my decision.

Enclosure 25

[3] Enclosure 25 is premised on an arbitration clause contained in a Representative Agreement dated 5 January 2018 ("Representative Agt"). The representative Agt was entered into between the 2nd Plaintiff ("P2") and the 4th Defendant ("D4").

[4] Clause 5.2 of the Representative Agt reads:

"Any disputes, controversies and differences, arising out of, or in relation to this Agreement that cannot be settled amicably by negotiation(s) between the Principal [ie D4] and the Representative [ie P2] hereto shall be referred to and finally settled by arbitration in Singapore, in accordance with the arbitration rules of the Singapore International Arbitration Centre (SIAC)."

[5] Enclosure 25 prayed for the following:

"(1) All further proceedings in this action against the 4th Defendant be stayed pursuant to s 10 of the Arbitration Act 2005 and/or O 69 r 10 of the Rules of 2012 pending reference and/or full and final determination of all disputes and differences between the 2nd Plaintiff and the 4th Defendant in arbitration;

(2) All further proceedings in this action against the 1st Defendant, 2nd Defendant, 3rd Defendant and 5th Defendant be stayed pursuant to the inherent jurisdiction of this Honourable Court under O 92 r 4 of the Rules of 2012 pending reference and/or full and final determination of all disputes and differences between the 2nd Plaintiff and the 4th Defendant in arbitration;"

[6] Enclosure 25 was filed by the Defendants on 28 December 2020.

[7] Thereafter on 23 February 2021, P2 filed a Notice of Discontinuance under O 21 r 2 of the ROC. That provision allows a plaintiff, without the leave of the Court, to discontinue his action or withdraw any claim made by him as against any or all of the defendants at any time not later than 14 days after the service of the defence on him.

[8] In the present case, the Defendants have not filed their Defence. Understandably so, as that would otherwise have amounted to taking a step in the proceedings. Which could have jeopardized their application for a stay pending arbitration.

[9] Accordingly, P2 is entitled to discontinue its action against the Defendants without the leave of the Court. In the Notice of Discontinuance, P2 sought to discontinue its action against the Defendants 'with liberty to file afresh and with no order as to costs'.

[10] The parties however recorded a consent order dated 22 March 2021. The consent order stipulated that the discontinuance of action by P2 against the Defendants is 'without liberty to file afresh, save for the commencement of arbitration between P2 and D4'. Pursuant to O 59 r 11 of the ROC, I ordered P2 to pay the Defendants costs in the sum of RM5,000 occasioned by the discontinuance.

Decision

[11] lam cognizant that a stay is mandatory if the relevant requirements under s 10 of the Arbitration Act 2005 are fulfilled. (See the Federal Court case of Press Metal Sarawak Sdn Bhd v. Etiqa Takaful Bhd , 2016 MarsdenLR 1029 at 429; the Court of Appeal case of Renault SA v. Inokom Corp Sdn Bhd & Anor and other appeals; 2003 MarsdenLR 2256 at 404; [2010] 5 CLJ 32).

[12] Section 10 of the Arbitration Act 2005 reads:

"(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."

[13] In the instant case, there is in existence an arbitration clause between P2 and D4. Which is contained in the Representative Agt entered into between P2 and D4. That the sa