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2021 MarsdenLR 1456
HIGH COURT MALAYA KUALA LUMPUR
TAN KEH HENG & ORS – Appellant
Versus
ASIA PLANTATION CAPITAL BERHAD & ORS – Respondent
[Civil Suit No: WA-22NCVC-848-12/2020]
The court lacks jurisdiction to hear a claim where parties have agreed to arbitrate disputes according to specified arbitration rules and law, affirming freedom of contract.
Headnote:(A) Arbitration Act 2005 – Stay of proceedings – Plaintiffs' claim against the Defendants for breach of contract based on misrepresentations and fraud – Court determines whether it has jurisdiction considering the arbitration clauses stipulating arbitration in Singapore – Court holds that parties are bound by their agreements and cannot vary terms outside their scope. (Paras 1, 5, 11, 15-16)
(B) Jurisdiction – The Court rules it lacks jurisdiction as the parties agreed to settle disputes through arbitration in Singapore, thereby indicating the intention of the parties to confine their claims within the arbitral framework agreed upon. (Paras 6, 17)
JUDGMENT
Introduction
[1] The 1st Defendant applied to stay the proceedings or alternatively to strike out the Plaintiffs' claim for want of jurisdiction under s 10 of the Arbitration Act 2005 and/or under O 12 r 10(1)(a) or (g) and O 10(2) till 10(5) of the Rules of 2012 ('the Rules").
The Brief Facts
[2] The cause of action of the Plaintiffs' against the 1st Defendant and 2 other Defendants ("to be referred to as the Defendants") is for a breach of contract entered between the parties based on certain representations of the Defendants which the Plaintiff contends are misrepresentations. The Plaintiffs also alleges fraud and conspiracy to defraud by the defendants.
[3] The agreement between the parties was for the Plaintiffs to invest in the business of the Defendants relating to planting of 'agarwood' on a commercial basis in return for guaranteed profits. A number of agreements were executed between the various Plaintiffs and the Defendants on various dates.
[4] The Plaintiffs allege that the Defendants failed to keep a number of promises made under the agreements which includes giving the guaranteed returns to the investment as promised. The Plaintiffs through this suit claims for the returns on their investment.
[5] The Defendants application to ask for stay or alternatively to strike out the Plaintiffs claim is grounded on the fact that each of the agreements signed between the parties has stipulated that all disputes are to be settled by way of arbitration in Singapore in pursuance of the Singapore arbitration rules. The parties have also agreed to be bound by the Singapore law in settling the disputes.
The Issue
[6] In the Court's view the only issue for determination is whether the Court had jurisdiction to try the matter in the light of the agreement between the parties.
[7] The agreements are executed between the Plaintiffs and the 2nd and the 3rd Defendants. Both the 2nd and 3rd Defendants are incorporated in Singapore.
The Terms Of The Agreement
[8] The various agreements between the Plaintiffs and the 2nd Defendant have common clauses in resolving disputes between them. The 2 clauses dealing specifically with resolving disputes are cl 40 and 41 of the agreements.
[9] Clause 40 states as follows:
"This Agreement is governed by and construed in aii respects in accordance with the taws and reguiations of Singapore".
[10] Clause 41 is worded as follows:
"The parties agree that any dispute arising out of or in connection with this Agreement, inciuding any question regarding the existence, vaiidity or termination of this Agreement shaii be referred to and finaiiy resoived by arbitration in Singapore. Such arbitration shaii be in accordance with the Ruies of the Singapore International Arbitration Center.....".
[11] It is clear from the facts stated in the statement of claim of the Plaintiff, that the disputes between the Plaintiffs and the Defendants are in connection with the breach of promises as agreed under the Agreements and therefore both the above clauses above are applicable.
[12] It is trite law the Court in interpreting any contract has to give effect to the unequivocal words and terms of the agreement. It is not for the Court to decide outside the ambit of the agreements nor is the Court empowered to vary the terms of the agreements.
[13] Federal Court in the case of CIMB Bank Berhad v. Anthony Lawrence Bourke & Anor, held that -
[26] We agree with the Defendant that parties are bound by the terms of the contract which they entered into and that it is the Court's duty to give effect to the dear and piain meaning of the words in the said clause. That is quite trite.
[27] The law recognises the principle of freedom of contract Parties to a contract are free to determine for themselves what their obligations are. As Sir George Jassei MR said in Printing and Numerical Registering Company v. Simpson [1874-75] LR 19 at 465:
"... men of full age and competent understanding shall have the utmost liberty of contracting, a
