The obligation to pay under an agreement cannot be negated by assignments of rights and remains enforceable unless explicitly stated otherwise in the agreement.

[1] Originating Summons No. WA-24NCC (ARB)-39-09-2018 dated 27 September 2018 (encl. 1) ("OS39") is an application by AMDAC (M) Sdn Bhd ("AMDAC") pursuant to ss 37 and 42 of the Arbitration Act 2005 ("the Act") to set aside the final arbitration award ("the award") of the learned arbitrator Dato' Azmi Mohd Ali ("the arbitrator"). The award is dated 18 July 2018 and was published on 20 August 2018. The defendant in OS 39 is BYD Auto Industry Company Ltd ("BYD"). For convenience, I shall refer to the plaintiff and defendant as AMDAC and BYD respectively. The arbitration was conducted in accordance with the Kuala Lumpur Regional Center for Arbitration ("KLRCA") Arbitration Rules.

[2] In the arbitration proceedings, BYD was the claimant and AMDAC was the respondent. BYD's claim was for a sum of RM4.5 million with interest and costs. AMDAC had filed a counterclaim dated 3 April 2017. AMDAC's counterclaim was for:

(a) Reimbursement of preliminary costs;

(b) The loss in the adjustment price per unit per bus for the 15 buses amounting to RM1,500,000;

(c) Damages for the maintenance and after-sales service contract to be assessed and once assessed to be paid by the claimant to the respondent;

(d) The reimbursement of RM5 million project financing from MDV;

(e) Declaration that the business agreement dated 24 January 2014; the collaboration agreement dated 08 April 2014; the Deed of Assignment dated 12 August 2014 and the Deed of Assignment dated 22 September 2014 are all illegal, void and unenforceable;

(f) Interest;

(g) Costs;

(h) Further and/or other relief deem fit and proper by this Arbitral Tribunal.

[3] However, AMDAC did not pay the requisite deposit towards the arbitration costs vis-a-vis the counterclaim (RM132,277.24). As such, in accordance with r. 13(6) of the KLRCA Arbitration Rules, the arbitrator consulted the Director of the KLRCA (now Asian International Arbitration Centre - AIAC) and terminated the counterclaim. The termination of the counterclaim was communicated via the arbitrator's letter dated 21 August 2017 which reads:

I respectfully refer to the above matter, the arbitrator's Order dated No.2 dated 16 June 2017,my letter to the Director of KLRCA dated 21 July 2017, the response from the Director of KLRCA dated 27 July 2017 and the Claimant's letter dated 10 August 2017 on the proposed termination of the Respondent's counterclaim. Order for Termination of the Respondent's Counterclaim. After due consideration and consultation with the Director of KLRCA, I hereby order the TERMINATION of the respondent's Counterclaim.

[Emphasis Added]

[4] Apart from not paying the deposit for their counterclaim, AMDAC also did not (or could not) pay their portion of the costs vis-a-vis the claim by BYD. The arbitrator reserved that issue of costs (vis-a-vis BYD's claim) to be dealt with at the end of the arbitration. In regard to the question as to AMDAC's inability to pay the arbitration costs, it is I think relevant to mention that BYD's solicitors, Messrs Thomas Philip had sent a letter dated 11 April 2016 to AMDAC's previous solicitors Messrs NK Tan & Rahim wherein a proposal was made to take the disputes to court instead of arbitration.

[5] The letter reads relevantly as