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2021 MarsdenLR 115
HIGH COURT MALAYA SHAH ALAM
PASUKHAS CONSTRUCTION SDN BHD – Appellant
Versus
DK-MY PROPERTIES SDN BHD (ENCL 6) – Respondent
[Companies Winding-Up No: BA-28NCC-330-07/2021]
The existence of an arbitration agreement mandates that disputes between contracting parties be referred to arbitration, reinforcing the adherence to contractual dispute resolution mechanisms.
Headnote:(A) Arbitration Act 2005 – Section 10 – Companies Act 2016 – Sections 465 and 466 – Winding up petition – Application for stay pending arbitration – The Respondent seeks to stay winding up proceedings citing an arbitration clause in the PAM Contract, which mandates arbitration for disputes. The Court outlines the relevance of establishing a valid arbitration agreement before addressing stay applications. (Paras 5, 9, 10, 11, 12, 16)
(B) Dispute Resolution – Court’s Role – The Court affirms its obligation to refer disputes to arbitration unless the arbitration agreement is found invalid. The existence of an arbitration clause mandates referral of disputes, reaffirming the intention of the parties to resolve matters amicably through arbitration. (Paras 5, 47)
Facts of the case: The Petitioner filed a winding up petition against the Respondent following non-payment for rectification works. The Respondent’s application seeks to stay proceedings and refer disputes to arbitration under an existing contract.
Findings of Court: The Court concludes that the PAM Contract contains a valid arbitration clause and affirms the Respondent's right to proceed with arbitration, rejecting the notion of dispute related to payment as warranting a winding up action.
Issues: Whether the winding up petition could be stayed pending arbitration pursuant to the contractual agreement; whether the existence of a judgment in default affects the referral to arbitration.
Ratio Decidendi: The Court emphasized that arbitration remains the exclusive method for dispute resolution as stipulated in the contract, confirming that the Court must adhere to the statutory provisions unless the agreement is deemed invalid.
Result: Application to stay winding up petition dismissed.
JUDGMENT
Introduction
[1] Notice of Application (encl 6) dated 17 August 2021 filed by the Respondent pursuant to s 10 of the Arbitration Act 2005 , O 69 and/or Order 92 r 4, Rules of 2012 and/or the inherent powers of the Court, prays for the following orders:
"(1) Bahawa keseluruhan tindakan penggulungan syarikat melalui Petisyen Penggulungan Syarikat bertarikh 26 July 2021 di dalam kes ini, yang difailkan oleh Pempetisyen terhadap Responden, adalah digantungkan / ditangguhkan selama- lamanya (indefinitely) dengan serta merta selaras dengan s 10 Akta Timbang Tara 2005 mulai daripada tarikh Perintah ini diberikan oleh Mahkamah Yang Mulia ini dan pihak-pihak dalam tindakan ini dikehendaki merujuk sebarang tuntutan Pempetisyen terhadap Responden untuk ditimbangtara di bawah s 10 Akta Timbang Tara 2005;
(2) Bahawa Pempetisyen adalah diperintahkan untuk memulakan prosiding timbang tara menurut Klausa 34.5, 34.6 dan 34.7 Perjanjian 'PAM Contract 2006 (Without Quantities)" bertarikh 12 April 2014 di antara Pempetisyen dan Responden dalam masa empat belas (14) hari daripada tarikh Perintah ini;
(3) Bahawa sekiranya Pempetisyen gagal, enggan dan/atau cuai merujuk dan meneruskan tuntutan Pempetisyen terhadap Responden untuk prosiding timbang tara dalam masa empat beias (14) hari daripada tarikh Perintah ini, maka keseluruhan tindakan pengguiungan syarikat yang difaiikan di dalam kes ini adalah dibataikan dengan serta merta pada hari ke-15 daripada tarikh Perintah ini tanpa permohonan selanjutnya oleh Responden;
(4) Bahawa penggantungan interim adalah diberikan terhadap keperluan untuk Responden memfailkan Affidavit Jawapan kepada tindakan pengguiungan syarikat ini sehingga permohonan ini dibicarakan dan diputuskan oieh Mahkamah Yang Mulia ini;
(5) Bahawa Responden adalah diberikan pelanjutan masa selama empat beias (14) hari untuk memfailkan Affidavit Jawapan di daiam tindakan pengguiungan syarikat ini selepas permohonan ini diputuskan;
(6) Bahawa kos permohonan ini hendaklah ditanggung dan dibayaroleh Pempetisyen kepada Responden;
(7) Perintah-perintah dan/atau reiif-reliflain yang didapati adil dan suaimanfaat di dalam keadaannya oleh Mahkamah Yang Mulia ini. "
Background Facts
[2] It is pertinent for me to set up briefly the facts in order to appreciate the factual matrix of the case.
2.1 The Petitioner and the Respondent has executed a PAM Contract 2008 (Without Quantities) ("PAM Contract") dated 12 April 2014 for a development project. Among the terms contained in the PAM Contract is that reference of any disputes shall to be made to arbitration.
2.2 On 15 September 2016, the Certificate of Practical Completion has been issued by the Respondent and the defects liability period ends twenty four (24) months after the issuance.
2.3 On 24 December 2018, the Respondent issued the Certificate of Making Good Defects.
2.4 On 12 May 2020 (after the expiry of the defects liability period), the Respondent's Architect issued a letter to the Petitioner because the Respondent is not satisfied with some of the work done by the Petitioner and the Respondent has given instruction to the Petitioner to rectify those works.
2.5 On 15 January 2021, a meeting was held between the parties where the Petitioner has agreed to complete the rectification works after the Respondent made payment of 30% of the amount due to the Petitioner. After such payment has been made, the Petitioner requested for the payment of another 30% before carrying out the rectification works. This was not agreed by the Respondent and no payment was made by the Respondent.
2.6 On 27 May 2021, the Petitioner sent a statutory notice pursuant to s 465 and s 466 of the Companies Act 2016 . Twenty - one (21) days has lapsed from the service of the Notice and the Respondent failed to pay the sum as demanded.
2.7 On 26 July 2021, the Petitioner filed this Winding Up Petition. On 17 August 2021, the Respondent file this application to stay the Winding Up Petition.
2.8 So much for the factual
