A stay of court proceedings pending arbitration is mandatory under s 10(1) of the AA 2005 if there is a valid arbitration agreement, unless proven otherwise.

[1] The issue before this Court was a rather familiar one with respect to the Defendant's application under s 10(1) Arbitration Act 2005 (" AA 2005") for a stay of the proceedings pending reference to arbitration as there was a clear arbitration clause in the disputes that have arisen between the parties in the construction contract.

[2] This Court in making the stay order had exercised its discretion under s 10(2) AA 2005 and imposed a condition that the Defendant do proceed with the arbitration within 30 days from the date of the order.

[3] It is against the condition imposed that the Defendant had appealed and so this judgment will focus on the reasons for such a condition imposed and for completeness, it shall also deal briefly with the merits for the stay application.

Project

[4] The Plaintiff is a sole-proprietor and had filed a claim against the Defendant for the amount due to him as the Subcontractor for the construction of a building project awarded to it by the Defendant as the Main Contractor. The Defendant had in turn been appointed by DBKL as the Employer for the project.

[5] The project was with respect to the construction of a 3-storey clinic and a 1 underground floor for use by the Health and Environment Department of the Dewan Bandaraya Kuala Lumpur ("DBKL") on a piece of land in Taman Tasik Pudu Ulu, Cheras, Kuala Lumpur.

[6] The terms of the Subcontract are contained in the Letter of Acceptance of Subcontract Works issued by the Defendant dated 5 November 2015 and duly accepted and signed by the Plaintiff on 11 November 2015.

[7] The Plaintiff claimed that he had done work for which he had invoiced the Defendant to the tune of over RM1 million but he had only been paid RM20,000.00. The Plaintiff thus claimed under 3 invoices and a debit note for late payment totalling RM1,018,087.23 together with a claim for interest and costs.

Prayer

[8] The Defendant, had before taking any further steps in the current Court proceedings other than entering an appearance by way of filing and serving a memorandum of appearance, applied in Encl 6 for an order for a stay of the proceedings in this Court pending reference to arbitration under s 10 of the AA 2005.

[9] There was a further prayer that pending the disposal of the application, all proceedings in this suit including but not limited to any ex-parte applications be stayed.

[10] In its brief grounds as set out in the application, the Defendant disclosed that the parties are bound by the Letter of Acceptance and that there is an arbitration agreement in Cl 11.8 of the said Letter of Acceptance binding on the parties.

[11] The Defendant further stated that the Plaintiff's Claim is with respect to a matter covered under the arbitration agreement and as such the proceedings in this Court should be stayed pending reference to arbitration as agreed by the parties.

[12] Soon after the application for stay was filed on 6 March 2018 in Encl 6, the Plaintiff's solicitors filed an application in Encl 9 on 4 April 2018 to discharge themselves as solicitors for the Plaintiff on the ground that the Plaintiff had stopped giving instructions to them since 20 March 2018.

[13] On 11 April 2018 when the matter was called up for hearing, the Plaintiff's manager, Encik Faisal Bin Mohd Zain was present, and he explained to the Court his difficulty in raising the financing to continue with the litigation, much less with the arbitration that the Defendant had already applied for.

[14] The Court then fixed 23 April 2018 for hearing of both applications and also to allow the Plaintiff to e