A party may not seek a stay under s 10 of the Arbitration Act after taking substantive steps in court proceedings which indicate acceptance of jurisdiction.

[1] Enclosure (4) is the Defendant's application for stay of these Court proceedings under s 10 of the Arbitration Act 2005 [Act 646]. It is the Defendant's case that the subject matter of the Plaintiff's claim falls within the ambit of the arbitration clause. Pursuant to s 10, it is mandatory that the Court grants a stay and refer the parties and/or the claim to arbitration, the parties' preferred choice for resolution of their disputes or differences.

[2] The Defendant's application is supported by the affidavit of its Senior Vice President, James Lees affirmed on 10 December 2014 [enclosure 5]; to which the Plaintiff has replied through its General Manager, Quah Kim Huat's affidavit affirmed on 26 December 2014 [enclosure 6]; and which the James Lee has responded in his affidavit in reply affirmed on 6 January 2014 [enclosure 7].

[3] These are some relevant background facts. The Defendant is the main contractor of a project known as "Cadangan Membina dan Menyiapkan: (A) Blok Pusat Data 3 Tingkat, B Blok M&E 3 Tingkat, 1 Unit SSU (Stesen Suis Utama) di atas Lot PT 29471, 71760 Bandar Techpark @ Enstek, Mukim Labu, Daerah Seremban, Negeri Sembilan Darul Khusus untuk Tetuan Teliti Datacentres Sdn Bhd" (the project). The employer of the project is Teliti Datacentres Sdn Bhd.

[4] By letter of award dated 1 November 2011, the Defendant appointed the Plaintiff as a nominated subcontractor to supply, deliver, install, test, commission and maintain genset installation services for the project for the sum of RM20.5 million (the contract). On 16 December 2011, the Defendant paid a sum of RM2 million to the Plaintiff as down-payment under the contract.

[5] The Plaintiff claimed that it had carried out works under the contract and had submitted a total of 28 progress claims to the project's Mechanical & Electrical Engineer, Perunding Eagles Engineers Sdn Bhd and the Architect, Arkitek Pital for certification of the value of work done. These progress claims totaled a sum of RM14,644,647.95. The Plaintiff's demand for payment led to a partial payment of RM550,000.00 leaving a balance of RM13,786,972.15 as the amount still outstanding. The claim in Court is for that balance sum.

[6] In its application, the Defendant seeks inter alia orders of declaration that pursuant to O 12 r 10(1)(g) Rules of 2012, the Court does not have any jurisdiction over the Defendant in respect of the subject matter of the claim or relief sought by the Plaintiff. The other principal order sought is the order of stay of the present proceedings and referring the parties and/or the claim to arbitration.

[7] The application is opposed by the Plaintiff who argued that the order is denied of the Defendant for several reasons. Firstly, because there is no arbitration agreement. Secondly, even if there is an arbitration agreement or arbitration clause, the subject matter of this claim or litigation does not fall within the arbitration agreement. Thirdly, the Defendant has taken steps in these proceedings disentitling the Defendant from seeking the order for stay.

[8] After hearing full submissions of both learned counsel, and upon careful scrutiny of the cause papers including the affidavits and reply affidavits filed by both parties, the Court agrees with the Plaintiff. For the record, the Court also agrees with the Plaintiff that the first order sought by the Defendant is a non-starter. The Court's jurisdiction in arbitration and arbitration related matters is never ousted, even by the presence of any cl