MacIntyre FJ:

This is an appeal against the judgment of Gill J, dismissing a motion by the appellant to vary the terms of an interlocutory order made pursuant to s. 5 of the Arbitration Ordinance, 1950, in Kuala Lumpur, High Court Civil Suit No. 230 of 1965, staying all further proceedings until the differences between the appellant and the respondent in regard to the matter in dispute in the suit are determined by arbitration as agreed under a written agreement contained in a policy of insurance dated 9 March 1962.

The suit was instituted by the Central Electricity Board of the Federation of Malaya against the appellant who is the Commissioner for the Federal Capital (first defendant) and one Lim Wah Woon (second defendant), claiming compensation for damage caused to the plaintiff's electric & installations in the course of constructing certain public works by the second defendant, under contract, for the appellant. Both defendants were insured against such contingency under the aforesaid policy of insurance issued by the respondent herein, the Insurance Company of North America, and the third party to the suit.

The variation prayed for is the addition of a Proviso to the interlocutory order, to the effect, that the respondent shall not be entitled to rely and be precluded from relying on the lapse of time between 4 August 1965 - the date on which the respondent applied for stay - and 26 September 1966 - the date on which the order for stay was made - In computing time for the purpose of pleading contractual limitation as a defence to the claim in the arbitration proceedings, by virtue of a condition in cl 7 of the contract which reads:-

If the company shall disclaim liability to the Insured for any claim hereunder and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration under the provision herein contained then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder."

The notice of disclaimer was served on the appellant on 12 March 1965. The third party notice was served on the respondent on 2 July. The application for stay of proceedings was taken out on the 4 August. The hearing was fixed for 6 September 1965, but postponed to a date to be fixed by the Court at the request of the appellant's Counsel, who had intimated that his arguments against the stay would be somewhat lengthy. The contractual time before which the dispute had to be submitted to arbitration is said to have expired on 12 March 1966. The hearing of the motion for stay was eventually fixed by the Court for 26 September 1966, when, after a preliminary skirmish between Counsel lasting five minutes, the order for stay was made.

Counsel for the appellant contends that the respondent should not be permitted to take advantage of the lapse of time since it was brought about mainly through circumstances beyond control, namely, the "lamentable delay" by the Court in fixing the date of hearing of the application for stay, and partly, on the one hand, by the failure of the respondent to reasonably prosecute his application, and on the other, to the failure of the appellant to ensure that the application was brought on in due time. The degree of responsibility, according to Counsel, was in the descending order as enumerated above.

In support of his application, he relies on cases in which the old High Court of Chancery in England had exercised its inherent jurisdiction to grant relief against 'hardship' caused by the lapse of time under the Statute of Limitation when a plaintiff was in the course of actively pursuing his right of action in the Court itself. Those were cases in which the plaintiff had to decide whether to 'exhibit a bill' in the Court of Chancery or the Court of Common Pleas since mixed questions of law and equity were involved. Where he had chogen the Court of Chancery and the Court had subsequently ruled that the