The court upheld the arbitration award, confirming no breach of public policy or natural justice, emphasizing the finality of arbitration decisions under the Arbitration Act 2005.

JUDGMENT

(2 Originating Summonses)

Sumathi Murugiah JC:

A. Introduction

[1] This judgment concerns the following two (2) originating summonses (OS) in relation to an Arbitration Award dated 22 May 2023 (the Award):

(i). OS No BA-24C(ARB)-7-06/2023 (Setting Aside OS) was filed by SIME DARBY ENERGY SOLUTIONS SDN BHD (SDES) to set aside the Award pursuant to s 37 of Arbitration Act 2005 ; and

(ii). OS No BA-24C(ARB)-8-08/2023 (Enforcement OS) was filed by RZH SETIA JAYA SDN BHD (IN LIQUIDATION) (RZH) against SDES for leave of court to enforce the Award pursuant to s 38 Arbitration Act 2005 .

[2] As both these OSs are related to the Award, directions were given for both these suits to be heard together and the same was agreed by the parties.

[3] Upon concluding all the filing of all related affidavits and submissions, this court had pronounced its decision for both the suits on 28 February 2024. Being dissatisfied with the decision of this court, SDES has filed a Notice of Appeal at the court of Appeal, for which this grounds of judgment is written.

B. Brief Background

[4] The dispute between the parties concerns a project known as "Menyiapkan Baki Kerja Projek Pembersihan Dan Pengindahan Sg. Melaka, Melaka Parcel 2 - Pakej 1 (Contract Reference No.: JPS/IP/SG/03/2015)" ("Project") by the Government of Malaysia, under the Jabatan Pengairan dan Saliran ("Employer").

[5] In February 2012, the Employer awarded the Project to Sinnaiyah & Sons Sdn Bhd ("Sinnaiyah") who had then appointed SDES as one of its Subcontractors to carry out parts of the works under the Project. The Employer had subsequently terminated the contract with Sinnaiyah on 10 September 2015 with some remaining work of the Project being incomplete.

[6] The Employer accepted RZH's tender to complete the Project by way of the "Employer's Acceptance of Tender" dated 19 October 2016 ("Main Contract"). RZH then had appointed SDES by way of Letter of Award for Remaining Works for Stormwater Treatment Plant Only (Reference No.: RZH/MRB/LA/2016/02-SDOE) under the Project dated 27 October 2016 ("Subcontract") as its Subcontractor to carry out works pursuant to the terms and conditions therein. Pursuant to cl 4.1 of the Subcontract, the works were to be completed in accordance with the following timeline:

Commencement Date: 16 November 2016

Completion Date: 15 May 2017

[7] There is no specific clause which provides for Extension of Time ("EOT") but in accordance to cl 5.1 of the Subcontract, the Liquidated Ascertained Damages ("LAD") of 0.1% of the Subcontract Sum per calendar day or RM1,000.00 per calendar day whichever higher, shall be imposed.

5. LIQUIDATED, ASCERTAINED DAMAGES AND SPECIAL- CONDITION

5.1. If the Sub-Contractor failed to complete the Sub-Contract Works or any part thereof within the Completion Date stated in cl 4.1 thereof, then the Liquidated and Ascertained Damages of 0.1% of SubContract Sum per calendar day or Ringgit Malaysia: One Thousand Only (RM1,000.00) per calendar day whichever higher shall be imposed."

[8] On 2 August 2019 SDES terminated the Subcontract due to the breach of cl 8 of the LOA and had commenced Adjudication Proceedings against RZH and had been awarded a sum of RM1,806,538.76 (Adjudication Sum) through the Adjudication Decision dated 31 October 2019 (AD). Due to failure to pay the Adjudicated Sum, SDES had wound up RZH on 7 December 2021.

C. Arbitration Proceedings

[9] In 2020, RZH had commenced an Arbitration Proceeding by serving a Notice of Arbitration dated 25 May 2020 to SDES.

[10] The Award dated 22 May 2023 by the Arbitrator, Elaine Yap Chin Gaik awarded in favour of RZH against SDES as follows (RZH as the Claimant and SDES as the Respondent):

Claim by the Defendant

Counterclaim by the Plaintiff

Costs

As such, it is ordered that the net sum payable by the Plaintiff to the Defendant including costs is RM2,154,118.04.

"Operative Final Award:

1. The Respondent shall be liable to indemnify the Claimant for any losses, claims or otherwise arising from any