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2020 MarsdenLR 2209
FEDERAL COURT PUTRAJAYA
SIEMENS INDUSTRY SOFTWARE GMBH & CO KG (GERMANY) – Appellant
Versus
JACOB AND TORALF CONSULTING SDN BHD & ORS – Respondent
[Civil Appeal No: 02(f)-115-12-2018(W)]
Only the dispositive portion of an arbitral award is registrable and enforceable under s 38 of the Arbitration Act 2005, ensuring confidentiality of the arbitration process.
Headnote:(A) Arbitration Act 2005 – Sections 2, 38, and 39 – The appeal concerns the nature of what constitutes an 'award' under s 38 for registration in court – The Federal Court concluded that only the dispositive portion of the arbitration award, not the entire award, is to be registered and enforced – The High Court's ruling requiring only the dispositive part for registration was affirmed, establishing the clear separation between a court's role in enforcement and the merits of arbitration findings. (Paras 27, 30, 54)
Facts of the case: The appellant, a German company, entered a settlement agreement with Malaysian respondents, which included an arbitration clause. Following a failed arbitration, respondents sought to register the entire award in the High Court.
Findings of Court: The Federal Court held that only the dispositive portion of an arbitral award should be registered for enforcement, maintaining confidentiality in arbitration proceedings.
Issues: The main issue was whether the entire award or only the dispositive portion should be registered under s 38 of the AA 2005.
Ratio Decidendi: The court ruled that the entire findings and reasoning of the arbitral tribunal do not need to be registered; only the outcome is relevant for enforcement purposes, empowering the enforcing court to act on the accepted terms without unnecessary detail.
Result: The appeal was allowed, affirming the High Court’s approach of only registering the dispositive portion of the arbitration award.
Introduction
[1] The appeal before us arose from an arbitration proceedings between the parties, described below.
[2] The appellant is a company incorporated under the law of Germany and has a last known business address in Germany. The appellant has no business presence in Malaysia.
[3] The 1st and the 4th respondents are companies incorporated under the law of Malaysia. The 2nd and the 3rd respondents are Malaysian citizens and directors of the 1st and the 4th respondents.
[4] The 5th respondent is a citizen of Germany and is a named party to the arbitration proceedings.
Background Facts
[5] The appellant and the respondents had entered into a settlement agreement where they agreed to submit any disputes in relation to the settlement agreement for arbitration.
[6] Notwithstanding the agreement to arbitrate, the respondents commenced a suit at the Kuala Lumpur High Court No: S-22-129-2009 ("Suit 2009"). In Suit 2009, the respondents alleged, among others, that there was fraudulent misrepresentation by the appellant and/or its representatives, thereby inducing the respondents to enter into the settlement agreement.
[7] In view of the arbitration agreement found in the settlement agreement, the appellant applied for and was granted an order by the Court of Appeal to stay Suit 2009 pursuant to s 10 of the Arbitration Act 2005 (" AA 2005"). The order of the Court of Appeal has been affirmed by this Court. Thus, to date, Suit 2009 has been stayed in favour of arbitration. The appellant thereafter commenced arbitration in Singapore.
[8] During the course of the arbitration proceedings, the respondents filed a counterclaim against the appellant for damages in fraud, deception and misrepresentation in relation to the settlement agreement. However, due to the respondents failure to provide the required advances on costs, the arbitral tribunal made a finding that the counterclaim was withdrawn. The arbitral tribunal was consequently left to determine the appellants claim against the respondents which were as follows:
(i) declaration as to the validity and finality of the settlement agreement entered into between the appellant and the respondents, and in the event of an opposite finding; the return to the appellant of the sum of EUR 3 million plus interests calculated from 8 August 2008;
(ii) declaration that this present Tribunal has sole jurisdiction to adjudicate on all disputes arising out of or in connection with the settlement agreement, and grant any reliefs, including reliefs sought by the respondents in Suit 2009;
(iii) declaration as to the final and conclusive nature of the waiver of any claims of the respondents under the settlement agreement, and their inability to assert any future claims, including the ones asserted under Suit 2009;
(iv) determination as to the absence of valid clause available to the respondents in initiating proceedings under Suit 2009, and a further declaration for the respondents to withdraw Suit 2009;
(v) declaration to the effect that the respondents jointly and severally bear the costs and expenses of the arbitration, and Suit 2009 and respective appeals of the appellant plus interest; and
(vi) dismissal of the respondents counterclaim which now stands withdrawn.
[9] The award on the arbitration proceedings in Singapore was delivered on 8 May 2015. The final award consists of 73 pages and is divided into different parts dealing with the following topics:
A. The Parties
B. The Arbitration Agreement
C. Governing Law and Language
D. Seat
E. Request for Arbitration and Answer
F. Relief Sought
G. Appointment of the Tribunal
H. Procedural Orders and Directions
I. Hearing
J. Issues to be Determined
K. Witness Testimonies
L. Submissions
M. Discussions
N. Summary of Findings
O. Costs
P. Dispositions
[10] The dispositive portion of the award is set out at paras 189-192 of the final award and it states the following:
(i) the Tribunal concludes and holds that the appellants claim be dismissed in its entiret
