KC Vohrah J:

I have to decide a preliminary point in this case whether the applicant may rely on an error on the face of the record to set aside an award of an arbitrator.

The notice of motion is for an order to set aside an award made by an arbitrator on 24 March 2000 in respect of arbitration proceedings between the applicant and the respondents. Alternatively the applicant requests the court to order the award to be remitted for reconsideration by the arbitrator. The reason for the application is stated as the arbitrator "erroneously stating and/or applying the principles of law in his award ...".

The notice of motion shows the application was made under ss. 23 and 24 of the Arbitration Act 1952 (the Act) and under O. 69 of the Rules of the High Court.

During the hearing of the notice of motion counsel Encik Romesh Abraham for the applicant abandoned his reliance on s. 23 (on misconduct of arbitrator on award being improperly procured) and on the Act. When pressed by Encik RD Rajasingham, Encik Abraham said that he was applying to set aside the award solely on the ground that there was an error on the face of the award. He conceded that the ground "error on the face of the record" is not provided for anywhere under the Act and that it was a common law ground but submitted that that ground has been accepted as a good ground in Malaysia to set aside an award.

Before I go further I would need to set out the brief facts of the subject matter of the award.

The arbitration proceedings relate to a clinic which is owned and operated by the 3rd respondent company. The applicant and the 1st and 2nd respondents are directors and shareholders of the 3rd respondent.

The applicant, the 1st and 2nd respondents entered into two agreements dated 28 February 1979 and 25 February 1980 which provide that any dispute and question arising from the said agreements be referred to a single arbitrator.

Disputes arose between the parties and arbitration proceeding were commenced before the late Dato' Ronald TS Khoo (hereinafter referred to as "the 1st arbitrator") in March, 1988. On 24 November 1989, the 1st arbitrator handed down an interim award, under which it was declared, inter alia, that the applicant is entitled to dividends from the 3rd respondent company.

From 1990 to 1998, the 1st arbitrator continued to hear the parties on the issue of the reliefs to be ordered pursuant to the findings in the interim award. While the arbitration proceedings were so pending, the 1st and 2nd respondents on 10 November 1992 passed a board of directors' resolution to award themselves "salaries" in differing amounts which affected the amounts of monies in the accounts of the 3rd respondent company. A similar resolution was passed in 1997.

The applicant raised the issue of "retrospective salaries payments" before the 1st arbitrator who agreed to try the issue as part of the reliefs to be awarded in his final award. The issue was of significance to the question of reliefs as it affected, inter alia, the total amount of monies available as reserve in the 3rd respondent company which could be distributed by way of dividends.

In March 1998 the 1st arbitrator passed away and another arbitrator (the 2nd arbitrator) was subsequently appointed to act in place of the 1st arbitrator by the parties to conclude the arbitration including the determination of reliefs.

The 2nd arbitrator heard submissions on the issue of the 1st and 2nd respondents awarding themselves retrospective salaries and handed down his award on 24 March 2000, holding that the retrospective award of salaries was within the authority of the board of directors of the 3rd respondent and was therefore valid. In view of this finding, the 2nd arbitrator declined to grant the order sought by the applicant namely that the 1st and 2nd respondents repay the monies they had withdrawn as retrospective salaries back to the 3rd respondent company.

In doing so, the 2nd arbitrator rejected the contention raise