2014 MarsdenLR 1945

HIGH COURT MALAYA KUALA LUMPUR
MEASAT BROADCAST NETWORK SYSTEMS SDN BHD – Appellant
Versus
AV ASIA SDN BHD – Respondent
[Originating Summons No: 24NCC(ARB)-35-11-2013]

Court must consider credible evidence of a company's financial inability to pay costs when determining applications for security for costs in arbitration, balancing against the potential to stifle genuine claims.

Headnote:(A) Arbitration Act 2005 - Section 11(1)(a) - Applications for security for costs - Plaintiff seeks security of RM4,014,000 against defendant in arbitration proceedings - Defendant's financial status questioned and counterclaim accused of oppression - Relevant factors include failure to file financial returns since 2002, apparent insolvency, reliance on third-party funding - Court must ascertain credible testimony of defendant's inability to pay costs if plaintiff successful - Compelling evidence led to the conclusion that security should be granted, albeit at a reduced quantum of RM1,191,000. (Paras 11, 14, 52, 67, 70)

(B) Security for costs - Terms and requirements - Court assesses financial viability of defendant against plaintiff's ability to meet potential costs - Factors for granting security include company’s financial status and evidence of third-party funding - Mere insolvency insufficient; genuine claims must not be stifled. (Paras 66, 69).