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2019 MarsdenLR 1118
COURT OF APPEAL PUTRAJAYA
HUAWEI TECHNOLOGIES (MALAYSIA) SDN BHD – Appellant
Versus
MAXBURY COMMUNICATIONS SDN BHD – Respondent
[Civil Appeal No: W-02(NCVC)(A)-776-04/2017]
The arbitrator must not exceed the scope of their mandate, and a party's failure to prove claims does not justify setting aside the award.
Headnote:This judgment concerns appeals related to arbitration awards set aside by the High Court under the Arbitration Act 2005. The Court analyzed whether the High Court correctly determined that the arbitrator's award dealt with a dispute not falling within the scope of arbitration as per sections 37 of the Act. The Court found that the arbitrator acted within his jurisdiction and did not err in his decision-making process. The appeal was allowed, with costs awarded to the appellant.
| Table of Content |
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| 1. two appeals consolidated due to common legal issues. (Para 1 , 2 , 3) |
| 2. contractual obligations outlined in the purchase agreement for broadband project. (Para 5 , 6 , 7 , 8 , 9 , 10) |
| 3. contractual obligations and performance. (Para 13 , 14) |
| 4. claim based on the alleged collateral agreement was dismissed. (Para 18 , 19 , 20) |
| 5. high court grounds for setting aside arbitration award articulated. (Para 22 , 23 , 24) |
| 6. court of appeal emphasized jurisdiction limitation over merits of arbitration awards. (Para 35 , 39) |
| 7. errors in the award do not justify grounds for setting aside. (Para 41 , 42) |
[1] There were two appeals before us which emanated from arbitration awards which were set aside by the High Court. The present appeal, Appeal No W-02(NCVC)(A)-776-04/2017 was first heard on 17 January 2018 and adjourned for decision. The following day on 18 January 2018, Appeal No W-02(NCC)(A)-1429-07/2017 came up for hearing before us. Since both appeals concerned the application of the same provisions of the Arbitration Act ( AA ) 2005, we were of the view that they should be taken together.
[2] We requested assistance from amicus curiae from the then Kuala Lumpur International Arbitration Centre (KLRCA) [now known as the Asian International Arbitration Centre (AIAC)]. We did so because we wanted a comprehensive review of the position in law. We invited parties to furnish the Court with an independent view of the relevant law on the following questions:-
a. whether the intervention in these two appeals was warranted under the provisions of s 37 and / or s 42 of the AA 2005 as the case may be;
b. whether s 37 and / or s 42 of the AA 2005 can be utilised together or not, in a single application. The focus here was whether those two sections were to be utilised interchangeably or whether they were disparate provisions providing remedies for different modes of seeking to challenge an arbitral award. If the latter was the correct interpretation, then these two sections could not be utilised interchangeably.
[3] We also requested that a comprehensive coverage of relevant and recent case law be provided in the new submissions. We heard further submissions and delivered our decision for the two appeals together on 27 April 2018. We delivered separate grounds for the two appeals since they are not factually related.
[4] The salient facts for the present appeal are set out below. We adopted the factual matrix mainly from the written submissions of the appellant, as there is no material dispute in this respect.
Background Facts
[5] Huawei Technologies (Malaysia) Sdn Bhd (the defendant, 'Huawei') entered into an agreement with Maxis Broadband Sdn Bhd ('Maxis') for the provision of the next generation broadband project in Malaysia.
[6] For the purposes of carrying out the project, Huawei entered into an agreement known as 'Purchase Agreement for Maxis NGBB NDC Project, Agreement No PAEMYS2410081104MM' dated 18 August 2010 ('the Purchase Agreement') with Maxbury Communications Sdn Bhd (the plaintiff, 'Maxbury').
[7] Maxbury had represented that it was fully experienced and competent to carry out the works set out in the Purchase Agreement. Under the Purchase Agreement, Maxbury was required to first conduct feasibility studies in respect of a product, "Optical Line Terminal" ('OLT') as Huawei's subcontractor, pursuant to Huawei's main contract with Maxis. Subsequent to such studies only would Maxbury be required to provide a technical survey and high technical design and planning in respect of the market demand. This was necessary in order to determine the number of OLTs required to distribute to a particular quantity of fiber optics in a specified locality to meet demand for data networks.
[8] Under the definitions clause of the Purchase Agreement, it is stipulated that Maxbury would begin work only after receiving a Purchase Order ('PO') from Huawei.
[9] The work and terms of payment were stipulated in cl 1 of the Purchase Agreement. The rele
