Edgar Joseph Jr FCJ:

[1] This appeal from a judgment and order of the High Court, at Kuching, giving leave to enforce an award of an arbitrator dated 29 May 1992 as a judgment or order to the same effect pursuant to s 27 of the Arbitration Act, 1952 ("the Act"), arises out of an originating summons relating to a construction contract for civil engineering works, to wit, bakau piling for the embankments of the proposed Sungai Santubong Bridge along the proposed Kuching Santubong/Teluk Bandung Road, Sarawak ("the contract") entered into by the appellant, the State Government of Sarawak as employer ("the employer") and the respondent Chin Hwa Engineering Development Co, as contractor ("the contractor").

[2] All references to "dollars" in this judgment are to "Malaysian Ringgit".

[3] The contractor had taken possession of the site in early December 1985 and piling work had commenced at the end of that month. During the progress of the construction work, disputes arose between the contractor and the employer regarding the size of the bakau piles provided; more particularly whether they complied with the specifications stipulated in the contract. In the upshot, the employer, through its Deputy Director of Works issued a letter dated 18 March 1986, addressed to the contractor suspending the contractor from future tendering until further notice, in the following terms:

Public Works Department

Headquarters

Jalan Simpang Tiga

Kuching

Sarawak

18 March 1986.

Chin Hwa Engineering Development Co,

Lot 273, 1st floor, Beautiful Jade Centre,

P.O. Box 544,

Miri.

Dear Sirs,

Suspension From Future Tendering

This is to inform you that you are hereby suspended from future tendering until further notice.

"Hidup Selalu Berkhidmat"

Yours faithfully,

sgd.

Director of Public Works,

Sarawak.

[4] The contractor treated the letter as evincing an intention on the part of the employer not to continue with the contract and therefore a wrongful repudiation thereof. Accordingly, on 27 March 1986, the contractor left the site leaving the works uncompleted and treated the contract as discharged.

[5] Then followed a notice by the contractor to the employer referring the dispute to arbitration pursuant to cl 43 of the contract which was in the following terms:

Provided always that in case any dispute or difference shall arise between the employer or the engineer on his behalf and the contractor, either during the progress or after the completion or abandonment of the works, as to the construction of this contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith (including any matter or thing left by this contract to the discretion of the engineer or the withholding by the engineer of any certificate to which the contractor may claim to be entitled or the measurement and valuation mentioned in cl 15 of these conditions or the rights and liabilities of the parties under cl 30, 40 or 41 of these conditions), then either party shall forthwith give to the other notice in writing of such dispute or difference, and such dispute or difference shall be and is hereby referred to the arbitration and final decision of a person to be agreed upon between the parties in accordance with and subject to, the provisions of the Arbitration Ordinance, and the award of such arbitrator shall be final and binding on the parties. Such reference, except on the questions whether or not a certificate has been improperly withheld or is not in accordance with cl 35 of these conditions, or on any dispute or difference under cls 40 or 41 of these conditions, shall not be opened until after the completion or alleged completion or abandonment of the works, unless with the written consent of the employer or the engineer on his behalf and the contractor. Subject to the provisions of cl 35(g) of these conditions the arbitrator shall without prejudice to the generality of his powers have power to direct such measurements and/or valuations as may in his opinion be desirabl