Denys Roberts CJ:

This appeal is from the decision of the Chief Registrar given on 22 August 1991, ordering that there be a stay of proceedings pending arbitration of the matters in dispute.

On 11 May 1991 the plaintiff issued a statement of claim seeking B$3,062,733.56 plus interest and costs.

The plaintiff is a construction company, incorporated in Brunei. The remaining uncompleted civil works were assigned to the plaintiff by CTP construction Sdn. Bhd. (CTP), the main contractions for Phase III of the Muara Town Sewerage Scheme Project.

By letter dated 28 February 1989 and 7 March 1989, the plaintiff subcontracted the works to the defendant, subject to the terms and conditions of the agreement of 15 February 1989 between CTP and the plaintiff.

Two main arguments have been advanced by the plaintiffs, who say that there should be no arbitration of the claim because:

(a) there was no submission to arbitration by the plaintiff and the defendant, even though there was between the plaintiff and CTP;

(b) in any event, the arbitration clause referred only to dispute relating to `works', whereas this dispute about the contract.

Registrar's Decision

The Chief Registrar does not specify the source of the power on which he relied when ordering that the plaintiff's action to be stayed pending arbitration.

I assume that he was relying upon s. 4(1) of the U.K. Arbitration Act 1950. In Swee Private Ltd. v. Kian Chai & Anor. [1965 - 1986] 1 BLK 235 it was decided that the act is one of general application, which is in force in Brunei.

Section 4(1) of that act reads:

If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in any Court against any other party to the agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to those legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that Court to stay the proceeding, and that Court or a Judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.

Was the Arbitration Clause Embodied

Clause 21 of the contract between the plaintiff and CTP is in these terms:

21 Arbitration

In case of any dispute of difference between CTP and L & M in any matter related to the works either shall give to the other notice in writing of such dispute or difference and such dispute or difference shall be referred to arbitration and the decision of the arbitration appointed and agreed by CTP and L & M shall be final and binding on the parties here to.

By a letter of 28 February 1989, the defendant wrote to the plaintiff, submitting a quotation all in accordance with the conditions of assignment agreement dated 15 February 1989 signed between CTP and L & M.

The letter went on, after listing exceptions to the main contract, all other clauses, conditions and scope of work favourable and applicable to L & M shall deem to be applicable to us in every respect and contents.

The plaintiff wrote the defendant on 7 March 1989 confirming acceptance of the offer.

Effect of Letters

It seems clear that both parties intended that the contract between CTP and L & M should also be the contract between L & M and the defendant, with certain exceptions with are listed. Indeed, the letter of 28 February says, in terms, that the conditions of the CTP and L & M agreement shall apply. This includes Clause 21, the arbitration clause.

In a subsequent paragraph, the defendant says that he is bound by all other clauses conditions and scope of work favourable and applicable to L & M. If read literally, this would render the contract unwor