Arbitration agreements must be clear and unambiguous, and mere non-payment of a claimed debt does not constitute a dispute warranting arbitration.

This Appeal

[1] This is the appellant's ("the defendant") appeal pursuant to the decision of the Sessions Court Judge dated 7 January 2019 dismissing its application for a stay of proceedings to refer the case to arbitration pursuant to s 10 of the Arbitration Act 2005 ("Arbitration Act").

The Background Facts

[2] On 17 May 2016, the respondent ("the plaintiff") signed a Statement in Lieu of Prospectus, Term Sheet & Application of Shares ("the Term Sheet") in order to subscribe/acquire shares in the defendant company.

[3] Subsequently, however, due to restrictions by Bank Negara Malaysia, this fund-raising activity (known as "the Angel 2A Round") could not proceed.

[4] The defendant, through a letter dated 3 April 2017 (and acknowledged by the plaintiff, agreed to refund the investment sum of RM500,000.00 together with an interest of 15% per annum to be calculated from the date of payment (17 May 2016) until the date of refund (28 April 2017) in the amount of RM71,307.31.

[5] Although the plaintiff had, on numerous occasions, reminded the defendant to refund the principal sum together with the interest, as compensation agreed upon, the latter had failed to do so.

[6] The plaintiff then brought an action in the Sessions Court on 17 October 2018.

[7] The defendant applied for a stay of proceedings to refer the case to arbitration pursuant to s 10 of the Arbitration Act which reads:

" Section 10 - Arbitration agreement and substantive claim before Court

(1) A Court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed."

[Emphasis Mine]

[8] The Sessions Judge dismissed the application. The defendant appealed.

[9] Due to unfortunate reasons, the grounds of the decision of the Sessions Judge were not provided.

[10] I dismissed the defendant's appeal for the following reasons:

The Issues

[11] The main issues arising out of this appeal are as follows:

i. Whether there was an arbitration agreement between the parties;

ii. Whether there was a dispute between the parties that calls for arbitration.

The Law

[12] Reference again should be made to s 10 of the Arbitration Act which reads:

" Section 10 - Arbitration agreement and substantive claim before Court

(1) A Court before which proceedings are brought in respect of a matter which is the subject of an arbitration agreement shall, where a party makes an application before taking any other steps in the proceedings, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed."

[Emphasis Mine]

[13] On the meaning of 'arbitration agreement' the relevant provision is s 9 of the Arbitration Act, which reads:

" Section 9 - Definition and form of arbitration agreement

(1) In this Act, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in an agreement or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing:

(a) if its content is recorded in any form, whether or not the arbitration