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2023 MarsdenLR 949

COURT OF APPEAL PUTRAJAYA
ABD RAHMAN SOLTAN & ORS – Appellant
Versus
FEDERAL LAND DEVELOPMENT AUTHORITY & ANOR AND OTHER APPEALS – Respondent
[Civil Appeal Nos: W-01(IM)(NCvC)-511-10-2020 W-01(IM)(NCvC)-519-10- 2020 & W-02(NCC)(A)-1265-09-2020]



Petitioner Advocates:Harpal Singh Grewal,Amrit Pal Singh,Ng Jun Wei,Rany Rao ,Respondent Advocate: Kumar Kanagasingam,Mong Chung Seng,Wong Han Wey,Medha Ong Ann Ting

The arbitration agreement was held not binding on non-parties, allowing judicial review of related disputes in light of public interest considerations.

Headnote:The judgment concerns three appeals involving parties under dispute regarding arbitration agreements and land development contracts. The court analyzed provisions under the Arbitration Act regarding the binding nature of arbitration clauses and assessed the validity of the agreements according to the Land Development Act. The court resolved that specific performance is a viable remedy, affirming that the arbitration proceedings are deemed an abuse of process. Final outcome includes dismissing two appeals and allowing part of one, with costs awarded.

Wong Kian Kheong JCA:

A. Introduction

[1] This judgment concerns the following three appeals (3 Appeals):

(1) Civil Appeal No W-01(IM)(NCvC)-511-10/2020 (Appeal 511) has been filed by Encik Abdul Rahman Bin Soltan (Encik Rahman), Puan Noraini Binti Soltan (Puan Noraini), Synergy Promenade Sdn Bhd (SP) and Synergy Promenade KLVC Sdn Bhd (SPKLVC) against Federal Land Development Authority (FELDA) and Felda Investment Corporation Sdn Bhd (FIC).

Encik Rahman and Puan Noraini are siblings who are the directors and shareholders of SP and SPKLVC. This judgment shall refer to SP, SPKLVC, Encik Rahman and Puan Noraini collectively as "SP Group".

Appeal 511 is lodged against a decision of Wong Chee Lin J (Wong J) in the High Court on 25 September 2020 [Wong J's Decision (Encl 23)] which has, among others, dismissed with costs in the cause an application in Court enclosure no 23 by SP Group (Encl 23). Enclosure 23 had applied for a stay of Kuala Lumpur High Court (Civil Division) suit No WA-22NCvC-843-11/2019 (Suit 843) pending the disposal of an arbitration commenced by SP against FIC [Arbitration (SP/FIC)] in the Asian International Arbitration Centre (AIAC);

(2) SP Group has filed Civil Appeal No W-01(IM)(NCvC)-519- 10/2020 against FELDA and FIC (Appeal 519).

Appeal 519 concerns Wong J's decision on 25 September 2020 in Suit No 843 which has allowed with costs in the cause an application in Court enclosure no 61 (Encl 61) by FELDA and FIC for an interim injunction to restrain SP, SP's directors, agents, servants and nominees from continuing with the Arbitration (SP/ FIC) [Wong J's Decision (Encl 61)]; and

(3) Civil Appeal No W-02(NCC)(A)-1265-09/2020 has been filed by FIC against SP (Appeal 1265) against a decision of Anand Ponnudurai JC (as he then was) (Anand JC) dated 7 September 2020 (Anand JC's Decision) which has dismissed with costs in Kuala Lumpur High Court (Commercial Division) originating summons No WA-24NCC(ARB)-5-01/2020 instituted by FIC against SP (Suit 5).

B. Background

[2] FELDA is a body established by the Land Development Act 1956 ( LDA ) and FIC is a wholly-owned subsidiary of FELDA.

[3] FELDA is the registered and beneficial owner of 24 lots of land along Jalan Semarak, Kuala Lumpur (FELDA's Lands).

[4] By way of a "Letter of Award" dated 24 January 2014, FIC had appointed SP as the "Master Developer" of a proposed commercial development of FELDA's Lands (Proposed Project).

[5] With regard to the Proposed Project, on 2 June 2014 SP and FIC entered into a "Development Agreement" (DA). The following articles in DA are relevant:

(1) article 6.04 DA has provided as follows:

"6.04 Vacant possession

(a) For the purpose of enabling THE MASTER DEVELOPER [SP] to carry out the development of the said Project, FIC shall cause FELDA to deliver vacant possession of [FELDA's Lands] to [SP] and/or its nominee(s) within thirty (30) days from [DA].

(b) FIC hereby irrevocably confirms and will ensure that vacant possession shall not be revoked by FELDA prior to the completion of the said Project."

[Emphasis Added]; and

(2) article 9.04 DA (art 9.04) states as follows:

"9.04 Breach

In the event of any of the parties herein breaching any of the terms, covenants and or undertakings of [DA] for any reason whatsoever, without prejudice to claims for loss or damage, THE MASTER DEVELOPER [SP] or FIC, as the case may be, shall be entitled to apply to Court for the remedy of specific performance against the other. For avoidance of doubt, parties hereby agree that all dispute[sic]or difference[sic]whatsoever touching or concerning [DA] or its construction or effect of the rights, duties and liabilities of the parties under or by virtue of [DA] shall be final and binding upon the auspices of the Kuala Lumpur Regional Centre for Arbitration in accordance with the Rules of Arbitration of the Kuala Lumpur Regional Centre for Arbitration and shall be By a single arbitrator to be appointed by mutual agreement of the parties. If the parties are unable to agree upon a

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