Abdul Hamid Omar FJ:

The appeal is against the decision of Harun J granting leave to extend the time to refer the respondent's claim to arbitration pursuant to s. 28 of the Arbitration Act 1952.

The respondent is the registered owner of motor-cycle No. BU 3998 and the appellants are the insurers of this motor-cycle against loss and damages by theft etc. to a limit of RM12,000.

On or about 19 June 1973 during the currency of the policy of insurance the respondent's brother parked the motor-cycle in a private car park at Rantau Panjang, Kelantan and it was stolen. On 25 June 1973 the respondent reported the loss to the appellant.

The solicitors for the appellant by letter dated 9 October 1973 repudiated liability on the ground that reasonable steps were not taken to safeguard the said motor-cycle and there was a delay in reporting the theft to the police.

On 13 December 1973 the appellant's solicitors advised the then respondent's solicitors that they had authority to accept service of process should legal proceedings be instituted and another letter to the same effect was sent on 18 November 1974 preceding the letter sent by the respondent's solicitors on 10 September 1974 asking for the appellant to forward a copy of the complete policy. On 3 October 1974 the appellant forwarded a copy of the conditions attached to the motor-cycle policies.

In the affidavit affirmed by the respondent in support of the application for leave to extend the time, reference was made to condition 8 of the policy of insurance which provides for reference to arbitration of any dispute which shall arise between the parties.

On 14 April 1975 the respondent's solicitors wrote to the appellant's solicitors and for convenience we reproduce its full text as follows:

Re: Loss of Vehicle No. BU 3998

We refer to the above subject matter and to your letter dated 8 April 1975 enclosing a copy of the complete policy.

2. Upon perusal of the policy we observe at Clause 8 of the condition that there is a requirement for this matter to be referred to Arbitration.

3. We presume that since you have stated in your previous letters that you have instructions to accept service that your clients are waiving Arbitration.

4. Kindly confirm same as we intend filing proceedings forthwith.

5. Kindly also note that the financiers of the motor-cycle No. BU 3998 have filed proceedings against our client claiming all the arrears of instalments which our client has not paid in view of the fact that your clients has not reimbursed our client under the Insurance Policy.

On 7 May 1975 the appellant's solicitors replied stating:

We refer to your letter of 14 April 1975.

2. As to paras. 2, 3, and 4 of your said letter, our clients are not waiving the conditions as to arbitration. Kindly nominate an arbitrator for our clients consideration if you are so instructed.

Raja Abdul Aziz Counsel for the appellant submits that the question before the Court is one of construction of s. 28 of the Arbitration Act 1952as to the power of a High Court to extend time for commencing arbitration proceedings.

It is not in dispute that the appellant repudiated liability on 9 October 1973 followed by a letter of 13 December 1973. The respondent was also advised that the appellant was ready to accept service of process. Another letter to the same effect was sent on 18 November 1974. It is also not in dispute that when the respondent asked for a complete copy of the policy a year had passed.

On 18 October 1975 by consent, Mr. Khoo Eng Chin was appointed to act as sole arbitrator. There was an order for the respondent to deliver his statement of claim within three weeks from the date thereof and the appellant to deliver statement of defence within three weeks from the date of delivery of the statement of claim. The respondent filed his statement of claim on 27 October 1975. The statement of defence was filed on 17 November 1975. It is one of the defences that the respondent in failing to refer his clai