The court ruled that enforcement of interim measures ordered by an Arbitrator is incompatible with its powers under the Arbitration Act 2005 and is contrary to public policy.

JUDGMENT

Aliza Sulaiman J:

Introduction

[1] This is an application by the plaintiff pursuant to s 19H of the Arbitration Act 2005 (' AA 2005'); O 7, O 28, O 45 r 6 and O 92 r 4 of the Rules of 2012 ('ROC 2012') and/or the inherent jurisdiction of the Court for, inter alia, the following reliefs:

(a) that the decision by the learned Arbitrator, Mr Chong Thaw Sing ('Arbitrator') dated 14 December 2020, pursuant to the application for security for costs under s 19(2)(e) AA 2005 by the plaintiff as the claimant in the arbitration proceedings in ordering the defendant as the respondent in the said proceedings to deposit RM250,000.00 to be held jointly by the parties solicitors ('Interim Measures'), be enforced as if it is a judgment or Order of the High Court;

(b) that in the event the above prayer is allowed, the defendant shall pay security for costs of RM250,000.00 to the plaintiff's solicitors to be held as stakeholders within 14 days from the date of the Order; and

(c) that if the defendant fails to adhere to the Order, enforcement proceedings may be taken against the four directors of the defendant so as to compel them to adhere to the Order.

[2] The cause papers which were filed in this application are as follows:

(a) the plaintiff's Originating Summons ('OS') dated 10 February 2021 (encl 1);

(b) the Affidavit In Support affirmed by Tan Kean Cheong, the plaintiff's Manager on 10 February 2021 (encl 3);

(c) the Affidavit in Reply ('AIR') affirmed by Luke Furler, the defendant's Director on 1 March 2021 and 10 March 2021 (encls 4, 5 and 6);

(d) the plaintiff's AIR affirmed by the same deponent on 16 March 2021 (encl 7);

(e) the defendant's AIR No 2 affirmed by the same deponent on 25 March 2021 (encl 8); and

(f) the plaintiff's Supplementary Affidavit affirmed by the same deponent on 16 April 2021 (encl 18) setting out the chronology of events as agreed by the parties solicitors in "exh-1" and as directed by the Court on the hearing date.

[3] Having considered the cause papers and the parties written and oral submissions, I had dismissed the plaintiff's application with costs of RM4,000.00, subject to allocatur.

[4] The plaintiff has lodged an appeal against the decision of this Court and I now provide my full reasons.

Background Facts

[5] By a Letter of Award dated 15 June 2015 ('LOA'), the plaintiff has appointed the defendant as the nominated sub-contractor for "The Construction And Completion Of Interior Fitout Works For Retail" for the project known as "Cadangan Pindaan Kepada Pelan Bangunan (Rujukan BP T3 20072009) Bertarikh 28 Januari 2009 Kepada Cadangan Pembangunan Bercampur Yang Terdiri Dari 1 Blok Pangsapuri, Pangsapuri Servis Dan Hotel Tingkat 65 Tingkat Yang Mengandungi 3 Tingkat Basement Tempat Letak Kereta, 1 Tingkat Basement Ruang Niaga Dan Servis, 1 Tingkat Lobi Utama Dan Ruang Niaga, 6 Tingkat Podium Ruang Niaga, Tempat Letak Kereta Dan Kemudahan Hotel, 1 Tingkat Podium Kemudahan Rekreasi (Hotel, Pangsapuri Servis Dan Pangsapuri), 2 Tingkat Kemudahan Rekreasi Dan Ruang Mekanikal (Pangsapuri Dan Pangsapuri Servis), 10 Tingkat Hotel (190 Bilik), 16 Tingkat Pangsapuri Servis (160 Bilik) Dan 29 Tingkat Pangsapuri (128 Unit) Di Atas Lot 230 (Asal Lot 35), Seksyen 58, Jalan Lumba Kuda, Off Jalan Ampang Dalam Bandaraya Kuala Lumpur' for the lump sum price of RM15,988,000.00.

[6] On 15 January 2020, the plaintiff wrote to the defendant alleging that there was delay and/or slow progress in the completion of the defendant's work despite the numerous reminders to expedite the same. According to the plaintiff, there is a 569-day delay for the completion of the retail Mock-up and 227-day delay for the completion of Section 1 (Retail). The plaintiff claimed that pursuant to cl 13.0 of the LOA, the defendant was liable to pay liquidated damages ('LD') in the sum of RM2,845,000.00 for the retail Mock-up and RM11,350,000.00 for Section 1 (Retail).

[7] The defendant refused to pay the LD and subsequently filed an application for a Judicial