Section 30(5) of the Limitation Act 1953 allows courts to exclude time during which arbitration proceedings occurred when analyzing limitation periods, ensuring parties retain adequate time for claims.

[1] Pembinaan Punca Cergas, the respondent here, seeks vide this application, an order pursuant to s 30(5) of the Limitation Act 1953 . In essence that section allows the court, in the exercise of its discretion, to exclude that period of time between the date of commencement of an arbitration, and the date on which the court declares the arbitration to cease to have effect, for the purposes of computing time in relation to the limitation period for any given cause of action in relation to that dispute.

[2] Section 30 (5) of the Limitation Act 1953 provides as follows:

"(5) Where the High court orders that an award be set aside or orders, after the commencement of an arbitration, that the arbitration shall cease to have effect with respect to the dispute referred, the court may further order that the period between the commencement of the arbitration and the date of the order of the court shall be excluded in computing the time prescribe by this Act or any such written law as aforesaid for the commencement of proceedings (including arbitration) with respect to the dispute referred." [emphasis mine]

[3] The parties here are termed 'appellant' and 'respondent' because the origin of this application is an appeal between the parties in relation to an appeal on a jurisdictional issue, more particularly, s 18(8) of the Arbitration Act 2005 ('the Act'). This application for an exclusion of time is made under, and pursuant to that appeal, hence the parties remain the 'appellant' and 'respondent'. It is the respondent that seeks to have this specific time period excluded for the purposes of computing limitation in relation to a counterclaim which it seeks to bring against the appellant.

Salient Background Facts

[4] The background facts leading up to this application are as follows:

The appellant and the respondent here embarked on an arbitration under the Arbitration Act 2005 ('the Act') in relation to a dispute arising between the parties under a sub-contract, in or around 6 April 2006. Pleadings were filed including the respondent's counterclaim against the appellant dated 9 August 2006. The respondent had requested for the issue of the appellant's right to claim under the sub-contract to be determined as a preliminary issue but the appellant objected to this. Then on 7 February 2007 the appellant was wound up, as a consequence of which the arbitration proceedings were stayed.

[5] In the interim, on 7 June 2007, Affin Bank as the assignee of the appellant under the subcontract commenced a civil suit against the respondent. There was a clear overlap between the claims in the civil suit and the arbitration which had been stayed. The respondent therefore filed a defence in the civil suit stating that it was entitled to plead a counterclaim which in turn entitled the respondent to set-off or extinguish the appellant's claim. It was also pointed out that the arbitration was still pending. However leave had to be obtained to pursue this counterclaim because the appellant had been wound up.

[6] On 22 July 2009 the Winding Up court granted leave for the respondent to proceed with its counterclaim against the appellant in the arbitration.

[7] On 21 December 2009, the appellant raised a preliminary objection to the arbitrator's jurisdiction to deal with the respondent's counterclaim against it.

The appellant alleged that Affin Bank as an assignee of the sub-contract had not consented to the Arbitration proceedings. The arbitrator, on 17 May 2010, ruled that he had jurisdiction to deal with the respondent's counterclaim.

[8] The appellant then filed an appeal by way of originating summons under s 18(8) of the Act, against the arbitrator's decision that he had jurisdiction to hear the dispute between