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2011 MarsdenLR 1001
HIGH COURT, SANDAKAN
SYARIKAT PEMBENAAN CITY – Appellant
Versus
DATUK PETER HU CHANG LIK HII CHANG LIK – Respondent
[Originating Summons No. 24-85 Of 2010]
The arbitration tribunal has jurisdiction over counterclaims that function as true defenses to the claimant's disputes, negating the requirement for a separate notice to arbitrate.
Headnote:(A) Arbitration Act 1952 - Section 22 - Jurisdiction of Arbitral Tribunal - The Plaintiff/Respondent sought a declaration regarding jurisdiction of Arbitral Tribunal over Counterclaims related to execution of an Agreement dated 8th April 2002. Findings were made that Counterclaims were indeed within jurisdiction given conditions set in Clause 55 were already met by the Defendant/Claimant. (Paras 3, 19, 20)
(B) Jurisdiction - An Arbitral Tribunal has jurisdiction to determine Counterclaims that serve as a true or pure defence to the claim, eliminating the need for separate notice to arbitrate. (Paras 21-22)
Facts of the case:
Parties engaged in arbitration regarding disputes alleged under an Agreement. The Defendant/Claimant raised objections around jurisdiction on Counterclaims of the Plaintiff/Respondent, prompting a request for a High Court ruling on the issue.
Findings of Court:
The Plaintiff/Respondent's Counterclaims were ruled to be within the jurisdiction of the Arbitral Tribunal.
Issues: The key issue was the jurisdiction scope of the Arbitral Tribunal regarding the Counterclaims.
Ratio Decidendi: The court found that the disputes related to Counterclaims had already arisen and were intertwined with the original claim, establishing jurisdiction.
Result: The Plaintiff/Respondent's application was allowed with costs.
| Table of Content |
|---|
| 1. parties involved in arbitration agreement. (Para 1 , 2 , 3) |
| 2. reliefs sought by the plaintiff. (Para 4 , 5 , 6) |
| 3. introduction to the arbitration case (Para 7) |
| 4. defendant's objection to jurisdiction of counterclaim. (Para 8 , 9 , 10 , 11 , 12 , 13) |
[1] The Plaintiff and the Defendant are parties to an Arbitration conducted before Mr. Chong Thaw Sing (hereinafter referred to as "the Arbitral Tribunal"), pursuant to an Agreement dated 8th April 2002 (hereinafter referred to as "the Agreement") and the Plaintiff as Respondents to the Arbitral Tribunal has filed a Statement of Defence and Counterclaim dated 30th March 2009 (hereinafter referred to as "the Counterclaims") against the Defendant as Claimant to the Arbitral Tribunal.
[2] The Defendant /Claimant to the Arbitral Tribunal raised an objection to the Plaintiff/Respondent's Counterclaim that the Plaintiff/Respondent's Counterclaim is not within the jurisdiction of the Arbitral Tribunal. The Plaintiff/Respondent then applied to the Arbitral Tribunal to refer this question to the High Court.
[3] In this Originating Summons dated 22nd December 2010, the Plaintiff/Respondent's are seeking for the High Court, pursuant to Section 22 , Arbitration Act 1952 to determine whether, on construction of the Agreement and/or other pertinent law, the Arbitral Tribunal has jurisdiction to determine the Counterclaims arising out of and in connection with the execution of the works under the Agreement.
[4] In connection to this Originating Summons, the Plaintiff/Respondent is seeking the following reliefs:-
i) A declaration that the Counterclaim are within the jurisdiction of the Arbitral Tribunal;
ii) That the Defendant pays the costs of this application to the Plaintiffs on a full indemnity basis; and
iii) Such further or other relief as this Honourable Court deems fit and proper in the circumstances of this case.
[5] This Originating Summons is supported by the Affidavit of Lou Chi Nam affirmed on 22nd December 2010.
[6] In resisting this application, the Defendant/Claimant filed an Affidavit in Opposition of Hu Chang Lik @ Hii Chang Lik affirmed on 9th February, 2011.
[7] The Plaintiff/Respondent replied the said Affidavit in Opposition by filing another two affidavits affirmed by Lou Chi Nam on 4th April, 2011 and 6th April, 2011 respectively.
B. FINDINGS OF THE Court
Whether on construction of the arbitration agreement and/or other pertinent law, the arbitral tribunal has jurisdiction to determine the Respondent's counterclaim for damages arising out and in connection with the execution of the contract
[8] The Defendant/Claimant in his Affidavit in Opposition at paragraph 5 (b), 7 and 8 that under Clause 55 (a) of the Agreement, the Defendant/claimant must first dispute the Plaintiffs/Respondents' Counterclaim before there could be referred to the Engineer. Only after the Engineer had refused to allow the claim can the Plaintiff/Respondent refer them to the Arbitrator. Such is the condition precedent for referral of any dispute or difference to the arbitrator.
[9] Further, in paragraph 9 (1) of the Defendant/Claimant's Affidavit in Opposition, the Defendant/Claimant stated that due to the Plaintiff/Respondent's non-compliance with Clause 55, the Defendant/Claimant had been denied the right to object to the Counterclaim and the parties were deprived of the Engineer's decision.
[10] The learned counsel for the Defendant/claimant then submitted that the Plaintiff/Respondent's Counterclaim does not constitute nor amount to a dispute or difference within the meaning of Clause 55 (a) (i), (ii) and/or (iii) of the Agreement between the Plaintiff/Respondent and the Defendant/Claimant and therefore not subject to arbitration. Hence, it is the Defendant/Claimant's stand that the Plaintiff/Respondent's Counterclaims is null and void, defective and/or irregular for non-compliance with Clause 55 in particular, with sub-clauses (a) - (c) of the Agreement and the Arbitrator has no jurisdictio
