Under the Arbitration Act, an award may be contested for jurisdictional issues and non-contemplated disputes, while loss of profit claims must adhere to established legal principles.

Introduction

[1] Magna Prima Construction Sdn Bhd, the plaintiff in Originating Summons No: 24C(ARB)-10-07-2014 seeks to invoke ss 37(1)(a)(iv) and/or (v) and/or 42 of the Arbitration Act 2005 [Act 646] and set aside, either in whole or in part the Award dated 31 April 2014. Alternatively, the plaintiff seeks to vary, remit the Award to the learned arbitrator for reconsideration. The application is opposed.

[2] In the event the plaintiff fails in its application, the defendant, Bina BMK Sdn Bhd has sought recognition of the Award under Originating Summons No: 24C(ARB)-15-07-2014. There are two defendants in this second application, Magna Prima Construction Sdn Bhd as the 1st defendant and Perembun (M) Sdn Bhd as the 2nd defendant. The present proceedings are however only against the 1^st defendant.

[3] Although proceedings under s 38 may be heard on an ex parte basis under O 69 of the Rules of 2012, but given the overlap in issues and that the same parties were involved the Court had, during case management on 7 October 2014 decided that both applications will be heard together. More important, the parties were relying on the same affidavits. The Court then directed that the related cause papers be served. The parties agreed.

[4] For purposes of consistency and ease of reference, I shall refer to "Magna Prima Construction Sdn Bhd" as the "plaintiff "; and "Bina BMK Sdn Bhd" as the "defendant"; using the details in the first originating summons.

[5] The following are the relevant affidavits:

i. the plaintiff's first affidavit affirmed by Shahrom bin Abdul Latif on 17 June 2014;

ii. the defendant's affidavit in reply affirmed by Abd Aziz bin M Khalid on 16 July 2014;

iii. the plaintiff's second affidavit affirmed by Shahrom bin Abdul Latif on 4 August 2014.

Background

[6] Perembun (M) Sdn Bhd ("Perembun") was awarded a project known as "Cadangan Pembangunan Bercampur yang mengandungi 56 unit kedai/pejabat, 567 unit tempat letak kereta dan 397 unit apartment di atas Lot 4086 dan sebahagian lot-lot (Fasa 3B(i)) di Jalan Kepong Mukim Batu, Kuala Lumpur" ("the project") for a lump sum of RM56,361,730.40 by way of a letter of award dated 25 September 2004 by the employer, Magna Park Sdn Bhd ("Main Contract"). By way of a joint venture agreement dated 26 October 2004, Perembun and the plaintiff formed an unincorporated joint venture company called "MPC-Perembun JV" as the main contractors to carry out the works required under the main contract for the project.

[7] By letter of award dated 30 October 2004, MPC-Perembun JV, awarded the defendant the sub-contract works for the project for a lump sum of RM54,861,730.40. A formal contract was subsequently executed between the parties on 25 November 2005 ("sub-contract").

[8] During the course of the works for the project, disputes and differences arose under the sub-contract works between the parties and the defendant initiated arbitration proceedings under cl 22.0 of the conditions of contract against the plaintiff and Perembun where Ir Chong Pick Eng was appointed as the arbitrator. Pleadings filed for the arbitration consisting of the following:

(i) Defendant's points of claim dated 11 June 2008;

(ii) Plaintiff's defence and counterclaim dated 30 July 2008; and

(iii) Defendant's reply to plaintiff's defence of points of claim and defence to the plaintiff's counterclaim dated 17 September 2008.

[9] The oral hearing took more than 69 days after which the learned arbitrator gave directions for written submissions to be filed by the parties as follows:

(i) Defendant's written submissions dated 15 January 2013;

(ii) Plaintiff's written submissi