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2007 MarsdenLR 1410
COURT OF APPEAL PUTRAJAYA
BINA PURI SDN BHD – Appellant
Versus
EP ENGINEERING SDN BHD & ANOR – Respondent
[Civil Appeal No: W-02-26-2004]
[1] This is the judgment of the court.
[2] Malaysia Airlines System Berhad wanted to build a cargo complex at Kuala Lumpur International Airport, Sepang. That complex needed infrastructure works. On 3 December 1996, Malaysia Airlines System Berhad awarded the contract for the infrastructure works to a joint venture constituted between the appellant and the second respondent in the instant appeal. On 29 January 1997, the second respondent in this appeal wrote to the first respondent. In that letter, it awarded the sub-contract for certain works in respect of the cooling system for the cargo complex in question. The appellant did not sign the said letter of award; nor was it ever mentioned in that document. Later, disputes arose which became the subject matter of proceedings in court. The first respondent before us was plaintiff in those proceedings and the appellant and the second respondent among others were defendants. That litigation was settled. The compromise was recorded in a settlement agreement dated 12 January 1999. s 1.02 of the recitals to the settlement agreement reads as follows:
By a letter of intent dated the 11th day of December, 1996 and a letter of award dated the 29th day of January, 1997 both attached hereto as Appendix 1 (hereinafter called the "Letters "), KHEC acting on behalf of the JV, awarded a sub-contract (hereinafter called the "Sub-Contract ") to EP for the execution and completion of the Chilled Water Loop System (hereinafter called the "Services "), which forms part of the Works awarded by MAS to the JV, based on the terms and conditions as stipulated in the Letters and in the Standard Form of Contract for Sub-Contracts (hereinafter called the" Sub-Contract Agreement ") attached hereto as Appendix II.
[3] The appellant was a party to the settlement agreement. It signed it. Later, the dispute was referred to arbitration by the first respondent in this appeal. Reliance was placed on the arbitration clause in the articles of agreement accompanying the letter of award of the sub-contract. The appellant took the point that it was not a party to the sub-contract and therefore not bound by the agreement to arbitrate. The appellant then brought an action for a declaration that it was not bound to go to arbitration with the first respondent. The learned judge who heard the appellant's summons dismissed it. He held, on the material before him, that there was indeed an agreement to arbitrate between the appellant and the instant first respondent. The appellant being dissatisfied has appealed to this court.
[4] We would be doing no injustice to the submissions of learned counsel for the appellant if we said there was really only one issue in this appeal. That issue is whether the appellant is bound by the arbitration clause in the sub-contract. It is common ground that there is no separate agreement to arbitrate between the appellant and the first respondent. So it is a question of construction having regard to the factual matrix against which this appeal rests whether the appellant is correct in its contention.
[5] Now it is settled law that an agreement to arbitrate must be in writing. s 2 of the Arbitration Act 1952 , the legislation under which this arbitration was proceeding, requires it. But it is not the law that an agreement to arbitrate must be signed. This court had to deal with the identical point in Bauer (M) Sdn Bhd v. Daewoo Corp, [1999] 4 MLJ 545 . This is what the court said in the course of the judgment in that case:
... The phrase 'written agreement' in s. 2 of the Act does not demand of a formal agreement executed by the parties to the dispute. The agreement to which the section refers may be gathered from either a single document or a series of documents or, in some cases, a party may be estopped from asserting that there is no agreement. This principle is amply covered by authority.
[6] It follows that in the present instance it is not necessary for the first respo
