Low Hop Bing JCA:

Appeal

[1] This appeal was lodged against the decision of the Johor Bahru High Court in dismissing the appellant's ("the defendant's") summons in chambers which sought, inter alia, an order that the respondent's ("the plaintiff's") claim for RM334,273.37 be stayed and referred to arbitration.

[2] On 6 July 2009, we allowed the defendant's appeal. Our grounds are set out below.

Factual Background

[3] The factual background is simple and straightforward.

[4] The plaintiff's claim consists of two separate causes of action, based on two different sub-contracts awarded by the defendant, viz:

(1) Letter of award dated 4 June 2004 ("the June contract") for the construction of two show units of double-story semi-detached houses and one unit of sales pavilion; and

(2) Letter of award dated 19 August 2004 ("the August contract") for external sewerage works.

[5] The defendant is the main contractor of Redez Properties Sdn Bhd ("the employer"). The defendant had in turn appointed the plaintiff as its sub-contractor

[6] Pursuant to the two sub-contracts, the plaintiff prays for the total sum of RM445,843.29, of which a sum of RM334,273.37 is for the June contract; while the balance of RM111,569.92 is for the August contract.

[7] Upon receiving the plaintiff's writ and statement of claim, and before filing the defence on 11 December 2006, the defendant took immediate steps on 8 December 2006 to apply for a stay, pending arbitration, of the claim for RM334,273.37 under the June contract only.

[8] The defence, filed by the defendant on 11 December 2006, is in relation to the plaintiff's claim based on the August contract which is not subject to an arbitration agreement.

[9] It is to be noted that only the June contract is the subject matter of the High Court summons in chambers and now in the instant appeal.

Arbitration Agreement

[10] The defendant's learned counsel Mr Justin Voon (assisted by Mr Alvin Lai) raised the issue that in cl 1 of the June contract ("cl 1") and cl 9 of the contract between the defendant and Redez Properties Sdn Bhd ("cl 9"), the word "executed" means "signed". They relied on s 9 of the Arbitration Act 2005 in support of their contention that the true construction of cl 1 and cl 9 would lead to the conclusion that the June contract is subject to an arbitration agreement. (A reference hereinafter to a section is a reference to that section in the Arbitration Act 2005).

[11] Mr H K Yoong, the plaintiff's learned counsel, took the position that the word "executed" in cl 1 and cl 9 means "implemented, performed or carried out" and not "signed". He disputed the existence of an arbitration agreement.

[12] In the Court of first instance, the learned judicial commissioner held that the June contract was not subject to an arbitration agreement and so declined to refer the dispute to arbitration.

[13] We have identified the question for determination in the instant appeal as follows:

Upon the true construction of cl 1 and cl 9, and having regard to s 9, is the June contract subject to an arbitration agreement?

[14] The answer to the above question makes it necessary to reproduce the relevant portions of cl 1 and cl 9 as follows:

Cl. 1: This contract executed based on the terms and conditions as stipulated in the contract document between Albilt Resources Sdn Bhd (hereinafter called "The Main Contractor") and Redez Properties Sdn Bhd (hereinafter called "The Employer") and all correspondence including the Letter of Award between the Main Contractor and The Employer (emphasis added)

Cl. 9: The contract executed will be based on the terms and conditions as stipulated in the contract document between Albilt Resources Sdn Bhd (hereinafter called "the Main Contractor") and Redez Properties Sdn Bhd (hereinafter called "The Employer"). The contract shall be based on the Agreement and Conditions of Building Contract (Without Quantities) published (sic "by") Pertubuhan Akitek Malaysia ("PAM Contract"), together with amendments, addit